Legislature(1993 - 1994)
03/26/1993 01:55 PM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
March 26, 1993
1:55 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator Rick Halford, Vice-Chairman
Senator Dave Donley
Senator Suzanne Little
MEMBERS ABSENT
Senator George Jacko
OTHERS PRESENT
Senator Randy Phillips
COMMITTEE CALENDAR
SENATE BILL NO. 58
"An Act relating to the longevity bonus program."
SENATE BILL NO. 51
"An Act providing for establishment of work camps for
juveniles adjudicated delinquent, and extending to all
cities and to nonprofit corporations authority to maintain
facilities for juveniles."
CS FOR SENATE BILL NO. 44(L&C)
"An Act relating to civil liability for skiing accidents,
operation of ski areas, and duties of ski area operators and
skiers; and providing for an effective date."
SCHEDULED BUT NOT HEARD THIS DAY.
PREVIOUS SENATE COMMITTEE ACTION
SB 58 - See HESS minutes dated 2/19/93.
SB 51 - See HESS minutes dated 2/24/93 and 3/5/93.
SB 44 - See Labor and Commerce minutes dated 1/19/93,
1/21/93, and 1/26/93. See Judiciary minutes dated
3/5/93 and 3/17/93.
WITNESS REGISTER
John Shaffer
SLC/AARP
303 Kimsham
Sitka, Alaska 99835
POSITION STATEMENT: Opposed SB 58.
Robert Kallenberg
SLC/AARP
Box 67307
Chugiak, Alaska 99567
POSITION STATEMENT: Opposed SB 58.
Joe McGill
Senior Center
Box 322
Dillingham, Alaska 99576
POSITION STATEMENT: Opposed SB 58.
Rupert Andrews
AARP/CCTF
9416 Long Run Drive
Juneau, Alaska 99801
POSITION STATEMENT: Opposed SB 58.
Nancy Bear-Usera, Commissioner
Department of Administration
P.O. Box 110200
Juneau, Alaska 99811-0200
POSITION STATEMENT: Supported SB 58.
Evelyn Mortimer
Senior Citizen
910 Willow
Kodiak, Alaska 99615
POSITION STATEMENT: Opposed SB 58.
Millie Terwilliger
P.O. Box 206
Tok, Alaska 99780
POSITION STATEMENT: Opposed SB 58.
Jerry McCutcheon
121 West 11th Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Opposed SB 58.
Alice Oates
P.O. Box 488
Tok, Alaska 99780
POSITION STATEMENT: Opposed SB 58.
Rose Palmquist
P.O. Box 370294
Wasilla, Alaska 99687
POSITION STATEMENT: Opposed SB 58.
Patricia O'Brien
Health & Social Services
P.O. Box 110630
Juneau, Alaska 99811-0630
POSITION STATEMENT: Supports SB 51.
Sherrie Goll
Alaska Women's Lobby
KIDPAC
P.O. Box 22156
Juneau, Alaska 99802
POSITION STATEMENT: Opposed SB 51.
ACTION NARRATIVE
TAPE 93-32, SIDE A
Number 001
Chairman Robin Taylor called the Judiciary Committee meeting
to order at 1:55 p.m.
SENATOR TAYLOR gave a eulogy, and asked for remembrance, for
a former Speaker of the House and friend from his district,
WILLIAM K. BOARDMAN.
SENATOR TAYLOR introduced SB 58 (PHASE OUT LONGEVITY BONUS)
introduced by request of the Governor. He announced there
would be testimony taken from teleconference sites in Sitka,
Dillingham, Kodiak, Tok, Anchorage, and MatSu.
Number 061
JOHN SHAFFER testified both for the American Association of
Retired Persons and from his experience living in Alaska for
thirty one years. He praised the policies put in place to
improve the quality of life for the senior citizens of
Alaska, but he expressed his concern for the change in those
policies. In order to access the impact of the change in
policy which would discourage senior citizens from staying
in the state, he requested hearings not just on the budget,
but the impact on the quality of life.
MR. SHAFFER used the term, elder business, to identify the
economic benefits from the present policies, and he reviewed
the support for the proposed annuity program to benefit
people in the future. He described communities where the
senior citizens were not only an economic benefit, but
through their volunteer work, they were an asset to their
community.
SENATOR TAYLOR returned the testimony to Juneau to call on
his friend, ROBERT KALLENBERG.
Number 108
MR. KALLENBERG, born May 26, 1903, arrived in Dillingham in
August, 1926, and now resides in Chugiak. He reviewed the
changes during the 66 years he has been in Alaska, such as
the delivery of mail nine times a year when he first
arrived, as compared to daily delivery now.
