01/24/1995 08:05 AM House STA

 HSTA - 01/24/95                                                               
 Number 620                                                                    
                                                                               
 HB 70 - END PERMANENT FUND DIVIDEND HOLD HARMLESS                           
                                                                               
 CHAIR JAMES said she would like to go on to HB 70 briefly and get             
 the sponsor statement so she could carry it over to the next                  
 meeting date.                                                                 
                                                                               
 REPRESENTATIVE PETE KOTT, SPONSOR OF HB 70, testified that this               
 measure would add a few dollars to the permanent fund dividend                
 check.  At the present time, a recipient of welfare who receives a            
 Permanent fund dividend (PFD), fails to qualify for continued                 
 welfare benefits and depending on the circumstance, the                       
 disqualification could last up to four months.  Generally, it is              
 one month.  Welfare benefits are then made to the individual, under           
 what is known as the hold-harmless program.  That program is funded           
 by deducting that amount necessary for the welfare benefits from              
 everyone else's PFD check.  This year it was in the excess of $41.            
 The amount has grown of the years - it started off at a little over           
 $6.  Over the course of time, the entire program has cost every               
 other Alaskan about $240.  The Department of Health and Social                
 Services has eight full-time employees that administer this                   
 particular program.  HB 70 would eliminate this hold-harmless                 
 program.  It would mean that PFD checks would be treated as                   
 ordinary income for purposes of determining welfare eligibility,              
 and this is the same way that income is treated by the Internal               
 Revenue Service.  It also means that PFD recipients would not                 
 continue to fund a program that allows individuals to receive that            
 money while they are still on welfare.  Representative Kott's                 
 belief is that it is a step self-sufficiency, and accomplishing               
 welfare reform.  There is no fiscal note associated with it.  They            
 do not know what the fiscal ramifications would be.  All they know            
 is that there are about eight individuals who work toward this                
 particular end in the Department of Health & Social Services.                 
                                                                               
 CHAIR JAMES asked for questions, and the committee agreed to                  
 reserve questions for a later period.   She said the bill will be             
 held over to Thursday, January 31, 1995.