Legislature(1995 - 1996)

1996-01-12 House Journal

Full Journal pdf

1996-01-12                     House Journal                      Page 2434
HB 417                                                                       
HOUSE BILL NO. 417 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
An Act relating to eligibility for the longevity bonus; and                   
providing for an effective date.                                               
was read the first time and referred to the State Affairs, Health,             
Education & Social Services, Judiciary and Finance Committees.                 

1996-01-12                     House Journal                      Page 2435
HB 417                                                                       
The following fiscal notes apply:                                              
Fiscal note, Dept. of Administration, 1/12/96                                  
Fiscal note, Dept. of Health & Social Services, 1/12/96                        
Zero fiscal note, Dept. of Health & Social Services, 1/12/96                   
The Governors transmittal letter, dated January 12, 1996, appears              
Dear Speaker Phillips:                                                         
Under the authority of art. III, sec. 18 of the Alaska Constitution, I am      
transmitting a bill that makes Alaska senior citizens with high incomes        
ineligible to receive the longevity bonus.  The bill also disqualifies         
longevity bonus recipients who are absent from the state, for reasons          
within their control, for 180 days or more within any one-year period.         
I believe that these changes in the program are necessary as a cost            
containment measure as we look for ways to reduce state spending and           
to address our budget gap.                                                     
The income maximum portion of this bill would disqualify a senior              
citizen from receiving the bonus if his or her gross income exceeds            
$60,000 a year.  A married couple would be disqualified if the spouses         
combined gross income exceeds $80,000 a year.                                  
Although the 1993 amendments to the bonus statutes, which closed the           
program to people not applying by the end of this year, will eventually        
lead to reduced costs for the longevity bonus, the short-term savings          
have been relatively small, as expected.  We estimate that enacting the        
income maximum for eligibility could reduce the cost of the program            
by about eight percent, or about $6 million annually.                          
I am aware that many seniors within the state oppose needs-basing              
the bonus program, somehow equating it to welfare.  This bill does not         
do that.  Approximately 92 percent of seniors currently on the                 
program, or more than 27,000 people, would see no change in their              
bonuses.  Setting income caps at a relatively high level does not limit        
the bonus to only those senior citizens who rely on it for the                 
necessities of life.  Instead, the high cap is intended to take the bonus      

1996-01-12                     House Journal                      Page 2436
HB 417                                                                       
away from only those recipients who should not be even minimally               
affected by the loss.                                                          
The bill looks only at income, and not assets, so that recipients with         
moderate incomes will continue to receive the bonus even if they own           
valuable but nonliquid assets, such as homestead property or a                 
residence that has greatly increased in value over the years.  The bill        
also provides that a recipient disqualified by reason of the income            
maximum is not permanently disqualified.  If his or her income drops,          
or circumstances change, the recipient can become eligible again.  This        
will protect recipients on fixed incomes who enjoy a one-time gain             
from the sale of a residence or some other asset.                              
Similarly, the bill contains a special provision for persons who become        
eligible for the longevity bonus by age and residency in 1996 and              
apply before January 1, 1997, but are disqualified because of the              
income maximum.  If those persons subsequently become eligible, they           
will be entitled to $100 a month payments.                                     
The second part of the bill is intended to address a specific problem:         
bonus recipients who spend little of the year in Alaska, but time their        
absences so that they are never out of Alaska for more than 90 days            
at a time.  The bill would disqualify recipients who are out of the state      
for 180 days or more in any one-year period, excluding absences                
beyond the recipients control.  This is in keeping with the original           
intent of the program to assist seniors who are truly residents of             
I urge your prompt consideration and passage of this bill.                     
						Tony Knowles