Legislature(2007 - 2008)SENATE FINANCE 532

04/02/2007 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 130 Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    SENATE FINANCE COMMITTEE                                                                                  
                         April 2, 2007                                                                                        
                           9:06 a.m.                                                                                          
CALL TO ORDER                                                                                                               
Co-Chair  Bert  Stedman  convened the  meeting  at  approximately                                                               
9:06:44 AM.                                                                                                                   
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Kim Elton                                                                                                               
Senator Joe Thomas                                                                                                              
Senator Fred Dyson                                                                                                              
Senator Donny Olson                                                                                                             
Also Attending:   DARWIN PETERSON,  Staff to Senator  Lyda Green;                                                             
GINNY AUSTERMAN,  Staff to Senator Donny  Olson; KARLEEN JACKSON,                                                               
Commissioner,  Department of  Health and  Social Services;  JANET                                                               
CLARKE, Assistant Commissioner,  Finance and Management Services,                                                               
Department  of Health  and  Social  Services; ELLIE  FITZJARRALD,                                                               
Director,  Division of  Public Assistance,  Department of  Health                                                               
and Social Services;                                                                                                            
Attending  via Teleconference:   From  an offnet  location: DUANE                                                             
BANNOCK,  Director, Division  of  Motor  Vehicles, Department  of                                                               
SUMMARY INFORMATION                                                                                                         
SB 130-RANCH, FARM, DAIRY VEHICLE REGISTRATION                                                                                  
The  Committee  heard from  the  sponsor  and the  Department  of                                                               
Administration. The bill was reported from Committee.                                                                           
SB   4-SENIOR CARE PROGRAM                                                                                                      
The  Committee  heard from  the  sponsor  and the  Department  of                                                               
Health and  Social Services. A  committee substitute  was adopted                                                               
and the bill was held in Committee.                                                                                             
9:07:41 AM                                                                                                                    
     SENATE BILL NO. 130                                                                                                        
     "An Act relating to the registration of certain vehicles                                                                   
     owned by ranchers, farmers, or dairy workers."                                                                             
This was  the first hearing for  this bill in the  Senate Finance                                                               
Co-Chair  Stedman  announced  intent  to report  this  bill  from                                                               
Committee at this hearing.                                                                                                      
9:08:30 AM                                                                                                                    
DARWIN  PETERSON, Staff  to Senator  Lyda Green,  sponsor of  the                                                               
bill, testified  that the need  for this legislation  was brought                                                               
to  Senator Green's  attention by  a  constituent who  is also  a                                                               
farmer. State statute provides  for licensing classifications for                                                               
numerous  types  of vehicles.  One  such  classification is  farm                                                               
Mr.  Peterson informed  that prior  to 1978  statute limited  the                                                               
weight of  vehicles registered as  farm vehicles to no  more than                                                               
15,000 pounds.  At that  time the weight  limit was  increased to                                                               
16,000  pounds  to  acknowledge that  vehicles  in  general  were                                                               
getting  larger.  This same  rationale  is  the impetus  for  the                                                               
proposed increase in this legislation to a 20,000 pound limit.                                                                  
Mr.  Peterson reported  that  many owners  of  farm vehicles  are                                                               
encountering  situations in  which  new  or replacement  vehicles                                                               
would  exceed  the current  weight  limit.  One farmer  has  been                                                               
repairing  and  refurbishing old  vehicles  to  avoid the  higher                                                               
registration fees imposed on non-farm commercial vehicles.                                                                      
9:10:54 AM                                                                                                                    
Senator Dyson asked  the difference in the  licensure fee amounts                                                               
of farm vehicles and non-farm vehicles.                                                                                         
9:11:05 AM                                                                                                                    
Mr. Peterson replied  that the biannual license  fee for vehicles                                                               
registered as farm vehicles is $68.                                                                                             
9:11:27 AM                                                                                                                    
DUANE BANNOCK,  Director, Division of Motor  Vehicles, Department                                                               
of Administration,  testified via  teleconference from  an offnet                                                               
location that  the Division  has no objection  to this  bill. The                                                               
State license fee for commercial  vehicles weighing 20,000 pounds                                                               
or  less is  $240 biannually.  Additional fees  are assessed  for                                                               
vehicles registered in some locations by local governments.                                                                     
