Legislature(2017 - 2018)BELTZ 105 (TSBldg)

04/07/2018 10:00 AM JUDICIARY

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Audio Topic
10:00:41 AM Start
10:01:02 AM SJR1
10:30:43 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Uniform Rule 23 Waived --
+ SJR 1 CONST AM: GUARANTEE PERM FUND DIVIDEND TELECONFERENCED
Heard & Held
*+ SB 127 CRIMINAL LAW;PAROLE;PROBATION;SENTENCING TELECONFERENCED
Scheduled but Not Heard
+ HB 214 BREE'S LAW; DATING VIOLENCE PROGRAMS TELECONFERENCED
Scheduled but Not Heard
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         April 7, 2018                                                                                          
                           10:00 a.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator John Coghill, Chair                                                                                                     
Senator Mia Costello                                                                                                            
Senator Pete Kelly                                                                                                              
Senator Bill Wielechowski                                                                                                       
Senator Mike Shower                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Senator Cathy Giessel                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE JOINT RESOLUTION NO. 1                                                                                                   
Proposing amendments to  the Constitution of the  State of Alaska                                                               
relating to the Alaska permanent  fund, establishing the earnings                                                               
reserve account, and relating to the permanent fund dividend.                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 127                                                                                                             
"An  Act relating  to  criminal law  and  procedure; relating  to                                                               
controlled substances; relating to  victims of criminal offenses;                                                               
relating  to  probation;  relating  to  sentencing;  relating  to                                                               
treatment  program credit  for  time spent  toward  service of  a                                                               
sentence  of   imprisonment;  relating  to  the   Violent  Crimes                                                               
Compensation  Board;   relating  to  permanent   fund  dividends;                                                               
relating  to electronic  monitoring;  relating  to penalties  for                                                               
violating municipal  ordinances; relating to parole;  relating to                                                               
community  work  service;  relating to  revocation,  termination,                                                               
suspension, cancellation,  or restoration of a  driver's license;                                                               
relating  to  the  duties of  the  commissioner  of  corrections;                                                               
relating to  the duties  of the Department  of Health  and Social                                                               
Services; relating to civil in  rem forfeiture actions; providing                                                               
for an  effective date by repealing  sec. 193, ch. 36,  SLA 2016,                                                               
sec. 79, ch. 1, 4SSLA 2017, sec.  81, ch. 1, 4SSLA 2017, and sec.                                                               
83, ch. 1, 4SSLA 2017; and providing for an effective date."                                                                    
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
HOUSE BILL NO. 214                                                                                                              
"An  Act relating  to  criminal law  and  procedure; relating  to                                                               
controlled substances; relating to  victims of criminal offenses;                                                               
relating  to  probation;  relating  to  sentencing;  relating  to                                                               
treatment  program credit  for  time spent  toward  service of  a                                                               
sentence  of   imprisonment;  relating  to  the   Violent  Crimes                                                               
Compensation  Board;   relating  to  permanent   fund  dividends;                                                               
