Legislature(2007 - 2008)BELTZ 211
04/12/2007 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB171|| SB135 | |
| SB40 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 171 | TELECONFERENCED | |
| += | SB 135 | TELECONFERENCED | |
| + | SB 40 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 40-LONGEVITY BONUS REAPPLICATIONS
10:01:47 AM
CHAIR MCGUIRE announced the consideration of SB 40.
SENATOR BILL WIELECHOWSKI, Alaska State Legislature, sponsor of
SB 40, said the longevity bonus program still exists in statute;
however it has not been funded since 2003. SB 40 doesn't
reinstate the bonus but it corrects the application process to
allow those seniors who were receiving the bonus in 2003 to
reapply if the program ever gets funded. The program would fade
out as seniors pass away. The current CS is the work of
Legislative Legal Services, the Department of Law, and the
Department of Health and Social Services. The administration
supports the longevity bonus, he noted. The program was enacted
in 1972 for Alaska pioneers 65 and older. In 1993, Governor
Hickel proposed the phased reduction and eventual elimination.
Seniors who were receiving the bonus were assured that they
would be allowed to continue benefiting from the program as long
as they were living in Alaska. Many have counted on the bonus
for their retirement.
10:04:08 AM
CHAIR MCGUIRE said she firmly believes a good culture supports
its seniors. In Asia it is a sign of disrespect to leave the
elderly without a home. She asked about the equal protection
constitutional problems in recreating a program that only allows
some seniors to get it. She then asked how the program will
merge with the senior care program.
SENATOR WIELECHOWSKI said there are potential constitutional
issues. There was a challenge to the longevity bonus in 1996,
and the Superior Court upheld the program. It provides merely an
economic interest. Since the money has been phased out there is
potential for the court to strike it down now. SB 4 would not
allow people who are receiving senior care to receive the bonus.
He doesn't know if that exclusion exists today.
10:07:44 AM
TAMARA COOK, Director, Legislative Legal and Research Services,
said the court found that the stair-stepping phase-out was
constitutional even though it grandfathered in some recipients,
because on the reliance the recipients had on the bonus. The
reliance principle is fairly well developed in case law. The
difference now is the four-year gap where the reliance issue has
not been protected, so that weakens the argument that the state
is protecting a relying interest. A remnant interest could be
argued, but it won't be resolved until it is attempted.
CHAIR MCGUIRE said the remnant reliance issue would have to be
argued; otherwise it is denying some seniors a bonus with a
seemingly arbitrary date.
MS. COOK said the longevity bonus does not classify recipients
based on length of residency. It is not a discrimination against
newcomers.
CHAIR MCGUIRE asked about senior care.
MS. COOK said if the current senior care program and the
longevity bonus were on the books and superimposed, an
individual could get both, but the value of the bonus will go
into the eligibility calculation for the senior care program.
Some very poor elders could qualify for both. The senior care
program didn't exist when the longevity bonus was enacted.
10:13:43 AM
ELLIE FITZJARRALD, Acting Director, Division of Public
Assistance, Department of Health and Social Services, said
currently the senior care program has not considered longevity
bonus income because it has not been there. In SB 4 there is no
specific provision about whether the bonus would count in
determining eligibility. The fiscal notes assume that seniors
must choose to either receive the longevity bonus or participate
in the senior care program, but not both. It is not spelled out
in the bill, so that decision needs to be made, she concluded.
CHAIR MCGUIRE asked if the permanent fund dividend counts
towards income for qualifying for the senior care program.
10:15:06 AM
MS. FITZJARRALD said it doesn't count.
SENATOR BUNDE pointed out that "for those that are aghast about
spending any of the earnings of the permanent fund, we spend
about $30 million a year on the hold harmless for people who
would lose their welfare if they received a dividend." He agreed
with the need to provide respect for elders; however, he doubts
that not giving the Hickels, Murkowskis, or himself a longevity
bonus would show a lack of respect. He asked Ms. Cook if
reliance means needs-based.
10:16:36 AM
MS. COOK said reliance interest is not defined as needs-based.
It is the notion of the government changing something that
someone relied on. The judge in the case didn't make any
suggestion that the reliance being protected was needs-based,
only that a person might make a financial decisions based on the
continuation of a program.
SENATOR BUNDE said the sponsor noted that Governor Hickel made a
promise, but there was no promise from the legislature. "When
the sponsor statement said 'we made a promise,' I reject that
notion. I was no party to any promise like that." The sponsor
statement speaks of Alaska settlers, but most people that were
receiving the bonus were not longtime Alaskans. He said he
rejects the notion that it is a moral obligation.
10:18:50 AM
SENATOR STEVENS noted that he also hears from people that it was
a promise given. When he was on the borough assembly, a person
could not encumber future assemblies by decisions. "What legal
grounds are we on when someone says that it was a promise and
you have an obligation to fulfill it?"
MS. COOK said every obligation on the books is dependent on an
appropriation. Even private contracts, implied or explicit, rely
on the continuation of appropriated money. Whenever any citizen
does business with the state, there is always the possibility
that a program will not continue, especially a benefit program.
It is a well-understood legal principle, but it may have nothing
to do with how the common person views it.
10:20:47 AM
SENATOR FRENCH said beneficiaries are dying. How old will the
youngest be if the program is continued?
SENATOR BUNDE said the cost will be over $150 million.
MS. FITZJARRALD said she believes it is age 75.
SENATOR BUNDE pointed out the senior property tax exemption is
on the books, but the state has chosen not to fund it.
10:21:57 AM
RALPH HUNT, Pioneers of Alaska, Juneau, said he has been in
Alaska for 57 years. He said he is 90-years-old and supports the
program. There are a lot of seniors that the money meant they
could do things they couldn't do otherwise. "It should be
reinstated." He once suggested to former Governor Murkowski
another way to save money and was told it wasn't feasible.
SENATOR BUNDE said there was a proposal from the AARP to make
the bonus a needs-based program. That seemed like a good
compromise.
MR. HUNT said he would support that. It is nice to have, but
there are quite a few people who do need it. There have been
people who left the state because it was gone.
10:24:34 AM
RITA HATCH, Volunteer, Older Persons Action Group, said she
volunteers with seniors everyday, many of whom have lost the
bonus and want it back. Many have hardly a decent living without
it. If funded, "SB 40 will be a technical fix that will re-
qualify all of us so that we would be eligible again."
10:25:40 AM
PAT LUBY, Director, AARP Alaska, said SB 40 is a technical fix
that if the longevity bonus should be restored, previously
eligible seniors will again be eligible. This is a good idea.
SENATOR BUNDE said he worked with him before senior care was
available, and Mr. Luby said AARP would accept a needs-based
benefit.
MR. LUBY said an AARP principle is that government will never
have enough money to do what needs to be done, so money should
go to those in need. We definitely support a needs-based
program, he stated.
10:27:35 AM
CHAIR MCGUIRE closed public testimony on SB 40 and held the bill
in committee.
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