Senator Dyson asked the term of the license.                                                                                    
9:12:29 AM                                                                                                                    
Mr. Bannock answered that the licenses are valid for two years.                                                                 
9:12:36 AM                                                                                                                    
Senator Thomas asked if the fees  were the same regardless of the                                                               
number of axles on the vehicle.                                                                                                 
9:12:47 AM                                                                                                                    
Mr. Bannock  responded that  the Division  does not  consider the                                                               
number  of  axles but  rather  the  weight  of a  vehicle.  State                                                               
statute  contains  no  provisions  pertaining to  the  number  of                                                               
9:13:13 AM                                                                                                                    
Co-Chair Stedman  pointed out  the zero  fiscal note  prepared by                                                               
the  Division  and asked  if  this  legislation would  incur  any                                                               
9:13:27 AM                                                                                                                    
Mr.  Bannock replied  that programming  changes would  be minimal                                                               
and  would   be  made   internally.  Inputting   of  registration                                                               
information  is done  manually whether  the amount  is 16,000  or                                                               
20,000  pounds. Revenue  amounts were  not adjusted  because only                                                               
approximately 600  vehicles are  currently registered  under this                                                               
provision  and less  than ten  percent  of that  number would  be                                                               
vehicles weighing between 16,000 and 20,000 pounds.                                                                             
9:14:17 AM                                                                                                                    
Senator  Olson understood  that this  bill would  have no  fiscal                                                               
impact to the  Division of Motor Vehicles; however,  he asked the                                                               
expense  to   other  departments.  He  gave   the  Department  of                                                               
Transportation and Public Facilities  as an example, asking about                                                               
higher   maintenance  costs   resulting  from   heavier  vehicles                                                               
traversing the roadways.                                                                                                        
9:14:53 AM                                                                                                                    
Mr. Bannock could not address this.                                                                                             
Senator Olson posed the question to the sponsor.                                                                                
9:14:59 AM                                                                                                                    
Mr. Peterson  conveyed that the Department  of Transportation and                                                               
Public Facilities had reviewed this  legislation and expressed no                                                               
objection to its passage as the fiscal impact would be minimal.                                                                 
9:15:36 AM                                                                                                                    
Senator Dyson asked if a farmer would testify.                                                                                  
9:15:43 AM                                                                                                                    
Co-Chair Stedman  ascertained that no other  parties were present                                                               
to testify either telephonically or in person.                                                                                  
9:15:56 AM                                                                                                                    
Senator Olson  asked the opinion  of those who would  be affected                                                               
by this bill.                                                                                                                   
9:16:06 AM                                                                                                                    
Mr.  Peterson   told  of  testimony   given  before   the  Senate                                                               
Transportation Committee by  the farmer who brought  the issue to                                                               
Senator Green's attention. This  farmer utilizes his farm vehicle                                                               
to travel  to Canada to  purchase hay for  use on his  ranch. The                                                               
Canadian government imposes  a fee of $600 per  trip for vehicles                                                               
not registered  as farm vehicles.  Farm vehicles are  assessed no                                                               
such fee. He  was currently traveling in Canada  for this purpose                                                               
and was therefore unavailable to testify at this time.                                                                          
Mr. Peterson  continued relaying  the testimony presented  to the                                                               
Senate   Transportation  Committee   from   another  farmer   who                                                               
continually  repairs older  vehicles that  are under  the current                                                               
16,000 pound weight  restriction. These vehicles do  not have the                                                               
updated safety improvements available on newer vehicles.                                                                        
9:17:24 AM                                                                                                                    
Senator  Dyson announced  that  although  the difference  between                                                               
farm  vehicle and  commercial  vehicle license  fees  is $85  per                                                               
year,  he   would  support  this   legislation  because   of  the                                                               
aforementioned  $600   fee,  an  amount  he   deemed  potentially                                                               
9:17:56 AM                                                                                                                    
Senator  Huggins  offered  a  motion  to  report  the  bill,  25-                                                               
LS0755\C,  from  Committee  with individual  recommendations  and                                                               
accompanying fiscal note.                                                                                                       