MR. KALLENBERG described making his living fishing a sail
boat in Bristol Bay, but watching his retired friends leave
Alaska because their retirement compensation would not meet
the cost of living in Alaska. he quoted MR. SHAFFER'S
testimony to explain the policies that permit retired people
to remain in the state, but he claimed the legislation being
considered eroded that policy.
MR. KALLENBERG explained he was in this controversy because
he served on the special committee to solve the problem of
the longevity bonus. He gave some background information
from committee meetings in 1983 and 1984 when they realized,
before the year 2000, funding the longevity bonus would be a
problem.
After a year of study, MR. KALLENBERG said the committee
brought recommendations to the governor and the legislature
that embodied the basic concepts of the annuity approach to
solving the problem. He explained he had considered all of
the solutions that have been offered in the mean time, and
he was well aware of the bill being considered today, SB 58.
He continued to explain why he thought the annuity approach
was the best answer that has been offered to the problem and
why the present legislation is short sighted.
MR. KALLENBERG urged the committee to be concerned with the
age group from 50 to 65 years of age, who will be deciding
whether or not they are going to retire in Alaska. He has
talked to many who are going to leave the state when they
quit earning money and take their money with them, which
will be a considerable amount. He referred to the
statistics, calling it a mail box industry, and said it was
close to $600 million a year. He asked the committee to
consider his testimony and thanked them for listening to
him.
Number 200
JOE MCGILL from Dillingham, said he was co-sponsor for an
earlier bill for $200 a month, and presently representing
the Dillingham Senior Center with 138 members, all of whom
are not in favor of SB 58. He reviewed the involvement of
those 65 years and older in the community, and he gave
himself as an example of someone heavily committed to local
government and to fishing organizations. He also got
married at 65 because he could afford to do so.
MR. MCGILL took on the argument of many seniors coming to
Alaska for the longevity bonus, and he explained these
people also brought other retirement money such as social
security or other income. He thought it would be less
expensive to give the seniors $250 so they can take care of
themselves, and he described those people who came here
after World War 1, lived off the land, and didn't have much
retirement.
RUPE ANDREWS, representing the Capital City Task Force for
the AARP, said some of his comments had already been made,
but he wanted to let people know the Governor was convening
a meeting with people representing organizations or agencies
dealing with senior citizens in the state. He said the
governor was aware the bill would eliminate a standing
policy of some 20 years which has created economic stability
for seniors, allowing them to remain in their own homes, and
to make the choice to remain in Alaska. He hoped, out of
the meeting, would come some policy that would replace the
policy changed by SB 58. He suggested postponing a final
decision on the bill until the results of the meeting
becomes available.
Number 279
SENATOR TAYLOR introduced the Commissioner of
Administration, COMMISSIONER NANCY USERA, to testify, after
which he would be returning to the teleconference network.
COMMISSIONER USERA reviewed the provisions of the bill:
a. Grandfathers in all recipients currently on the
program.
b. Provide a three year stepped down phase out at the
rate of $200, $150, and $100 per month for life.
COMMISSIONER USERA indicated interest at the comments with
regard to the public policy represented by the longevity
bonus, and she remembered listening to previous crisis
budget meetings, where doing away with the longevity bonus
was discussed. She reviewed the fiscal problems at that
time with the drop in oil prices and the suggestions
presented at the committee meetings was always to cut the
longevity bonus. She described these as a crisis management
approach.
COMMISSIONER USERA talked about the original design of the
longevity bonus, which was declared unconstitutional in
1982. Consequently, she said each year there is a financial
crisis, this program becomes vulnerable, and she quoted
concerns from the governor that the current recipients would
be affected by some sort of a last minute crisis management
approach to balancing the state's budget.
COMMISSIONER USERA reviewed a variety of proposals to deal
with the program for the past seven years, but there has not
been the collective will to fix it. She agreed with the
governor this would provide a window of opportunity for the
next three or four years to pay for the bonus and to provide
a reasonable transition for the people receiving the bonus.
COMMISSIONER USERA explained the fatal flaws in the annuity
program. First, if it was an incredibly successful program,
it would remove from the local economy a significant portion
of the permanent fund dividends, that are currently being
circulated. She explained how the removal of the dividends
would impact the businesses in the communities.
Number 333
COMMISSIONER USERA described what would become a government
banking bureaucracy invested similar to the permanent fund
in a mix of equities and bonds outside the State of Alaska.
It would only served a small number of people who could
afford to invest their permanent fund dividends into the
programs, and the state could become liable for taking care
of long term annuity accounts for a few people, who might
retire to Florida, for about 40 years. She suggested people
do their own investing in monetary institutions such as
I.R.A's, annuity programs, and investment houses.