relating  to electronic  monitoring;  relating  to penalties  for                                                               
violating municipal  ordinances; relating to parole;  relating to                                                               
community  work  service;  relating to  revocation,  termination,                                                               
suspension, cancellation,  or restoration of a  driver's license;                                                               
relating  to  the  duties of  the  commissioner  of  corrections;                                                               
relating to  the duties  of the Department  of Health  and Social                                                               
Services; relating to civil in  rem forfeiture actions; providing                                                               
for an  effective date by repealing  sec. 193, ch. 36,  SLA 2016,                                                               
sec. 79, ch. 1, 4SSLA 2017, sec.  81, ch. 1, 4SSLA 2017, and sec.                                                               
83, ch. 1, 4SSLA 2017; and providing for an effective date."                                                                    
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SJR  1                                                                                                                  
SHORT TITLE: CONST AM: GUARANTEE PERM FUND DIVIDEND                                                                             
SPONSOR(s): SENATOR(s) WIELECHOWSKI                                                                                             
                                                                                                                                
01/18/17       (S)       PREFILE RELEASED 1/9/17                                                                                

01/18/17 (S) READ THE FIRST TIME - REFERRALS

01/18/17 (S) STA, JUD, FIN 02/09/17 (S) STA AT 3:30 PM BUTROVICH 205 02/09/17 (S) Heard & Held 02/09/17 (S) MINUTE(STA) 03/07/17 (S) STA AT 3:30 PM BUTROVICH 205 03/07/17 (S) Moved SJR 1 Out of Committee 03/07/17 (S) MINUTE(STA) 03/08/17 (S) STA RPT 1DNP 4NR 03/08/17 (S) NR: DUNLEAVY, EGAN, GIESSEL, WILSON 03/08/17 (S) DNP: COGHILL 02/28/18 (S) MOTION TO DISCHARGE FROM JUD COMMITTEE FAILED Y6 N14 03/07/18 (S) MOTION TO DISCHARGE FROM JUD COMMITTEE FAILED Y7 N13 04/06/18 (S) UR 48(A) REQUEST RECEIVED 04/06/18 (S) JUD WAIVED PUBLIC HEARING NOTICE,RULE 23 UC 04/07/18 (S) JUD AT 10:00 AM BELTZ 105 (TSBldg) WITNESS REGISTER ACTION NARRATIVE 10:00:41 AM CHAIR JOHN COGHILL called the Senate Judiciary Standing Committee meeting to order at 10:00 a.m. Present at the call to order were Senators Costello, Kelly, Wielechowski, and Chair Coghill. Senator Shower joined the committee soon thereafter. 10:01:02 AM CHAIR COGHILL stated that the committee would hear three bills. Senator Wielechowski will introduce SJR 1 and the intention is to lay it aside and deal with public testimony later. Next, Senator Costello will introduce SB 127 regarding criminal justice reform. Finally, HB 214 dealing with the Alaska Safe Children's Act and naming it Bree's Law will be heard. He related that his normal practice is to hear the introduction of bills and to deal with public testimony later. He added that it was unfortunate that many people were notified that public testimony would be taken but that was not his intention. SJR 1-CONST AM: GUARANTEE PERM FUND DIVIDEND 10:02:09 AM CHAIR COGHILL announced the consideration of SJR 1. 10:02:18 AM SENATOR BILL WIELECHOWSKI, Alaska State Legislature, Juneau, Alaska, sponsor of SJR 1, stated that this resolution would allow the people of Alaska to vote on whether to enshrine the current calculation and inflation-proofing of the Alaska Permanent Fund Dividend (PFD) in the Constitution of the State of Alaska. That is the only way to truly protect the dividend. He related that many Alaskans were shocked when the governor cut the permanent fund dividend by over $1,000 in 2016. Then the legislature cut it again last year. When this was challenged, the Alaska Supreme Court held that the governor and legislature could adjust the dividend as they wished. This means there is absolutely no protection for the permanent fund dividend unless it is put in the constitution. That is what SJR 1 does. He said it's important to remember that the PFD reflects Alaskans ownership share in the state's oil wealth. The current value of the Alaska Permanent Fund is roughly $60 billion and Art. IV, Sec. 15 of the Alaska Constitution the Permanent Fund constitutional amendment requires that at least 25 percent of mineral lease rentals, royalties, royalty sale proceeds, federal mining revenue-sharing payments, and bonuses received by the state go into the permanent fund. He noted there is a statute that says that 50 percent of