There was  no objection  and SB 130  was REPORTED  from Committee                                                               
with zero fiscal note #1 from the Department of Administration.                                                                 
AT EASE 9:18:30 AM / 9:22:11 AM                                                                                             
9:22:14 AM                                                                                                                    
     SENATE BILL NO. 4                                                                                                          
     "An Act extending the cash assistance benefit program for                                                                  
     seniors under the senior care program and increasing the                                                                   
     benefit amount; and providing for an effective date."                                                                      
This was  the first hearing for  this bill in the  Senate Finance                                                               
9:22:23 AM                                                                                                                    
Co-Chair Stedman announced  that this bill would  not be reported                                                               
from the  Committee at this  hearing. The sponsor would  be given                                                               
an  opportunity to  present the  bill.  The fiscal  note must  be                                                               
addressed and  the cost benefit  analysis must be  reviewed. This                                                               
legislation represents a substantial  policy issue in addition to                                                               
a fiscal matter.                                                                                                                
9:23:23 AM                                                                                                                    
Senator  Olson,  sponsor  of  the bill,  testified  that  he  had                                                               
prefiled this  before the start  of the  Twenty-Fifth Legislature                                                               
to  accompany  another bill  pertaining  to  the Longevity  Bonus                                                               
Program,  which   he  also  sponsored.  He   had  withdrawn  that                                                               
legislation  once  Governor  Sarah  Palin  introduced  a  similar                                                               
Senator Olson  stated that the  legislation before  the Committee                                                               
is  intended to  assist  senior citizens  with  high heating  and                                                               
utility costs and  other expenses related to  maintaining a home.                                                               
He  collaborated with  Representative Mike  Hawker to  coordinate                                                               
this  bill   with  the  efforts  of   similar  legislation  under                                                               
consideration by the House of Representatives.                                                                                  
9:24:43 AM                                                                                                                    
Senator Olson offered a motion to  adopt CS SB 4, 25-LS0056\C, as                                                               
a working document.                                                                                                             
Without  objection the  committee  substitute,  Version "C",  was                                                               
ADOPTED as a working document.                                                                                                  
9:25:24 AM                                                                                                                    
GINNY  AUSTERMAN,  Staff  to  Senator  Olson,  read  the  sponsor                                                               
statement into the record as follows.                                                                                           
     SB 4 extends the Senior Care Program which provides                                                                        
     financial assistance to Alaska's low income seniors.                                                                       
     SB  4 does  three  things  to the  Senior  Care Program.  It                                                               
     extends the program's sunset date  to June 30, 2011; removes                                                               
     the underutilized  prescription drug benefit;  and increases                                                               
     the monthly  cash benefit based  on their income  related to                                                               
     the federal  poverty level  guidelines adjusted  for Alaska.                                                               
     Monthly payments are:                                                                                                      
        · $175 per month if the individual's household income                                                                   
          does not exceed 100 percent of the federal poverty                                                                    
          guidelines for Alaska                                                                                                 
        · $150 per month if the individual's household income                                                                   
          does not exceed 135 but is above 100 percent of the                                                                   
          federal poverty guidelines for Alaska                                                                                 
        · $100 per month if the individual's household income                                                                   
          does not exceed 150 but is above 135 percent of the                                                                   
          poverty guidelines for Alaska                                                                                         
     The Senior Care  Program is strictly a  needs based program.                                                               
     No Asset Test will be in place.                                                                                            
     SB 4 covers  eligible seniors who may have been  part of the                                                               
     Longevity  Bonus   Program  prior   to  its   funding  being                                                               
     eliminated, as well as individuals  who meet the eligibility                                                               
     criteria.  The  Department  of Health  and  Social  Services                                                               
     estimates  that the  Senior  Care  Program currently  serves                                                               
     approximately 7,000  seniors with financial  assistance. The                                                               
     Department  estimates  an   additional  1,800  seniors  will                                                               
     qualify for Senior Care under  SB 4. The Senior Care Program                                                               
     would  run   concurrently,  but  not  in   addition  to  any                                                               
     Longevity  Bonus   Program  that  may  be   redeveloped.  An                                                               
     individual  who is  receiving a  Longevity Bonus  payment is                                                               
