Legislature(2015 - 2016)HOUSE FINANCE 519
04/07/2016 08:30 AM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB259 | |
| HB188 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 259 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | HB 188 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 7, 2016
8:48 a.m.
8:48:51 AM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 8:48 a.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Mark Luiken, Commissioner, Department of Transportation and
Public Facilities; Heather Fair, Right-Of-Way Chief,
Department of Transportation and Public Facilities; Brodie
Anderson, Staff, Representative Steve Thompson; Kim
Skipper, Staff, Representative Dan Saddler;
PRESENT VIA TELECONFERENCE
SUMMARY
HB 259 RELOCATION ASSISTANCE FOR FED. PROJ/PROG
HB 259 was REPORTED out of committee with a "do
pass" recommendation and with a previously
published zero fiscal note: FN1 (DOT).
HB 188 PERSON W/DISABILITY SAVINGS ACCOUNTS
CSHB 188 (FIN) was REPORTED out of committee with
a "do pass" recommendation and with one zero
fiscal note by the Department of Health and
Social Services and one fiscal impact note by the
Department of Revenue.
Co-Chair Thompson reviewed the agenda for the day.
HOUSE BILL NO. 259
"An Act relating to relocation assistance for
federally assisted projects and programs; and
providing for an effective date."
8:50:17 AM
MARK LUIKEN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, explained that the purpose of the bill
was to bring Alaska statutes into compliance with federal
law. He continued that when right-of-ways were acquired for
public transportation purposes federal law required the
department to compensate property owners for the value of
the property and to provide relocation benefits to
displaced families, businesses, and farms. Under the
federal initiative known as MAP 21 [Moving Ahead for
Progress], the previous federal transportation bill passed
in 2012, the state's funding partners had made it easier to
qualify and increase the maximum relocation assistance
available to the affected parties. Benefits paid to Alaska
families and businesses related to the program were
eligible for federal reimbursement. He thanked the
committee for hearing the bill and considering its passage.
He was happy to respond to any questions.
Co-Chair Neuman asked why the state needed the bill since
the state could already accept federal funds without
legislative approval.
8:51:53 AM
HEATHER FAIR, RIGHT-OF-WAY CHIEF, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, asked Co-Chair Neuman
to elaborate on his question.
Co-Chair Neuman restated his question. Ms. Fair confirmed
that the state already had authorization to accept federal
funding. However, the current statutes limited- the
department's ability to pay the funding to families, farms,
and businesses. There was a statutory limit that did not
currently comply with the new federal maximums. The bill
would bring the state into compliance with the new federal
maximums.
8:52:56 AM
Co-Chair Neuman asked Ms. Fair to explain further. He had
worked with the commissioner on expansions within the
state. He asked her to provide sideboards including the
previous limit and the current limit. Ms. Fair explained
that the limits had been raised under the MAP 21 bill for
federal highways. Under previous legislation by congress,
business reestablishment payments were only limited to
$10,000. They were now $20,000 under federal limits. Fixed
payments in lieu of actually moving and reestablishment
used to be only $20,000 and was now $40,000. The perimeters
around replacement housing for home owners used to include
having to live in your home 180 days and now was only 90
days. The limit used to be $22,500 and now it was $31,000.
The final increase was replacement housing for tenants that
were not owners. She explained that being a 90 day tenant
used to be $5250 and was now $7200.
8:54:18 AM
Co-Chair Neuman clarified that the state was required to
assist people that had been displaced because of eminent
domain. Commissioner Luiken responded in the affirmative.
He emphasized that it was purely the relocation assistance
piece of the process - to help people when they were
moving.
8:54:53 AM
Representative Wilson asked if it was all federal funding
or if there was state funding as well. Ms. Fair responded
that there was a portion of state funding that could be
applicable. The state's share was roughly 9 percent. It was
a small amount relative to the total cost of relocation.
The federal government's share was about 91 percent.
