Legislature(2001 - 2002)
04/02/2001 01:41 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 162
An Act relating to absences from the state under the
longevity bonus program.
REPRESENTATIVE FRED DYSON advised that the House HESS
Committee had sponsored HB 162. He introduced
Representative Gretchen Guess, the co-sponsor.
Representative Dyson noted that the bill would change two
Longevity Bonus date clauses. It would increase the
allowable paid absence from 30 to 60 consecutive days and it
would extend the unpaid sabbatical from 90 consecutive days
to five years.
Representative Dyson commented that the Longevity Bonus is
extremely important to many of its recipients, especially
those who are low income. By extending the allowable paid
absence to 60 days and by extending the unpaid sabbatical to
five years, seniors would be able to leave the State without
a penalty.
Representative Davies asked what the public interest was in
not re-qualifying those seniors. He asked why there was a
need for a five-year limit. He suggested dropping the five-
year clause.
REPRESENTATIVE GRETCHEN GUESS replied that the five-year
clause was introduced as a mechanism to clean out the rolls
for those who are eligible. She claimed that eliminating
the five-year clause would make it more difficult for the
Department of Administration to determine who was eligible.
Representative Davies reiterated, "What difference would it
make to the State".
Representative Dyson explained that when people in the
program die, it helps the Department clear the rolls. He
added that he would not object to changing or removing the
date.
Representative Harris thought that the length extension
would allow more people to qualify for the program.
Representative Guess advised that the extension from 30 days
to 60 days would make a positive fiscal note, but that would
be off set with the extension of 90 days to 5 years.
Currently, there are participants leaving for 90 days, and
in order to keep their eligibility, they must return for a
month. Extending it from the 30 to 60 days does cost more
but the other change would create a negative "fix".
Representative Harris asked at this time, if a person left
the State for 90 days or more, would they then not qualify
for the Longevity Bonus. Representative Guess explained
that unless they came back to the State, they would no
longer qualify, however, they would have to be repaid for
the month that they returned.
ALISON ELGEE, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, explained the fiscal note. She stated that
the extension of the allowable absence from 30 days to 60
days was the period in which the eligible person would
continue to receive their check. The costs associated with
Section 1 would be $288,400 dollars. She added that Section
2 would save the State money, however, it would be difficult
to predict the amount. The Department estimated that if 10%
of the Longevity Bonus recipients were absent from the State
for an additional 30 days, the program would save $435,100
dollars. Those numbers indicate the potential savings.
Ms. Elgee addressed the "allowable absence" question voiced
by Representative Harris. Right now allowable absences are
up to 90 consecutive days, and then they must return for at
least ten days; or they can be gone for a total of 180 days
during the last twelve months. Medical treatment is an
allowable absence, however, the spouse is not allowed out
for the extended time period.
Co-Chair Mulder asked if the "piggy-back" provision had been
problematic. Ms. Elgee advised that the spouse does have to
return after 90 consecutive days. Co-Chair Mulder asked if
that would be corrected in the bill. Ms. Elgee explained
that it would.
Representative Foster asked the number of people in the
Longevity Program. Ms. Elgee replied that there are 22,000
recipients currently in the program and that it is
decreasing on an annual bases of about 6% to 7%.
Representative Davies questioned the State's interest in
Section 2. Ms. Elgee responded that it would provide the
Department an opportunity to purge out the rules. The
program is currently in a phase out, and the Department
would like to know when it has been completed. The
legislation would provide an opportunity to eliminate those
people that are no longer eligible. She acknowledged that
there is no "magic" to 5 years.
Representative Croft referenced Section 3, (A)(4). He asked
if there had been any cut off at all. Ms. Elgee explained
that it would be a policy call to determine how the program
should be handled. The Department is requesting a time
limit in order to determine the necessary records.
Co-Chair Williams asked how many employees would be kept on
staff to execute the program. Ms. Elgee replied that the
staff consists of three clerks who process the Longevity
Bonus checks each month. She added that they have
additional duties. The Department anticipates that as the
program diminishes, the staff will also decrease. The staff
currently maintains the wait lists for the Pioneer Homes.
Co-Chair Mulder asked how the Department determines if a
person has been out of the State for longer than 30 days.
