Legislature(2001 - 2002)

04/26/2001 06:17 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     SENATE BILL NO. 193                                                                                                        
     "An Act relating to a study of the economic and social effects                                                             
     of the permanent fund dividend on the state."                                                                              
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Kelly  informed that  this  bill speaks  to  a 1990  court                                                            
decision on Lindly vs. Malone.                                                                                                
                                                                                                                                
Co-Chair Donley gave a  history on the issue, beginning in 1988 when                                                            
he sponsored  legislation  to change the  residency requirement  for                                                            
the permanent  fund dividend from six months to two  years. He noted                                                            
a clause  was inserted in  this bill providing  that in the  event a                                                            
court  found that  two  years is  too long,  the  requirement  would                                                            
automatically become one year.                                                                                                  
                                                                                                                                
Co-Chair  Donley stated  that since  this time,  he has learned  the                                                            
longest  length  of  residency  that is  acceptable  for  a  benefit                                                            
qualification, according  to the United States Supreme Court, is two                                                            
years.  He  detailed  the  ruling,   which  found  that  in  certain                                                            
instances, such  as with in-state tuition fees, it  is acceptable to                                                            
stipulate up  to two years as the  residency requirement  to prevent                                                            
exploitation  from  a transient  population.  He opined  the  Alaska                                                            
permanent  fund  is  a comparable  benefit  in  its  attraction.  He                                                            
surmised  that the  more lengthily  two-year  residency requirement                                                             
could be imposed  in Alaska if there  was evidence that people  were                                                            
moving to the state for the purpose of receiving the dividend.                                                                  
                                                                                                                                
Co-Chair Donley continued,  saying that when a state court found the                                                            
1988 legislation unconstitutional,  the decision was not appealed to                                                            
the state Supreme Court  because the state had not yet developed the                                                            
necessary evidence  to show that this benefit was  the reason people                                                            
were moving to Alaska.                                                                                                          
                                                                                                                                
Co-Chair  Donley  pointed  out  the  amount  of  the  dividends  are                                                            
significantly higher then  they were in 1988. He noted the residency                                                            
requirement was  doubled through the legislation from  six months to                                                            
one year, but  that the matter of  a two-year residency requirement                                                             
remained unresolved.                                                                                                            
                                                                                                                                
Co-Chair Donley  explained that SB  193 provides that a study  would                                                            
be conducted to  learn if it could be determined whether  there is a                                                            
problem with people attracted  to the state because of the permanent                                                            
fund dividend  and if a longer residency  requirement is  justified.                                                            
                                                                                                                                
Senator Austerman inquired  about the Longevity Bonus Program, which                                                            
provides  subsidies  to  elderly  Alaskan  residents,  and  if  this                                                            
program is in the process of being phased out.                                                                                  
                                                                                                                                
Co-Chair Donley affirmed.  He noted the original legislation of 1988                                                            
increased the  residency requirement  for this program as  well, but                                                            
that this is no longer  an issue since the program no longer accepts                                                            
new participants.                                                                                                               
                                                                                                                                
Co-Chair Donley  moved to adopt CS SB 193, 22-LS0828\J  as a working                                                            
draft.                                                                                                                          
                                                                                                                                
There was no objection and the committee substitute was ADOPTED.                                                                
                                                                                                                                
Amendment  #1: This  conceptual  amendment replaces  "general  fund"                                                            
with "permanent  fund earnings account" in Section  2 on page 2 line                                                            
2  of the  committee  substitute.  The  amended  language  reads  as                                                            
follows.                                                                                                                        
                                                                                                                                
     The  sum of $200,000  is appropriated  from the permanent  fund                                                            
     earnings account to  the Legislative Council for a study of the                                                            
     economic  and social effects of the permanent  fund dividend on                                                            
     the state.                                                                                                                 
                                                                                                                                
Senator Leman  commented that a permanent fund account,  rather then                                                            
the general  fund, is normally  used when  addressing legal  matters                                                            
regarding  the  permanent  fund and  would  be appropriate  in  this                                                            
legislation as well.                                                                                                            
                                                                                                                                
Senator Leman moved for adoption of the amendment.                                                                              
                                                                                                                                
Senator Ward objected.                                                                                                          
                                                                                                                                
There was some question  as to the specific name of the fund and the                                                            
Division of Legislative  Finance was requested to supply the correct                                                            
information.                                                                                                                    
                                                                                                                                
Senator  Wilken  wanted  to  ensure the  correct  fund  account  was                                                            
inserted into the language.                                                                                                     
                                                                                                                                
The bill was HELD in Committee until later in the meeting.                                                                      
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 193                                                                                                        
     "An Act relating to  a study of the economic and social effects                                                            
     of the permanent fund dividend on the state."                                                                              
                                                                                                                                
                                                                                                                                
[This  bill was  held earlier  in  the meeting.  A  motion to  adopt                                                            
Amendment #1 was on the table.]                                                                                                 
                                                                                                                                
Senator Leman  moved to amend  his amendment  to change the  funding                                                            
source from  the permanent fund earnings  account to permanent  fund                                                            
corporate receipts. The amended language reads as follows.                                                                      
                                                                                                                                
     The  sum of $200,000  is appropriated  from the permanent  fund                                                            
     corporate  receipts to the Legislative  Council for  a study of                                                            
     the economic and social  effects of the permanent fund dividend                                                            
     on the state.                                                                                                              
                                                                                                                                
Senator  Leman  explained  the  change  to  the  funding  source  as                                                            
recommended by the Division of Legislative Finance.                                                                             
                                                                                                                                
Senator  Ward  removed   his  objection  to  the  adoption   of  the                                                            
amendment.                                                                                                                      
                                                                                                                                
The amendment was AMENDED and ADOPTED without objection.                                                                        
                                                                                                                                
Amendment  #2: This conceptual  amendment  deletes "the preparation                                                             
of" proceeding  "a study of" from Section 1. LEGISLATIVE  INTENT. On                                                            
page  1, lines  8 and 9  of the  committee substitute.  The  amended                                                            
language reads as follows.                                                                                                      
                                                                                                                                
     The  legislature  intends  that  the  Legislative  Council,  in                                                            
     consultation  with  the Department  of Community  and  Economic                                                            
     Development, the Department  of Health and Social Services, and                                                            
     the  Department of  Labor and  Workforce  Development, use  the                                                            
     appropriation  made in  sec. 2  of this Act  to contract  for a                                                            
     study of the economic  and social effects of the permanent fund                                                            
     dividend on the state.                                                                                                     
                                                                                                                                
Co-Chair  Kelly moved  for adoption  and explained  this allows  the                                                            
state  to contract  with  a  private organization  to  complete  the                                                            
study.                                                                                                                          
                                                                                                                                
Without objection, the amendment was ADOPTED.                                                                                   
                                                                                                                                
Senator Green  offered a motion to  move CS SB 193, 22-LS0828\J,  as                                                            
amended  from  Committee  with  new  Legislature   fiscal  note  for                                                            
$200,000.                                                                                                                       
                                                                                                                                
The bill MOVED from Committee without objection.                                                                                
                                                                                                                                
AT EASE 8:46 PM / 8:46 PM                                                                                                       
                                                                                                                                

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