Legislature(1999 - 2000)
04/12/1999 09:07 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SENATE BILL NO. 40 "An Act relating to eligibility for the longevity bonus; and providing for an effective date." ALISON ELGEE, Deputy Commissioner, Department of Administration testified to this bill that was submitted at the request of the Governor. She told the committee the bill would take the existing longevity bonus program and amend it to provide for an income cap for eligibility. The proposed income cap would be $60,000 for a single individual and $80,000 for a married couple. The proposal would disqualify individuals who exceeded those income limits in the qualifying year. It would not be a permanent disqualification. Instead, the senior would be suspended, and if they continued to meet the other eligibility requirements, such as residency, they could return to the program if their income fell below those levels. In looking at the longevity bonus program, Alison Elgee shared that the feeling was that a number of seniors depended on longevity bonuses for their monthly expenses. However, the seniors earning above the proposed income cap levels were not dependent upon the bonus for day-to-day living expenses. She concluded saying, it was a concern that so much of state spending was on the pass-through side. This was the Governor's attempt to propose a means to reduce some of the formula program expenses in a way that would be least harmful to the people that were currently benefiting. Co-Chair John Torgerson asked about the provision to verify the gross income amounts and required the applicants to provide access to records. He wondered why the department didn't just refer to tax forms for income verification. He thought the income amounts should be taken straight from line 33 of the 1040 IRS forms. Alison Elgee replied that was an approach that would work. She noted that to implement the program, the department would need to reprogram their computer system. She also anticipated there would be more disputes and more hearing officer time would be required to address those. Co-Chair John Torgerson asked about verification of all participants in the program. Alison Elgee said the department would expect individual certification of their own income, but that the department would request records from participants in the case of an audit. Co-Chair John Torgerson asked if the department felt it would be an unjust burden to require submittal of a copy of the 1040 form. Alison Elgee answered it would be a policy call of the Legislature. She noted earlier concerns about providing the state too much information. Co-Chair John Torgerson wanted a definition of "income received from bonuses" as stated on line 13. Alison Elgee explained that was the longevity bonus itself. This would prevent someone from becoming disqualified simply due to the receipt of the longevity bonus the previous year. Senator Randy Phillips questioned the preference given to single people over married couples. He wondered if this would be an incentive for seniors to dissolve marriages or "live in sin" to manipulate the system. Alison Elgee had no comment. Senator Randy Phillips warned that if this bill passed, that would happen. He said it was not unheard of to have unmarried seniors living together to meet their cost of living. Co-Chair John Torgerson asked if the department planned to verify where recipients lived. Alison Elgee responded that the longevity bonus program had always operated on an honor system and the department had very few problems as result of that. She noted they did do periodic verifications against the Permanent Fund Dividend records. The Legislative Audit Division reviewed the longevity bonus program rolls in the past and found very few problems. Therefore, the department did not anticipate much abuse with the passage of this legislation. Alison Elgee added to her earlier testimony that the Department of Health and Social Services SSI and Adult Public Assistance Program were federal programs that required the longevity bonus program hold harmless the longevity bonus recipient just as they were held harmless for permanent fund dividends. Otherwise, they would see a reduction in SSI. These were the programs for the poorest seniors in the state. The way the federal legislation was written, if the state provided an income cap in the longevity bonus program, even though the income cap was higher than the poverty levels, the state would no longer be obligated to hold the SSI recipient harmless. That would save just under $2 million general fund for the Department of Health and Social Services. JEFF JESSEE, Executive Director, Alaska Mental Health Trust Authority, Department of Revenue, testified. The trustees' interest in this bill related to their concern over the growing need for services to elderly Alaskans. That over- 85 population group was the fastest growing segment in the state. The need for community services, in-home support and other alternative ways of providing services to this group of Alaskans was going to be one of the most significant financial challenges both to the Legislature and to the Trust in the coming decade. The trustees made a recommendation to the Commission on Aging to consider modifications to programs like the longevity bonus program as a way to create funding to address some of these long-term issues. He gave examples of the assisted living legislation heard in the committee last week. One of the arguments raised was the question of how to fund the raise in rates paid to the providers. The trustees suggested using the longevity bonus funds to help support these types of programs. Senator Randy Phillips asked if any members of the public present wished to comment on his earlier statement about favoritism given to non-married couples. There was no response. Break 9:20 AM / 9:28 AM Senator Sean Parnell offered a motion to move SB 40 from committee. There was no objection and it was so ordered.
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