COMMISSIONER USERA agreed with the seniors that testified on
the success for the longevity bonus, but she didn't think it
was a sustainable program. She explained she had solicited
solutions from the senior groups for two years, but she had
not found an adequate solution that meets all of the
considerations.
SENATOR TAYLOR opened the discussion to the committee
members.
SENATOR LITTLE expressed her concern as to whether SB 58 was
constitutional and defensible. She reviewed the provisions
of the three year phase out.
COMMISSIONER USERA referred to an opinion from the Attorney
General's office, JOHN GAGUINE, and she summarized the
constitutional provisions from MR. GAGUINE, which she felt
protected the legislation. She explained how the program
could end in a positive fashion, while meeting the public
good, the public purpose, and the legislative intent.
SENATOR LITTLE and COMMISSIONER USERA discussed the original
intent of the longevity bonus, which was to be a self-ending
program.
Number 389
SENATOR HALFORD was concerned the legislature had created a
program that tells a life-long Alaskan that after 1997 they
get nothing, but someone close to 65, who moves here from
another state close to the cut-off date, can get money from
the state treasury. He said the original purpose of the
legislation was to address those inequities, and he thought
the inequity is easy to see.
COMMISSIONER USERA shared SENATOR HALFORD'S frustration at a
program originally designed for life-long Alaskans, who had
lived here. She said, had the annuity program been adopted
in 1986, the annuity would have been in place for seven
years and probably be successful. She said the
administration was still amenable to alternative suggestions
on the phase-out approach, but she reminded committee
members there were still a large number of persons who would
qualify under the original criteria. She said there was no
constitutional way to deliver a program specifically for
those people.
SENATOR HALFORD asked permission from the chair to discuss
the annuity as an alternative to the bill, and he referred
to the annuity bill. He gave a scenario where each annuity
share, in the 60 to 65 age, was matched by a state
contribution to the permanent fund dividend, thus making the
annuity steps twice as big. Under this scenario, the
longevity bonus would be phased out in 7 years, and there
would be a substantial cost saving due to the small number
of participants.
Number 439
COMMISSIONER USERA clarified the notion the annuity would
replace the longevity bonus as much as it is a trade-off for
the permanent fund dividends. She continued to describe the
annuity in which a person would invest 100% of their
permanent fund for at least fifteen years. She reiterated
her offer to assist with any alternate idea that was
proposed, but she expressed concerns with the annuity bill
introduced this session.
Number 488
SENATOR TAYLOR explained there were suggestions made on how
to solve the entire problem up front through the refunding
of income taxes for those long-term tax payers from
territorial days, and he gave some legislative history on
this possible solution. He also explained it wouldn't have
paid a permanent dividend check to people on welfare during
that time, but he blamed the administration at the time for
using the program to build a constituency.
SENATOR TAYLOR said the records for those original tax-
payers was still available, so the state could create that
fund, pay the people who were here before statehood and had
paid taxes until 1978. He voiced objections to paying the
newly arrived seniors for the programs that are currently
available to them, although he didn't argue with MILLIE
TERWILLIGER that seniors generate a large chunk of money.
He wanted COMMISSIONER USERA to know there were people who
felt differently about the longevity bonus.
SENATOR TAYLOR returned to the teleconference sites to hear
from EVELYN MORTIMER from Kodiak.
MS. MORTIMER identified herself as the president of the
Senior Center Board representing about 180 seniors, who feel
that SB 58 is fair in that it does not put the current
recipients in jeopardy. She said they had not discussed the
annuity, nor any of the details referenced in the meeting.
SENATOR DONLEY, testifying from the LIO in Anchorage, said
he had listened to the testimony from around the state and
did not support the legislation. (SENATOR DONLEY was not
able to vote on HB 58 from of Anchorage.)
Number 537
SENATOR TAYLOR next moved to Tok to hear from MS.
TERWILLIGER.
MS. TERWILLIGER testified in support of SB 6 (ANNUITY
PROGRAM AMENDMENTS) because it had been supported by the
voters in the State of Alaska, and she reviewed the
provisions of the bill. She described the Alaska tradition
of taking care of the old timers, and she discussed her
belief in an old timers pension. She explained how the
longevity bonus had allowed old-timers to live in their
homes longer instead of going to the pioneer homes, and she
gave some statistics on the amount that would have been
spent on the current seniors moving into the pioneer home.
Number 555
JERRY MCCUTCHEON from Anchorage testified in agreement with
the solution outlined by SENATOR TAYLOR to refund the income
tax to those who earned it before 1978. He thought the
state could still divide up a collected amount among those
who are still here from that era. He thought that would
answer the claims of the military and the new comers.
