Legislature(1997 - 1998)
03/27/1997 08:04 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 27, 1997
8:04 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Ethan Berkowitz
Representative Fred Dyson
Representative Kim Elton
Representative Mark Hodgins
Representative Ivan Ivan
Representative Al Vezey
MEMBERS ABSENT
All members present.
COMMITTEE CALENDAR
HOUSE BILL NO. 67
"An Act relating, for purposes of eligibility for a permanent fund
dividend, to an absence from the state while on an unpaid
sabbatical under the longevity bonus program; and providing for an
effective date."
- MOVED CSHB 67(STA) OUT OF COMMITTEE
HOUSE BILL NO. 143
"An Act relating to the art in public places requirements for
state-owned and state-leased buildings and facilities."
- MOVED HB 143 OUT OF COMMITTEE
HOUSE BILL NO. 81
"An Act relating to the members of the board and staff of the
Alaska Permanent Fund Corporation."
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 67
SHORT TITLE: LONGEVITY BONUS SABB'TCL:PFD ELIGIBILITY
SPONSOR(S): REPRESENTATIVE(S) RYAN
JRN-DATE JRN-PG ACTION
01/15/97 66 (H) READ THE FIRST TIME - REFERRAL(S)
01/15/97 67 (H) STATE AFFAIRS, LABOR & COMMERCE, FIN
02/25/97 (H) STA AT 8:00 AM CAPITOL 102
02/25/97 (H) MINUTE(STA)
03/27/97 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 143
SHORT TITLE: REPEAL ART IN PUBLIC PLACES REQUIREMENT
SPONSOR(S): REPRESENTATIVE(S) VEZEY, Hodgins
JRN-DATE JRN-PG ACTION
02/17/97 374 (H) READ THE FIRST TIME - REFERRAL(S)
02/17/97 375 (H) STATE AFFAIRS
03/20/97 (H) STA AT 8:00 AM CAPITOL 102
03/20/97 (H) MINUTE(STA)
03/22/97 (H) STA AT 10:00 AM CAPITOL 102
03/25/97 841 (H) COSPONSOR(S): HODGINS
03/27/97 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
REPRESENTATIVE JOE RYAN
Alaska State Legislature
State Capitol, Room 420
Juneau, Alaska 99801-1182
Telephone: (907) 465-3875
POSITION STATEMENT: Sponsor of HB 67.
NANCI A. JONES, Director
Permanent Fund Dividend Division
Department of Revenue
P.O. Box 110460
Juneau, Alaska 99811-0460
Telephone: (907) 465-2323
POSITION STATEMENT: Provided testimony on HB 67.
ACTION NARRATIVE
TAPE 97-35, SIDE A
Number 0001
The House State Affairs Standing Committee was called to order by
Chair Jeannette James at 8:04 a.m. Members present at the call to
order were Representatives James, Berkowitz, Dyson, Elton, Ivan and
Vezey. Members absent were Hodgins. Representative Mark Hodgins
arrived at 8:20 a.m.
HB 67 - LONGEVITY BONUS SABB'TCL:PFD ELIGIBILITY
The first order of business to come before the House State Affairs
Standing Committee was HB 67, "An Act relating, for purposes of
eligibility for a permanent fund dividend, to an absence from the
state while on an unpaid sabbatical under the longevity bonus
program; and providing for an effective date."
CHAIR JEANNETTE JAMES called on Representative Joe Ryan, sponsor of
HB 67, to present the bill.
Number 0054
REPRESENTATIVE JOE RYAN, Alaska State Legislature, explained HB 67
allowed an exception for folks who were taking an unpaid sabbatical
to retain their eligibility for the permanent fund check. A
sabbatical could only be taken once every five years. There were
only 139 people who had taken advantage of it. "We actually save
money on this thing because for the time they're on a sabbatical
they don't get their longevity bonuses." They retain their
eligibility for their longevity bonus when they return, however.
The exception in HB 67 allowed for them to retain their eligibility
for their permanent fund checks so that they were not penalized
twice. This small concession was the least that the state could do
for them.
Number 0209
REPRESENTATIVE AL VEZEY asked somebody to explain an "unpaid
sabbatical".
Number 0219
REPRESENTATIVE RYAN replied people were allowed to leave the state
once every five years for certain purposes while not losing their
eligibility for the permanent fund check.
Number 0281
CHAIR JAMES explained - generally - it was time off from work with
pay. In the beginning it had a religious connotation, but had
transcended into time off to do something entirely different for
one year.
Number 0375
REPRESENTATIVE RYAN explained it allowed for seniors, who had
stayed in Alaska for a long period of time withstanding the
hardships of Alaska, to go outside and travel without being
penalized by losing their longevity bonuses. For many, the
longevity bonus was a substantial part of their retirement income.