8:55:34 AM
Representative Wilson asked her for the definition of
"reasonable" noted in the language of the bill. Ms. Fair
replied that there were definitions in the federal
regulations to which they were being referred to in the
bill under Section 1.
8:55:59 AM
Representative Munoz asked how the department dealt with
businesses that had a loss of business due to a
transportation project. She wondered if there was a
reimbursement policy to deal with the issue. Ms. Fair
reported that the state did not compensate for business
losses, but it did compensate for relocation and for
reestablishment of a business under federal law.
Representative Kawasaki asked if similar legislation in
other states had eased eminent domain takings. He asked if
that was the purpose of the legislation.
Ms. Fair stated that it was specific to relocations apart
from the acquisitions. In general, congress' purpose was to
help assist families for relocation and businesses for
reestablishment. Any type of relocation could be disruptive
and congress recognized that prices had gone up, costs to
relocate had increased, and it was time to adjust the
amounts available to eligible parties.
Representative Kawasaki suggested that it was a substantive
policy call when discussing eminent domain and federal road
projects which he wanted the committee to be aware of.
8:57:56 AM
Representative Guttenberg relayed being involved with a
project in his district. The right-of-way had been on
private property. The department had been willing to move a
building or a septic system. He asked if there was an
example of a building needing to be moved or a similar
situation. He wondered about the qualifications. Ms. Fair
replied that the bill assisted with some qualifications
which allowed an easier pathway by reducing the number of
days that a person had to be a homeowner or tenant from 180
to 90 days. As far as relocating a building or a septic
system, that fell under the category of acquisition which
the bill did not address. Relocation meant moving to
another site.
8:59:52 AM
Representative Gattis asked about farms. She wondered why
farms were mentioned independent of businesses. She asked
about the distinction for farming.
Ms. Fair suggested that in federal law there was a
distinction for farming. The law was referred to in the new
legislation. She admitted that she was also a fellow
farmer.
Representative Gattis thought it was important to recognize
issues that accompanied a right-of-way on a farm. It was
possible that with a right-of-way farming could potentially
not be possible on either side or crossing could be
impeded. There had been certain situations that came up
around these issues. She wondered if such issues were the
reason for farming having a distinction over other
businesses.
Ms. Fair stated that the federal government made the
distinction because of the reasons Representative Gattis
had brought up. The bill did not address the specific
issues mentioned, only the relocation of a farm, for
example.
9:01:35 AM
Representative Gattis thought it was a lengthier
conversation. She suggested that some of the same issues
could apply to any business.
9:02:05 AM
Vice-Chair Saddler wanted to know historic numbers of
people that had been displaced by federally assisted
programs and the associated costs.
Ms. Fair stated that the effective date was in October
2014. There was just a hand full of people and businesses
that had increased eligibility. The state's share of the
costs were estimated to be $12,000 in retroactive payments.
Through a design process the state tried to minimize
relocations as best as possible understanding how
disruptive they could be.
9:03:04 AM
Vice-Chair Saddler wanted a firm number.
Ms. Fair stated that there were about a dozen people that
qualified for additional money under the statute since the
effective date.
9:03:35 AM
Representative Kawasaki referenced Section 3 regarding
business and moving expenses but not acquisitions, he
wondered if there had been any relocations resulting from
various right-of-way acquisitions in the Fairbanks area. He
asked if there were examples of a business having to move.
He provided an example of a veterinary clinic on the corner
of a Fairbanks intersection that had to be moved. He
wondered if his example was one where moving expenses were
compensated above the $10,000 cap.
Ms. Fair responded that the veterinarian clinic was an
example where the state assisted in relocation. It was
prior to October 2014. However, it would be an example
where they would be eligible for more in relocation but not
acquisition. Acquisition was always market value or
greater.
9:04:51 AM
Co-Chair Thompson OPENED public testimony.
9:05:06 AM
Co-Chair Thompson CLOSED public testimony.
