Legislature(2005 - 2006)CAPITOL 106
03/29/2005 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| HB128 | |
| HB13 | |
| HB31 | |
| HB186 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 128 | TELECONFERENCED | |
| += | HB 13 | TELECONFERENCED | |
| + | HB 31 | TELECONFERENCED | |
| + | HB 186 | TELECONFERENCED | |
HB 186 - PERMANENT FUND: QUARTERLY PAYMENTS CHAIR WILSON announced that the final order of business would be HOUSE BILL NO. 186, "An Act relating to quarterly payments of a permanent fund dividend, and to a permanent fund dividend and eligibility for public assistance; and providing for an effective date." 5:52:15 PM REPRESENTATIVE JAY RAMRAS, Alaska State Legislature, sponsor of HB 186, relayed that the bill was engendered in part by comments he'd received from constituents when the longevity bonus program was discontinued - people complained about the loss of their monthly checks, not about the loss of the amount they received yearly, saying that they used their longevity bonus checks to pay monthly bills. Additionally, he remarked, when permanent fund dividend checks (PFD) are received, he has noticed that many people cannot resist spending that money on large purchases, sometimes even incurring debt, rather than using the money for necessities. REPRESENTATIVE RAMRAS said that under HB 186, eligible participants in the PFD program who sign up for direct deposit would be able to request that their PFD come in quarterly payments, with the payments occurring in October, January, April, and July. He posited that such a payment system would resemble the university tuition program, and could additionally provide people with an incentive to save for educational purposes. Such a payment system, he assured the committee, is not designed for those that are on public assistance or for those that already have excellent savings habits, and suggested that those in rural Alaska could benefit from such a system. REPRESENTATIVE RAMRAS predicted that perhaps only one or two out of every hundred PFD recipients would participate in a quarterly payment program, added that the State will be earning interest on the latter three quarterly payments, and suggested that via that interest the quarterly payment program could pay for itself and its initial implementation costs. He emphasized that the proposed quarterly payment program would be voluntary - PFD recipients would merely elect to participate - though he noted that research has indicated that a monthly payment program would be too costly to implement. In response to a question, he acknowledged that those in urban areas could also benefit from a quarterly payment program. REPRESENTATIVE ANDERSON remarked that those with substance abuse problems could just as easily [binge away] four payments as opposed to one, but noted that in dry communities at least one could not travel to a big city and go on a binge if he/she were only getting one-quarter of a PFD at a time. REPRESENTATIVE RAMRAS acknowledged that point, adding that in rural communities the commercial outlets for purchasing [big- ticket] items are not available. He concluded by offering his belief that the quarterly payment program will be simple to implement, and will offer Alaskans a different way to view their PFDs, particularly as the PFDs get larger. The committee took an at-ease from 6:01 p.m. to 6:06 p.m. 6:06:39 PM PAUL DICK, Chief, PFD Operations, Permanent Fund Dividend Division, Department of Revenue (DOR), reiterated comments made by Representative Ramras regarding how HB 186 will be implemented, and explained that the division is assuming it will have the authority to disallow those with garnishments against their records from participating in the quarterly payment program, as well as the authority to remove from the quarterly payment program those who have garnishments attached to their records after the initial quarterly payment is made; the PFDs in such instances would go towards paying the garnishments as a lump sum total. He added that the fiscal note reflects merely an estimate of the cost of rewriting the current PFD payment system. Furthermore, he noted, the cost of the program would increase as the number of participants increases. CHAIR WILSON asked how long it would be before the quarterly payment program could pay for itself via the interest earned. MR. DICK said that according to the fiscal note, the revenues would immediately begin to exceed the operating costs, though the one-time implementation cost has not been factored into that estimate. In response to another question, he indicated that the division cannot yet speak to the issue of whether or not it supports the bill. REPRESENTATIVE McGUIRE said she supports HB 186, and characterized it as an innovative way of looking at [the PFD and money-management issues]. 6:11:30 PM REPRESENTATIVE ANDERSON moved to report HB 186 out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE KOHRING indicated that he has concerns about the government basically acting as a "nanny" and telling members of the public that they are fiscally irresponsible and can't manage their finances. CHAIR WILSON noted that the proposed quarterly payment program is voluntary. REPRESENTATIVE KOHRING said that alleviates his concerns. REPRESENTATIVE McGUIRE opined that the bill will give Alaskans choices. CHAIR WILSON added her belief that the bill will allow the person to have some money while also allowing the State to earn some interest, essentially creating a win-win situation. 6:14:04 PM CHAIR WILSON, noting that there were no objections to the motion, announced that HB 186 was reported from the House Health, Education and Social Services Standing Committee.
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