royalties for certain fields after a certain year go into the permanent fund, but it is a relatively small amount. SENATOR WIELECHOWSKI refuted the claim that the PFD is an entitlement. He pointed out that the subsurface rights in Alaska belong to the people collectively and that there is a constitutional obligation under Art. VIII, Sec. 2 to ensure that these resources are utilized "for the maximum benefit of the people." He said the authors of the 1982 Permanent Fund Dividend legislation understood this very clearly and tied the current PFD to this constitutional obligation. They understood that every Alaskan had a right to their share of the oil wealth and the best, most efficient way to do that was through a dividend program. He posited that in the scheme of things Alaskans have gotten a very small share of the oil wealth. He pointed out that 100 percent of state property taxes, corporate income taxes, and production taxes go to state government, as well as 75 percent of all royalties. The royalty rate is typically 12.5 percent and the people get just a 25 percent share of that. This means just 3.125 percent of the value of Alaska's oil goes to the permanent fund. Alaskans only get 50 percent of the earnings generated from those contributions. The rest is available for government and remains available to government under SJR 1. He shared several points to illustrate the impact the PFD has on individuals, businesses and the economy. The Institute of Social and Economic Research (ISER) at UAA found that tens of thousands of Alaskans are removed from poverty because of the PFD. Alaska has the lowest income inequality in the nation because of the PFD. ISER also found that the PFD creates thousands of jobs in Alaska. SENATOR WIELECHOWSKI said inflation proofing is responsible for a large portion of the current value of the permanent fund and he believes the corpus of the fund should continue to be protected through inflation proofing. He said three essential statutes create the permanent fund dividend program AS 37.13.145, AS 37.13.140, and AS 43.23.025. SJR 1 essentially places these statutes in the constitution to constitutionally require the PFD be paid at its current formula and inflation- proofing to continue. He offered to answered questions. 10:05:45 AM SENATOR SHOWER joined the committee. 10:07:38 AM CHAIR COGHILL requested a sectional analysis. SENATOR KELLY stated that the conflation of the dividend and subsurface rights is an interesting but incorrect opinion. He maintained that that was never the intent of the founders of the dividend. He reminded members that the Hammond plan that capped the dividend at $1,250 was intended to protect the corpus of the dividend from raids and it has been successful. 10:08:37 AM SENATOR WIELECHOWSKI said the former statement has some inaccuracies, based on his research of the minutes associated with the constitutional creation of the permanent fund as well as the bill that created the permanent fund dividend program. In the creation of the permanent fund there was very clear intent by the legislature when it passed CSHJR 39 to allow for the payment of dividends to the people of Alaska. They put a letter of intent in the record on March 24, 1976 where they specifically said they were adding language to "give future legislatures the maximum flexibility in using the fund's earnings ranging from adding to the fund principal to paying out a dividend to resident Alaskans." In the minutes from April 8, 1982, Representative Terry Gardner from Ketchikan stated that there was a need to distribute oil wealth to the people of Alaska. The Permanent Fund Dividend was directly tied to the responsibility under the constitution, Art. VIII, Sec. II. The constitutional obligation to provide for the maximum benefit for the people. In the letter of intent, Chairman Al Adams said that the payment of dividends shall have first call on 50 percent of the income of the permanent fund, regardless of whatever other uses the income is put to. That letter of intent still exists and is still binding. However, the dividend program does not have first call anymore under recent decisions by the legislature. He opined that that is a clear violation of the legislative intent. 10:11:31 AM SENATOR KELLY clarified that the point he was making was that the founders of the dividend did not link it to subsurface rights. He said he was in the legislature at the time and Senator Wielechowski didn't have the benefit of being an Alaska resident at that time. It was about protecting the permanent fund from a raid because it gave people a stake in it. It had nothing to do with subsurface rights. SENATOR WIELECHOWSKI conceded that he did not have a recollection of what happened at the time; he was nine-years- old. CHAIR COGHILL asked Senator Wielechowski to walk through the sectional. 