     not eligible for the benefits of the Senior Care Program.                                                                  
9:27:31 AM                                                                                                                    
Senator Olson  summarized that this  bill would extend  the lapse                                                               
date  of the  Senior Care  Program to  2011, would  establish the                                                               
Program  as  needs-based  with no  asset  test  requirement,  and                                                               
provide benefits in  amounts ranging from $100 to  $175 per month                                                               
depending on the recipient's income  in comparison to the federal                                                               
poverty level  guidelines. Additionally, if the  Alaska Longevity                                                               
Bonus Program  was reinstated, recipients  of that  benefit would                                                               
not be eligible to receive Senior Care Program benefits.                                                                        
9:28:18 AM                                                                                                                    
Senator Elton asked for a  comparison of the committee substitute                                                               
to the original version of the bill.                                                                                            
9:28:51 AM                                                                                                                    
Senator Olson spoke of several  differences. The original version                                                               
contained no lapse or "sunset"  provision. This would ensure that                                                               
in the event  of unanticipated occurrences, the  Program could be                                                               
reviewed and  changed or eliminated  if necessary.  The committee                                                               
substitute  also  provides  for   graduated  payment  amounts  in                                                               
correlation to  the amounts under  consideration by the  House of                                                               
Representatives  in similar  legislation. Additionally,  no asset                                                               
test  is required  to  allow those  seniors  with investments  to                                                               
retain those funds for purposes such as future funeral costs.                                                                   
9:30:11 AM                                                                                                                    
Ms. Austerman added that the  original version of this bill would                                                               
have  continued the  current practice  of  utilizing the  federal                                                               
policy  level   figures  established  for  2005.   The  committee                                                               
substitute contains no such "freeze".                                                                                           
9:30:44 AM                                                                                                                    
Senator  Huggins   asked  the  federal  poverty   income  amounts                                                               
utilized for this legislation.                                                                                                  
9:31:00 AM                                                                                                                    
Ms.  Austerman  deferred  the Department  of  Health  and  Social                                                               
9:31:05 AM                                                                                                                    
Co-Chair  Stedman  cited analysis  language  in  the fiscal  note                                                               
listing  the federal  poverty level  in  2005 as  $16,133 for  an                                                               
individual and $21,641 for a two-person household.                                                                              
9:31:21 AM                                                                                                                    
Senator Huggins asked  if this figure represented  100 percent of                                                               
the federal poverty level.                                                                                                      
Co-Chair Stedman answered it did.                                                                                               
9:31:37 AM                                                                                                                    
KARLEEN JACKSON,  Commissioner, Department  of Health  and Social                                                               
Services, offered the Department's assistance.                                                                                  
9:31:58 AM                                                                                                                    
Co-Chair Stedman asked the federal poverty guidelines.                                                                          
9:32:07 AM                                                                                                                    
JANET  CLARKE,  Assistant  Commissioner, Finance  and  Management                                                               
Services, Department  of Health  and Social Services,  listed the                                                               
2007  federal  poverty annual  income  levels  as $12,770  for  a                                                               
single person household and $17,120 for a two income household.                                                                 
9:33:20 AM                                                                                                                    
Senator Huggins  supported this legislation,  as the  Senior Care                                                               
Program "serves a useful purpose".  However, many senior citizens                                                               
do  not  want  to  be  characterized as  "needy".  He  asked  the                                                               
Department's opinion on this.                                                                                                   
9:33:50 AM                                                                                                                    
Commissioner Jackson  agreed that  some senior citizens  and some                                                               
Alaskans  in  general,  share   this  sentiment.  However,  other                                                               
federally  administered benefit  programs are  also needs  based.                                                               
Like those programs,  the Senior Care Program is  needs based and                                                               
participation is optional.                                                                                                      
9:34:27 AM                                                                                                                    
Senator Huggins  assumed that  information about  participants is                                                               
not public.                                                                                                                     
9:34:41 AM                                                                                                                    