Ms. Elgee replied that the checks are only sent to instate
addresses and if the checks are returned with an out of
State postmark, the payment of the check is suspended until
the Department can check these circumstances out. People
are asked to report their absences. If someone has a beyond
thirty day absence, they are requested to document that
leave. They are then reactivated when they return to
Alaska.
Co-Chair Mulder noted that the State does not spend a lot of
money to track these people. He believed that the
legislation would allow people to be "more" truthful,
however, voiced concern, that the legislation would be
subjecting the State to potential legal recourse for those
that have "life status". He asked if making the adjustment
could create a legal problem. Ms. Elgee did not know if
that would be a problem.
ROSALEE WALKER, BOARD MEMBER, OLDER ALASKANS AGING GROUP,
JUNEAU, testified in support of the legislation. She
related a personal experience with the illness of her mother
and how when she left the State to care for her elderly
mother, she nearly lost her Longevity Bonus. She commented
that changing the 60 days would make it easier for those
depending on the bonus to pay their bills. She stressed
that she could not financially manage without the bonus.
Ms. Walker acknowledged that problems do arise with the
current system.
Co-Chair Mulder requested that Mike Tibbles, Staff to
Representative Bill Williams, speak with Tamara Cook,
Legislative Legal, regarding a legal opinion to protect the
State with the changes that the legislation proposes.
Representative Dyson advised that if there is a problem, he
would recommend Speaker Porter to address these concerns on
the House Floor.
Representative Davies MOVED a conceptual amendment to Page
2, Section 2, changing that language to a delayed effective
date of 15 years.
Co-Chair Williams OBJECTED.
Co-Chair Mulder commented that dying disqualifies people,
however, he believed that for the Department's records, it
would be beneficial to have a sound date determination
policy. He suggested that people should have some certainty
in knowing what would be happing within five years and if
they would be returning to the State.
Representative Croft agreed with Co-Chair Mulder. He
commented on the legal defense. He maintained that the
State retains the ability to change the rules. He agreed
that changing the 30 to 60 days would be a rational amount
of time and would be a change that was justified. He
commented that the proposed change would complicate the
"simple" change.
Representative Davies disagreed. There are no new people
that can qualify for the program. The language addresses
those people that are presently qualified. He questioned
the public rational for having that language. In the
previous language, a person could re-qualify as many times
as they wanted. He did not believe that the change would
create a significant fiscal impact.
Representative Whitaker inquired the age of those included
in the program. Ms. Elgee recalled that the application was
closed on December 1996. At that time, each persons had to
be 65, and that now, the population is now 70 plus years.
Representative Whitaker noted that within fifteen years, the
program would be nearly over.
Vice-Chair Bunde commented that the bonus was initially
provided in order to help these older people to continue to
live in the State. Representative Davies argued that there
are legitimate reasons for living outside the State for more
than five years. He noted that there are people that leave,
and are not being paid the bonus while they are gone. He
proposed that if one of those folks decides to come back,
what would be the State's interest in saying "no".
Ms. Elgee advised that there would have to be a
demonstration on their part, which indicates that they
intended to be a "real" resident. She added that there are
residency indicators which are checked.
Co-Chair Williams commented that five years is a long time
to keep track of an individual. Ms. Elgee replied that the
State of Alaska would not attempt to keep track. If they
returned to the State, then it would be their responsibility
to make the contact.
Representative Davies WITHDREW the MOTION to amend.
Co-Chair Mulder spoke in support of the 60-day provision
change. He noted his concern with the continued senior
citizen property tax exemption.
Representative Davies commented that program accomplishes
the State's original function. He noted that legislation
does provide for "honoring our pioneers". He claimed that
the tax exemption does have the effect of keeping families
together. Representative J. Davies recommended that there
be a financial "means" test used to qualify for the
exemption. He stressed that there remains a societal reason
to encourage seniors to stay in the State.
Co-Chair Mulder MOVED to report HB 162 out of Committee with
individual recommendations and with the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 162 was reported out of Committee with a "do pass"
recommendation and a fiscal note by the Department of
Administration dated 3/22/01.
TAPE HFC 01 - 69, Side B
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