10:12:34 AM SENATOR WIELECHOWSKI delivered the sectional analysis for SJR 21. Section 1 Establishes the Earnings Reserve Account as part of the constitution It will be a separate account in the fund and income from the fund shall be deposited into the ERA as soon as it is received. Money in the ERA may be appropriated only as provided in subsection (b) of bill Section 2. Section 2 - Adds new subsections to Art. IX, sec.15, Constitution of the State of Alaska. Subsection (b) places the current calculations from AS 17.13.140 into the constitution. Subsection (c) provides that the legislature shall inflation proof the fund. Subsection (d) places the current statute for calculating the dividend into the constitution Section 3 provides transition language that states that the earnings reserve account established in the 2018 amendments replaces the existing earnings reserve account established by law. Section 4 says the resolution shall be placed before the voters of Alaska at the next general election, which would be November 2018. CHAIR COGHILL asked him to go through the calculation in subsection (d) of bill Section 2. 10:15:05 AM SENATOR WIELECHOWSKI explained that the first sentence of subsection (b) states that the net income of the fund shall be computed annually on the last day of the fiscal year (January th 30 each year) following generally accepted accounting principles. Unrealized gains or losses are excluded. The second sentence provides that the income available for distribution equals 21 percent of the net income of the fund for the last five fiscal years. This follows the current formula in statute. The rationale for basing the distribution over five years is to smooth increases and decreases based on the performance of the stock market. The distribution may not exceed the balance in the earnings reserve account. The third sentence also tracks the formula in statute. The people of Alaska get 50 percent of the income available for distribution. That is based on the formula of 21 percent over the last five years. CHAIR COGHILL summarized this would enshrine the methodology for the dividend in the constitution. He asked if this would still allow the remainder to be used for government purposes. SENATOR WIELECHOWSKI said yes; it simply places the current framework in the constitution. It prohibits the legislature from cutting the dividend and prohibits the governor from vetoing the amount of the dividend. CHAIR COGHILL asked if he agrees that putting the dividend as the first right diminishes the amount available for government use. SENATOR WIELECHOWSKI agreed that any use of the earnings reserve does diminish future returns. That's the way it is now. CHAIR COGHILL expressed reservations about giving the dividend first right. 10:20:07 AM SENATOR WIELECHOWSKI reiterated that the resolution will guarantee a dividend, it will guarantee inflation proofing, it will guarantee that the corpus of the permanent fund remains viable, and it provides a significant amount that would be available for government use. CHAIR COGHILL said his major objection is that the dividend would impact what's available for government. 10:23:43 AM SENATOR SHOWER questioned whether enshrining the dividend in the constitution might at some point lead to a discussion about taxation. SENATOR WIELECHOWSKI said he believes the permanent fund question must be resolved and that will force a robust debate on how to resolve the budget situation. Until that discussion takes place, the legislature will take the easy way out and use the earnings reserve to balance the budget, which will diminish the peoples dividends. SENATOR SHOWER asked if he would also agree that enshrining the dividend in the constitution would limit the amount of money available for government to spend. 10:27:14 AM SENATOR WIELECHOWSKI replied it will bring the question to a head and elicit a healthy debate on how to solve the budget problem. 10:28:04 AM CHAIR COGHILL said he had been reluctant to hear this proposal, but the rules were used correctly to force a hearing. He said he obviously doesn't agree with this solution, but he does think the assessment of the problem is accurate. He asked the sponsor if he had any concluding comments. 10:28:55 AM SENATOR WIELECHOWSKI said this issue won't go away. An unscientific survey of hundreds of constituents showed that 73 percent support enshrining the PFD in the constitution. He said he is open to a better solution, but if the legislature fails to act the voters could make this an action item when they vote in 2020 on whether to hold a constitutional convention. He said it seems like the committee should take public testimony. 10:30:19 AM CHAIR COGHILL restated that he did not intend to take public testimony today and would hold SJR 1 in committee if there were no further comments. SENATOR WIELECHOWSKI asked if there was a specific date and time when public testimony would be taken. CHAIR COGHILL replied not at this point. 10:30:35 AM SENATOR WIEECHOWSKI moved to report SJR 1 from committee with individual recommendations [and attached fiscal note(s)]. 10:30:43 AM CHAIR COGHILL objected and adjourned the Senate Judiciary Standing Committee meeting at 10:30 a.m.