"I don't think it's an undue hardship on the state to allow these
people to enjoy some time in their later years to do some of the
things that they worked very hard for."
Number 0443
REPRESENTATIVE KIM ELTON stated in this context an unpaid
sabbatical meant a long vacation. The difference was that a person
could reestablish his or her eligibility for the permanent fund
dividend program; whereas, a person would loose his or her
eligibility forever for the longevity bonus program.
Number 0496
REPRESENTATIVE RYAN replied there was an exception made for the
sabbatical. Seniors would retain their eligibility for the
longevity bonus program, but they would lose it for the time that
they were absent. The state, therefore, was saving money because
the longevity bonus came out of the General Fund. So, we were
saving money on one hand and just allowing for the participation in
the permanent fund program on the other hand.
Number 0556
NANCI A. JONES, Director, Permanent Fund Dividend Division,
Department of Revenue, was the first person to testify in Juneau.
The division would like to offer an alternative to HB 67.
Currently, a person taking a sabbatical, depending on when he or
she left, would not disqualify for the permanent fund dividend.
The regulations allowed for 180 days of absence in one calendar
year. Therefore, if a person straddled a year; for example, six
months of absence in one year, he or she would not lose eligibility
for a dividend check. As an alternative, the division could by
regulation or statute ensure that a person would not lose
eligibility in the second year, if he or she chose not to straddle
a year. For example, if a person was gone an entire calendar year,
he or she would not be eligible for the first dividend and because
he was not in the state prior to the new qualifying year he would
also miss eligibility for the second dividend. By addressing this
through regulation, it put both programs on equal footing.
Moreover, there were 29,733 people who received at least one
longevity bonus last year. The bill would segregate these people
by creating an elite group.
Number 0730
CHAIR JAMES wondered if HB 67 would allow for the 29,733 people Ms.
Jones referenced to receive their permanent fund dividend check.
How would they affect the longevity bonus program negatively?
Number 0781
MS. JONES replied it was an impact on the differences between the
permanent fund dividend and the longevity bonus program. She was
not inferring that the bill would impact the longevity bonus
program.
Number 0795
CHAIR JAMES asked Representative Ryan if the 139 people he
referenced earlier had already taken their sabbaticals since
passing the bill last year?
Number 0808
REPRESENTATIVE RYAN replied the 139 people were either taking
advantage of the opportunity, or who would take advantage of the
opportunity. In addition, these were older people so the numbers
would change due to the natural attrition rate of death, for
example.
Number 0829
CHAIR JAMES stated there would be 139 more people who would receive
a permanent fund dividend check under HB 67 than otherwise.
MS. JONES replied, "Correct." But only if they were not gone more
than 180 days in one calendar year.
Number 0859
CHAIR JAMES stated if they were gone more than 365 days the whole
thing did not apply to them.
CHAIR JAMES further stated the alternative, according to Ms. Jones,
was to ensure by statute or regulation that a person would not lose
eligibility in the second year; however, there was no protection
for the first year. She asked Ms. Jones how the first year would
be protected?
Number 0952
MS. JONES replied to be on equal footing with the longevity bonus
program they would not be eligible the year that they took their
sabbatical. But, they would be eligible upon return for the second
year.
Number 0980
CHAIR JAMES stated that was less of a deal than what HB 67 was
asking for. House Bill 67 asked for no cessation of the permanent
fund dividend while a person was gone.
Number 0996
REPRESENTATIVE ELTON stated, under the current rules, a person
could be gone from July 15, 1997 to June 15, 1998; still receive a
dividend for this year and next year; and still be able to take two
weeks of vacation in each of the two years.
MS. JONES replied, "Correct."
REPRESENTATIVE ELTON asked Ms. Jones if he took a two year
sabbatical, for example, would he still be covered? There did not
appear to be a time-frame involved.
Number 0996
MS. JONES replied the sabbatical was a 12-month program.
Number 1065
REPRESENTATIVE VEZEY wondered how the Governor's bill that put a
ceiling on income for recipients of the longevity bonus would
affect those who would not be taking a sabbatical leave.
Number 1124
MS. JONES responded that as long as they were not absent there
would not be a problem with their dividend.
Number 1143
REPRESENTATIVE VEZEY asked Ms. Jones if they would be eligible to
take a sabbatical leave because their incomes were too high?
MS. JONES replied, "No." The only sabbatical that the permanent
fund dividend program recognized was from the university system
statewide.
REPRESENTATIVE VEZEY asked Ms. Jones if that was provided for in
statute?
MS. JONES replied, "Yes."
Number 1166
REPRESENTATIVE ETHAN BERKOWITZ wondered if a person would still be
eligible under HB 67 to take a permanent fund sabbatical if a
person's income was outside of the cap proposed by the Governor.