9:05:11 AM
AT EASE
9:06:46 AM
RECONVENED
Commissioner Luiken reemphasized that the purpose of the
bill was to bring the state into compliance with federal
law so that the state was able to pay Alaska residents what
they would be due in additional relocation benefits.
Co-Chair Neuman MOVED to REPORT HB 259 out of committee
with individual recommendations and the accompanying fiscal
note(s). There being NO OBJECTION, it was so ordered.
HB 259 was REPORTED out of committee with a "do pass"
recommendation and with a previously published zero fiscal
note: FN1 (DOT).
9:07:49 AM
AT EASE
9:10:22 AM
RECONVENED
HOUSE BILL NO. 188
"An Act relating to financial accounts for persons
with disabilities; relating to financial institutions;
relating to property exemptions; relating to
securities; and providing for an effective date."
9:10:41 AM
Co-Chair Neuman MOVED to ADOPT the proposed committee
substitute for HB 188, Work Draft (29-LS0787\G). There
being NO OBJECTION, it was so ordered.
Representative Thompson invited his staff, Mr. Anderson to
the table to explain the differences between Version I [N]
and the committee substitute version G.
BRODIE ANDERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
explained the changes to the committee substitute. There
were four changes in the bill from the previous version. He
noted the first change was on Page 1 of the previous
Version P [N] on lines 2 and 3 in the title. It deleted
"Creating a limited property exemption for money in or paid
from a financial account in the program with an individual
with a disability". The second change was on Page 9, lines
2-8 of Version P [N]. It deleted Section 06.65.260, the
exemption from creditor claims which removed the exemption
from the bill. The third change was also in Version P [N]
on Page 11 [12], lines 20-12 [17-18]. It deleted conforming
language from subsection 11. The final change was all other
sections after the deletion were remunerated to reflect the
new sections.
9:12:37 AM
Representative Munoz asked Mr. Anderson to repeat the first
change. Mr. Anderson responded that it was a title change
which deleted the sections referencing the exemption. In
the previous version the lines were on Page 1, lines 2-3.
Vice-Chair Saddler wanted to answer two questions from
earlier meetings. There had been a question about whether
there was a need for funds in the ABLE account to be
protected from creditors. In the CS before the committee
the section was deleted that would have provided the
protection against creditors and state law including child
support orders. There was no inhibition to prevent a
creditor from going after the amount of funds in the
account. One of the questions that had been asked concerned
the lack of a zero fiscal note from Department of Health
and Social Services (DHSS). The department had consulted
with Department of Revenue (DOR) and currently there was a
zero fiscal note reflecting the minimal to implement the
bill. The cost could be covered with the department's
existing budget. There had been some discussion about what
level of disability qualified a person to open an ABLE
account and how a disability was determined. He answered
that a person had to either be eligible for supplemental
security income or meet the same standard. The standard
stated that the disability standard for children for
claiming benefits under the supplemental security income
program was based on the disability which meant that they
had to have marked and severe functional limitations. The
certification of the limitations had to include a copy of
the individual's diagnosis relating to that person's
relative impairments and signed by a licensed physician
under the penalty of perjury.
Vice-Chair Saddler continued that there was a question as
to how to be sure a person was using their ABLE account for
the appropriate expenses. The answer was that they had to
file the appropriate paperwork with the IRS to document
their deposits and their disbursements from their ABLE
account. If someone were to lie on their tax return they
would be subject to the same penalty that placed Al Capone
in jail. Lastly, it was asked at what level of precedence
did the state have in recovering Medicaid expenses from an
ABLE account. The state was fifth. He elaborated that the
order of precedence was that first their estate went to pay
the costs and expenses for the administration of the
estate; second, the regional funeral expenses; third, debts
and taxes with a federal preference for child support past
due payments; fourth, reasonable and necessary medical
expenses of the last illness of the person who died; fifth,
debts and taxes with preference including Medicaid
payments; and sixth, all other claims. If there was any
other money remaining it would go to the person's estate to
be disposed of by will or through the probate court
process.