MS. ALICE OATES from Tok testified in support of the
longevity bonus and thought there should be a tobacco tax to
support the bonus.
SENATOR TAYLOR next called on ROSE PALMQUIST from the MatSu
Valley to testify.
MS. PALMQUIST said she was going to testify in reference to
previous testimony, with which she agreed. She gave some
background information on the longevity bonus in relation to
the economy of the state, which she though was a positive
impact.
TAPE 93-32, SIDE B
Number 001
MS. PALMQUIST listed all of the programs or pensions
received by seniors, and she said the state received more
money from seniors that from tourism. She addressed the
demographic mix which has given the state a balance of youth
and elderly, and she agreed with the testimony from MS.
TERWILLIGER on the annuity plan.
MS. PALMQUIST referred to testimony on the reason for the
longevity bonus, which was to encourage people to remain in
the state, and she continued her support for the proposals
of the annuity plan. She claimed the legislature had not
supported it adequately to put it across, and she claimed
the state could afford the annuity plan. She quoted recent
surveys done with the help of the Republican Party in which
the money could be salvaged from oil field operations in the
amount of $2.5 million.
MS. PALMQUIST expressed dismay that anyone in the government
would commit another legislature to keep the promises of the
present one, and she thought it was a shame and a crime to
tell the current recipients they were grandfathered into the
program.
MS. PALMQUIST expressed interest in SENATOR HALFORD'S
remarks, which she considered sensible proposals, and she
suggested using the BP settlement money to carry out his
proposals.
SENATOR TAYLOR noted that ROBERT BERRYHILL from Juneau was
in attendance to listen only.
Number 064
SENATOR TAYLOR explained he was one of the original co-
sponsors along with SENATOR BILL RAY, of the only annuity
bill that was passed and vetoed by GOVERNOR STEVE COWPER.
SENATOR TAYLOR said he still strongly believed in the
concept of that annuity bill and would like to see it work,
but he doubted there was presently any support for the
concept.
SENATOR DONLEY spoke from Anchorage in agreement with
SENATOR TAYLOR on his support for the original annuity plan
since the people voted in favor of it in 1986. He thought
it could be saving the state money now.
(Since there was not a quorum, no additional action was
taken on the bill.)
SENATOR TAYLOR introduced SB 51 (WORK CAMPS FOR JUVENILE
OFFENDERS) and invited the sponsor, SENATOR RANDY PHILLIPS,
to testify.
Number 091
SENATOR PHILLIPS explained it was similar to legislation
introduced by SENATOR VIRGINIA COLLINS in the last session.
He explained the concept of a "work camp," which would be a
residential facility set aside for use only by minors.
These residents might be required to work on buildings and
grounds, or perform other activities including education.
SENATOR PHILLIPS explained his bill, SB 51, would authorize
the Department of Health and Social Services to establish
regulations for the operation of work camps and to place
delinquent minors into work camps instead of another type of
detention facility.
SENATOR PHILLIPS said, further, the legislation provides
that a municipal or non-profit corporation may maintain and
operate a juvenile work camp under regulations to be adopted
by the DHSS. He suggested that PAT O'BRIEN from DHSS
testify on the legislation.
MS. O'BRIEN testified in support of the bill, because she
said it would give them an additional alternative type of
program in which to place juveniles, who are adjudicated
delinquent.
SENATOR TAYLOR asked if it was similar to the programs known
as the Outward Bound program.
MS. O'BRIEN said it was a possible, and she described
programs presently in existence in the State of Alaska
today, as a component of residential child care facilities.
She thought one of the main emphasis of the bill was the
ability to have the juvenile work, to learn about the world
of work ethic, perhaps, on a farm.
SENATOR TAYLOR opened the meeting to testimony and invited
SHERRIE GOLL, representing the Alaska Women's Lobby and
KIDPAC, to speak.
Number 147
MS. GOLL expressed the concerns of her clients that the
work camp service was presently offered through the child
care programs, which her clients feel are adequate. She
didn't think the legislation was clear as to whether
juveniles would be sent to the work camps from institutions
such as the McLaughlin Youth Center or from less
restrictive settings such as residential facilities.
MS. GOLL discussed possible duplication of efforts in this
effort, but she did support the Governor's bill for boot
camps for first time offenders between the ages of 18 and
26.
MS. GOLL was concerned both programs were planning to use
the Pt. MacKenzie farm, but she felt it should only be just
as an experimental farm to lessen the prison population.
MS. GOLL discussed with SENATOR TAYLOR possible amendments
to the bill to limit it to first time juvenile offenders for
drug treatment and education. She reiterated their support
for first time offenders but not for juveniles younger than
18.
There being no further business to come before the
committee, the meeting was adjourned at 2:25 p.m.
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