Ms. Clarke  replied that although information  on participants in                                                               
the  Alaska Longevity  Bonus  Program was  deemed  to be  public,                                                               
information pertaining to  participants of federally administered                                                               
needs-based   programs   is   subject    to   some   measure   of                                                               
confidentiality. The  Senior Care  Program is  State administered                                                               
and   she  was   therefore  uncertain   of  the   confidentiality                                                               
requirements for its information.                                                                                               
9:35:37 AM                                                                                                                    
ELLIE  FITZJARRALD,  Director,  Division  of  Public  Assistance,                                                               
Department  of   Health  and  Social  Services,   testified  that                                                               
information  regarding  individual participants  is  confidential                                                               
for State  administered needs-based  programs such as  the Senior                                                               
Care   Program.  Data   listing   the   number  of   participants                                                               
categorized  by  community that  does  not  contain any  personal                                                               
identifiers is not confidential.                                                                                                
9:36:18 AM                                                                                                                    
Senator Elton asked  the estimated number of  participants in the                                                               
Senior  Care  Program  who would  otherwise  participate  in  the                                                               
Alaska Longevity  Bonus Program in  the event it  was reinstated,                                                               
although  at  less  than  the  maximum  benefit  amount  of  $250                                                               
provided for in the Bonus program.                                                                                              
9:36:57 AM                                                                                                                    
Ms. Clarke replied that the  Department had conducted an analysis                                                               
to the  original version  of this bill.  An updated  analysis had                                                               
not  been prepared  for the  committee substitute.  She predicted                                                               
that a participant eligible to  receive a Longevity Bonus payment                                                               
of  $150 for  example,  would  not chose  to  participate in  the                                                               
Senior Care Program if the benefit  would be reduced to $100. She                                                               
offered to prepare a scenario.                                                                                                  
9:37:51 AM                                                                                                                    
Senator  Olson  asked if  the  Department  was prepared  to  make                                                               
preliminary comments on the revised  fiscal note just distributed                                                               
to Members.                                                                                                                     
9:38:07 AM                                                                                                                    
Co-Chair Stedman  directed the explanation to  also reference the                                                               
original fiscal note.                                                                                                           
9:38:16 AM                                                                                                                    
Ms.  Clarke explained  that the  original  fiscal note  contained                                                               
negative cost estimates  because it assumed the  extension of the                                                               
Senior  Care Program  and reinstatement  of the  Alaska Longevity                                                               
Bonus Program. This caused some  confusion and also the situation                                                               
had  changed. Therefore  a new  fiscal note  was prepared  to the                                                               
original  version  of  the  bill  to  demonstrate  the  estimated                                                               
expense of only  the Senior Care Program.  However, the estimates                                                               
were calculated  utilizing assumptions that had  been changed and                                                               
as a  result the new fiscal  note was not valid  to the committee                                                               
9:39:38 AM                                                                                                                    
Co-Chair  Stedman  indicated  the   Committee  would  receive  an                                                               
updated fiscal note.                                                                                                            
9:39:55 AM                                                                                                                    
Ms.  Clarke  pointed  out  that the  Department  had  provided  a                                                               
spreadsheet  containing  preliminary information,  including  the                                                               
benefit costs and the administrative  expenses. The total cost to                                                               
implement  the provisions  of the  committee substitute  would be                                                               
$17,398,900, an  amount over $4  million higher than the  cost to                                                               
implement the original version of the bill.                                                                                     
9:40:27 AM                                                                                                                    
Senator Dyson,  referring to  the last  paragraph of  the sponsor                                                               
statement commenting  on the correlation between  the Senior Care                                                               
Program  and  the  Longevity  Bonus  Program,  surmised  that  an                                                               
otherwise eligible  senior citizen could not  participate in both                                                               
programs concurrently.                                                                                                          
9:40:58 AM                                                                                                                    
Senator Olson deferred to Ms. Austerman.                                                                                        
9:41:28 AM                                                                                                                    
Ms. Austerman affirmed Senator Dyson's assumption.                                                                              