9:15:50 AM
Representative Gattis thanked the sponsor. She thought the
bill was better in the current day than in the previous
day.
Vice-Chair Saddler appreciated the thoroughness of the
committee process.
9:16:16 AM
Representative Kawasaki asked about the fiscal note. He
stated that part of the ABLE Act was to shield assets
within the account for purposes of Medicaid and other
programs. He thought it would have a fiscal impact if the
account was no longer an asset of the individual.
Vice-Chair Saddler responded in the negative. He explained
that Medicaid was not a means except for the original
qualification. He relayed that the means testing was
primarily for supplemental security income.
9:17:03 AM
Representative Kawasaki asked if it included other programs
the state had specifically through the group that also had
asset tests.
Vice-Chair Saddler responded in the affirmative.
9:17:18 AM
Representative Gara remarked that there would be a certain
number of additional people who would qualify for Medicaid
which he thought was appropriate. He hoped in the following
year the legislature would not have to make additional cuts
to make up for it. He thought the individuals deserved
treatment. He asked Vice-Chair Saddler if he had an opinion
on the issue.
Vice-Chair Saddler did not see how it would add to the
categories of people who qualified for Medicaid.
9:17:56 AM
Representative Gara indicated the bill would help shield
assets from being counted which he thought was completely
fine. He thought some people would qualify for Medicaid who
currently did not.
9:18:15 AM
KIM SKIPPER, STAFF, REPRESENTATIVE DAN SADDLER, responded
that the bill was intended for disabled people, some who
could be on Medicaid and social security income. However,
she did not think it would add to the number of people on
Medicaid but would enable the people in the disabled
condition to save money.
Vice-Chair Saddler added that it would be people who were
disabled and often did not have income. He did not believe
there would be many people that would be working, earning
income, and having an ABLE account sheltering income. The
point of the bill was to shelter their income from interest
on an account.
9:19:14 AM
Representative Gara did not have a problem with additional
recipients. He just did not want to have to see an
additional reduction to offset it. He also asked if
disabled people would no longer be protected from creditors
on the ABLE account with the new version of the bill. He
wondered if the representative was comfortable with the
change.
Vice-Chair Saddler stated that he was correct. The
protections were removed in the newest version of the bill.
He was comfortable because he did not see much of a risk of
someone going bankrupt. There was an interest and concern
expressed about people that would potentially seek to abuse
the account. He did not see much of a risk and did not
think the protection was all that effective in the first
place.
9:20:22 AM
Representative Wilson stated that the definition from the
previous day versus how it was depicted in the current
version of the bill was much different. She was in support
of the bill. She knew folks who had wanted to get part time
jobs. However, social security took $2 away from a person
for every dollar they made which was not a big incentive to
get a job. She thought any extra income was a benefit. The
bill would allow folks to get a job without being
penalized. She really appreciated a better definition which
made her feel more comfortable with the legislation. She
thanked the bill sponsor.
9:21:28 AM
Co-Chair Neuman reviewed the fiscal notes from the bill.
9:22:07 AM
Co-Chair Neuman MOVED to REPORT CSHB 188 (FIN) out of
committee with individual recommendations and the
accompanying zero and fiscal impact notes. There being NO
OBJECTION, it was so ordered.
CSHB 188 (FIN) was REPORTED out of committee with a "do
pass" recommendation and with one zero fiscal note by the
Department of Health and Social Services and one fiscal
impact note by the Department of Revenue.
Co-Chair Thompson reviewed the agenda for the following
meeting.
ADJOURNMENT
9:23:01 AM
The meeting was adjourned at 9:23 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 188 NEW FN DOR T&T 4-6-16.pdf |
HFIN 4/7/2016 8:30:00 AM |
HB 188 |
| HB 188 CS WORKDRAFT FIN vG.pdf |
HFIN 4/7/2016 8:30:00 AM |
HB 188 |