Number 1198
CHAIR JAMES replied the disallowance would have to be included in
the second piece of legislation; otherwise, there would be a
conflict. House Bill 67 referred to those who qualified for a
longevity bonus and if something else would supersede that
qualification then it should be referenced.
Number 1251
REPRESENTATIVE RYAN stated the exemption was under AS 47.45.030.
If a person did not qualify as a result of a subsequent piece of
legislation for the longevity bonus sabbatical, then it would not
apply and there would be nothing to lose. Under As 47.45.030, a
person could be gone for a whole year, but he or she would have to
give up the longevity bonus while retaining eligibility for the
permanent fund dividend upon return. If a person did not have a
longevity bonus to give up then he or she would not qualify for the
sabbatical.
Number 1287
CHAIR JAMES said everyone had a different view of who the
recipients of the longevity bonus were: seniors in the Pioneer
Homes, seniors who gathered at senior centers, and seniors who were
still working. Therefore, sabbatical for some would be a choice
and for others it would be an assignment. In addition, in-light-of
the Governor's bill, there was an argument that those who were
working did not need the permanent fund dividend or a sabbatical.
In summary, she did not know how she felt about the issue. She
mentioned she had a conflict of interest because she was a
recipient of the longevity bonus. She did see the merits of the
bill, however.
Number 1470
REPRESENTATIVE RYAN explained, as a scenario, there were very few
people in Alaskan who had an extended family here because most of
us were from somewhere else. In addition, our children lived
outside because of the lack of employment opportunities in Alaska.
The sabbatical provision, therefore, gave the seniors an
opportunity to renew family relations outside of Alaska with their
children and grandchildren. It also allowed for them to tie up
their loose ends before their time came without being penalized.
That was what the original longevity bonus exemption was for. "I
thought that this would be more of an effort to help those folks
because traditionally older folks did not have a lot of money to do
these things."
Number 1525
REPRESENTATIVE ELTON stated the provision only allowed for the
longevity recipients which was a diminishing pool of people.
Therefore, there would be those seniors in time who would not be
able to visit their grandchildren on a sabbatical without losing
their permanent fund dividend.
Number 1555
CHAIR JAMES replied, "Correct." That was the way the bill was
written.
Number 1561
REPRESENTATIVE BERKOWITZ wondered if the longevity bonus problem
could be side stepped if the language in AS 47.45.035 was adopted.
If the intent was to ensure that Alaska's seniors could take a
sabbatical while retaining their permanent fund eligibility, there
was no reason to relate it to the receipt of the longevity bonus.
Number 1595
CHAIR JAMES replied that was an option. She was not sure if
Representative Ryan intended to open the bill up that big, however.
Number 1603
REPRESENTATIVE RYAN stated he had not planned at this time to offer
that opportunity. "I just thought that since these people were
giving up one thing, we wouldn't double their penalties." It was
a good subject for another bill, but he did not want to include it
in HB 67; it would be a difficult proposition to sell.
Number 1639
CHAIR JAMES stated there was an assumption that longevity bonus
recipients had been in Alaska longer than others. In 1992, 40
percent of the recipients had not been in the state for more than
3 years. However, now that it was phased out and the longer that
it went by, it meant that those people had been in Alaska longer
than just anybody who qualified for a permanent fund.
Number 1664
REPRESENTATIVE MARK HODGINS moved that HB 67 move from the
committee with individual recommendations and the attached fiscal
note(s).
Number 1676
REPRESENTATIVE BERKOWITZ objected for discussion purposes.
REPRESENTATIVE BERKOWITZ stated he was unclear if there had been
any modification of the concerns raised about attaching eligibility
to the receipt of the longevity bonus. He wanted to be sure that
people retained their ability to collect on the permanent fund
dividend even if their ability for the longevity bonus was
challenged through the Governor's bill. In his district, there
were a lot of seniors who qualified for the longevity bonus. He
did not want it so that they did not receive their permanent fund
as well because they took a sabbatical.
Number 1719
CHAIR JAMES stated she was concerned about opening the provision up
broadly. She was also concerned about creating a benefit for
newcomers. She did not know how to identify them without including
the newcomers, however.
REPRESENTATIVE BERKOWITZ stated a time limit could be included.
Otherwise, the Governor's bill would disqualify people in the
future.
Number 1780
REPRESENTATIVE RYAN responded the thrust of the bill was quid pro
quo. "You give up your longevity bonus but we will help you retain
your permanent fund eligibility." He did not intend to open the
subject up for everybody. The merits were fine, but he did not
want to go that far in HB 67.
Number 1810
CHAIR JAMES asked Representative Berkowitz if he was offering a
conceptual amendment?