Document Name Date/Time Subjects
SB 127 - Supporting Document - ADN Op-Ed - 11-01-2017 - Sen Costello - We got it wrong_ Its time to repeal SB 91.pdf SJUD 4/7/2018 10:00:00 AM
SB 91
SB 127
SB 127 - Supporting Document - KTVA News Report - 02-07-2018 - Man arrested for vehicle theft back in custody weeks later.pdf SJUD 4/7/2018 10:00:00 AM
SB 127
SB 127 - Supporting Document - Anchorage Police Department - 2017 Anchorage Vehicle Theft Data.pdf SJUD 4/7/2018 10:00:00 AM
SB 127
SB 127 - Supporting Document - KTVA News Report - 02-21-2018 - APD notes repeat offenders in rising car thefts.pdf SJUD 4/7/2018 10:00:00 AM
SB 127
SB 127 - Sectional Analysis - Version J.pdf SJUD 4/7/2018 10:00:00 AM
SB 127
SB 127 - Supporting Document - KTVA News Report - 03-04-2018 - Third party custodians becoming a thing of the past in Anchorage.pdf SJUD 4/7/2018 10:00:00 AM
SB 127
SB 127 - Supporting Document - KTVA News Report - 03-07-2018 - Suspected repeat car thieves qualify for mandatory release.pdf SJUD 4/7/2018 10:00:00 AM
SB 127
HB 214 - Letter of Support - Steller Whitmore.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
HB 214 - Letter of Support - ANDVSA.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
SB 127 - Sponsor Statement.pdf SJUD 4/7/2018 10:00:00 AM
SB 127
HB 214 - Letter of Support - AWAIC.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
HB 214 - Letter of Support - STAR.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
HB 214 - Sponsor Statement.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
HB 214 - Letter of Support - Rachel Curtiss Steller.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
HB 214 - Letter of Support - VFJ.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
HB 214 - Supporting Document - ADN Article.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
HB 214 - Letter of Support - ANTHC.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
SJR 1 - Supporting Document - APRN Article.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
HB 214 - Letter of Support - Commissioner Johnson Support.pdf SJUD 4/7/2018 10:00:00 AM
HB 214
SJR 1 - Sponsor Statement.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - Annual Report 2014 PFD Division.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - Chart Employment Impact in Various Scenarios.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - Chart PF Historical Returns FY85 - FY15.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - Fact Sheet How PFDs Reduce Poverty in Alaska.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - Offical Election Pamphlet 1999.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - Data Tables PFDs and Poverty in Alaska.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - Income Inequality by State.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - ISER Alaska's Economy Historical Trends and Future Outlook.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - How the Dividend is Calculated.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - Support Opposition Statements to 1999 Special Election.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SB 127 - Supporting Document - ADN News Report - 10-21-2017 - 3 of 3 - How SB 91 has changed Alaskas criminal justice system.pdf SJUD 4/7/2018 10:00:00 AM
SB 91
SB 127
SB 127 - Supporting Document - ADN News Report - 10-21-2017 - 2 of 3 - From broad support to bipartisan backpedaling_ Tracing the path of Alaskas criminal justice overhaul.pdf SJUD 4/7/2018 10:00:00 AM
SB 127
SJR 1 - Supporting Document - Inflation Proofing to the PF FY80 - FY15.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SB 127 - Supporting Document - ADN News Report - 10-21-2017 - 1 of 3 - People in Anchorage are fed up with crime. Did SB 91 make it worse.pdf SJUD 4/7/2018 10:00:00 AM
SB 91
SB 127
SJR 1 - Supporting Document - The Alaska Survey PFD Poll.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1
SJR 1 - Supporting Document - PF Fund Financial History and Projections.pdf SJUD 4/7/2018 10:00:00 AM
SJR 1