9:41:39 AM                                                                                                                    
Co-Chair Stedman reminded  the Committee that no  action would be                                                               
taken  on this  legislation during  this hearing.  He established                                                               
that no additional testimony was forthcoming.                                                                                   
9:42:18 AM                                                                                                                    
Ms.  Austerman reported  that the  Alaska chapter  of AARP  is in                                                               
support of this bill.                                                                                                           
9:42:29 AM                                                                                                                    
Senator Dyson  disclosed his efforts  of the past three  years to                                                               
implement  a process  to  develop a  long-range  fiscal plan  for                                                               
operating  and  capital expenditures.  Until  such  a system  was                                                               
established, he  would be reluctant  to support  legislation such                                                               
as the  bill before  the Committee.  Caution should  be exercised                                                               
when   considering  "institutionalizing"   a  program   into  the                                                               
operating budget.                                                                                                               
9:43:31 AM                                                                                                                    
Senator  Elton  remarked  that  the  Executive  Branch  has  been                                                               
skillful  in estimating  expenses for  the first  years following                                                               
enactment  of  legislation.  However   projected  benefits  of  a                                                               
program  are not  reported.  Elders, in  retirement  and with  no                                                               
further  employment  connection  to Alaska,  economically  impact                                                               
local businesses and service providers  when they move out of the                                                               
state. Those who leave are  spending their retirement investments                                                               
and  health care  funds elsewhere.  The  economic consequence  of                                                               
encouraging seniors to move away must be understood.                                                                            
9:45:45 AM                                                                                                                    
Co-Chair  Stedman  contributed  that operating  budget  increases                                                               
were problematic.  Costs must be contained  and although reducing                                                               
spending to amounts less than that  of the previous year would be                                                               
difficult  to  accomplish,  efforts   are  necessary  to  address                                                               
formula-driven programs to  avoid a "runaway train".  He had been                                                               
collaborating with Senator  Olson to ensure that  the Senior Care                                                               
Program would  have a minimal  fiscal impact in balance  with the                                                               
"social issues that we're faced with our seniors."                                                                              
9:47:34 AM                                                                                                                    
Senator Dyson expected this effort  from the Co-Chair, as Senator                                                               
Stedman  understood  the fiscal  issues  more  than others.  Most                                                               
legislators  are sympathetic  to  the needs  of seniors.  Senator                                                               
Dyson  warned that  in three  to five  years, the  State's fiscal                                                               
condition could  be "if  not desperate,  at least  difficult" and                                                               
that either "draconian cuts" to  this and other programs would be                                                               
necessary,  or that  State taxes  would  be levied.  A sales  tax                                                               
would  have a  disproportionate impact  on those  "living on  the                                                               
margin" and  an income tax  would have a  disproportionate impact                                                               
on  those who  are employed  and  whom should  be encouraged  and                                                               
retained as residents.                                                                                                          
Senator Dyson remarked that failing  to consider the future would                                                               
be "irresponsible". The FY 08  operating budget would be at least                                                               
$600  million higher  than the  previous  year's budget,  despite                                                               
efforts of  Governor Palin. The Legislature  has a responsibility                                                               
to address not just individual  needs but the total future impact                                                               
as well.                                                                                                                        
9:50:01 AM                                                                                                                    
Senator  Olson  appreciated  the views  expressed.  He  cautioned                                                               
however that someday, Members could  be in a similar situation to                                                               
those this  program intends  to assist. His  concern was  less on                                                               
the  issue of  supporting the  local  economy and  more on  those                                                               
elders barely  able to  financially maintain  their independence.                                                               
Seniors want  to remain in their  homes for as long  as possible.                                                               
The  cost of  institutionalization is  significantly higher  than                                                               
the cost of the Senior Care Program.                                                                                            
9:51:29 AM                                                                                                                    
Co-Chair Stedman ordered the bill HELD in Committee.                                                                            
AT EASE 9:52:42 AM                                                                                                            
Co-Chair Bert Stedman adjourned the meeting at 9:52:46 AM                                                                     

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