Number 1816
REPRESENTATIVE BERKOWITZ explained he did not want to expand the
universe of those who would be eligible today under HB 67.
However, tomorrow a different contingency could shrink the universe
through means testing. For example, "My feeling is people who get
means tested out of a longevity bonus have already made a sacrifice
and for them to stand by and watch while their friends go on a
sabbatical and still retain their permanent fund eligibility while
they're unable to do so. The equal protection specter was much
stronger in the situation that I have described than it is
currently where there are people who are not even eligible for the
longevity bonus as opposed to people who would be eligible but they
made too much money."
Number 1868
CHAIR JAMES asked the committee members if they understood the
discussion on the conceptual amendment? She explained it would
include all of the people who currently qualified for the longevity
bonus and an effective date.
Number 1889
REPRESENTATIVE RYAN stated we have this issue before us now. We
did not know what would happen to the Governor's bill. He
suggested taking the issues one at a time. He reiterated the
sabbatical was established so that individuals would lose
something. Therefore, if they were ruled out by the Governor's
bill they would have nothing to lose. There would not be a reason
to give them a permanent fund dividend because they had already
lost their longevity bonus through means testing.
Number 1919
CHAIR JAMES stated she understood the concerns of Representative
Ryan, but a member of the House State Affairs Standing Committee
had offered a conceptual amendment so it was up to the committee
members now.
Number 1928
REPRESENTATIVE BERKOWITZ moved the conceptual amendment to include
the following language:
"Those who qualify for the longevity bonus as of January 1, 1997
would as of that date be eligible for an unpaid sabbatical."
CHAIR JAMES asked the committee members if they understood the
conceptual amendment offered by Representative Berkowitz?
Number 1946
REPRESENTATIVE IVAN IVAN asked Representative Berkowitz to run that
by him again.
CHAIR JAMES replied HB 67 would enable seniors to not lose their
permanent fund dividend eligibility while they were on an unpaid
sabbatical under the longevity bonus program. The conceptual
amendment would qualify those as of January 1, 1997, to prevent a
subsequent bill from denying them for another reason from getting
their longevity bonus and permanent fund dividend if they went on
a sabbatical.
CHAIR JAMES asked if there was any objection to the conceptual
amendment?
Number 2004
REPRESENTATIVE HODGINS objected. A roll call vote was taken.
Representatives James, Berkowitz, Dyson, Elton, Ivan and Vezey
voted in favor of the motion. Representative Hodgins voted against
the motion. The conceptual amendment was accepted.
CHAIR JAMES asked if there was an objection to moving the bill from
the committee as amended? There was no objection, CSHB 67(STA) was
so moved from the House State Affairs Standing Committee.
HB 143 - REPEAL ART IN PUBLIC PLACES REQUIREMENT
The next order of business to come before the House State Affairs
Standing Committee was HB 143, "An Act relating to the art in
public places requirements for state-owned and state-leased
buildings and facilities."
CHAIR JAMES called on Representative Vezey, sponsor of HB 143, to
present the bill.
Number 2068
REPRESENTATIVE VEZEY said he did not have any further comments to
make on HB 143. The committee had debated the bill and there had
been public testimony.
Number 2074
REPRESENTATIVE VEZEY moved that HB 143 move from the committee with
individual recommendations and the attached fiscal note(s).
Number 2079
REPRESENTATIVE ELTON objected.
Number 2088
REPRESENTATIVE IVAN commended the efforts of the sponsor and the
intention of the bill. However, as a minority member of the
majority, he did not see how an appropriation bill of his would go
through. Currently, the 1 percent protected the interest and
included local culture. He, therefore, saw the program as
including ownership and giving respect while furthering local
cultures. He would vote against the bill, but he did respect the
intent.
Number 2159
CHAIR JAMES stated she supported art in public places without a
doubt and saw the benefits. She had a problem, however, with the
percent for art program as a mandate. She would vote to move the
bill from the committee, but she did not know how she would vote on
the bill on the floor of the House of Representatives.
Number 2217
REPRESENTATIVE BERKOWITZ stated he just listened to a "no frills"
prison bill in another committee - the House Judiciary Standing
Committee. It was unfortunate that this bill was also imposing "no
frills" to the rest of us. The percent for art program did not
cost the state anything and it benefitted the artists and the
communities.
CHAIR JAMES called for the roll call vote. Representatives James,
Dyson, Hodgins and Vezey voted in favor of the motion.
Representatives Berkowitz, Elton and Ivan voted against the motion.
House Bill 143 was so moved from the House State Affairs Standing
Committee.
ADJOURNMENT
Number 2217
CHAIR JAMES adjourned the House State Affairs Standing Committee
meeting at 8:45 a.m.
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