Legislature(1997 - 1998)

03/06/1997 03:42 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                 SENATE STATE AFFAIRS COMMITTEE                                
                         March 6, 1997                                         
                           3:42 p.m.                                           
  MEMBERS PRESENT                                                              
 Senator Lyda Green, Chairman                                                  
 Senator Jerry Ward, Vice-chair                                                
 Senator Jerry Mackie                                                          
 Senator Mike Miller                                                           
  MEMBERS ABSENT                                                               
 Senator Jim Duncan                                                            
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 54                                                            
 "An Act relating to eligibility for the longevity bonus; and                  
 providing for an effective date."                                             
  HEARD AND HELD                                                               
 SENATE JOINT RESOLUTION NO. 4                                                 
 Relating to an amendment to the Constitution of the United States             
 setting out the authority of the United States Congress and of                
 state legislatures to enact laws relating to limits on election               
 campaign expenditures.                                                        
  PASSED SJR 4 OUT OF COMMITTEE                                                
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 54 - No previous Senate committee action.                                  
 SJR 4 - No previous Senate committee action.                                  
  WITNESS REGISTER                                                             
 Senator Dave Donley                                                           
 Alaska State Capitol                                                          
 Juneau, Alaska  99801-1182                                                    
  POSITION STATEMENT:   Sponsor of SJR 4                                       
 Alison Elgee                                                                  
 Deputy Commissioner                                                           
 Department of Administration                                                  
 P.O. Box 110200                                                               
 Juneau, AK  99811-0200                                                        
  POSITION STATEMENT:   Testified in support of SB 54.                         
  ACTION NARRATIVE                                                             
 TAPE 97-8, SIDE A                                                             
 Number 00                                                                     
  CHAIRMAN LYDA GREEN  called the Senate State Affairs Committee               
 meeting to order at 3:42 p.m.  Senators Miller, Ward and Green were           
 present. SJR 4 was the first order of business before the                     
         SJR  4 FED CONST AM RE: CAMPAIGN EXPENDITURES                        
  SENATOR DAVE DONLEY , sponsor of the measure, explained SJR 4                
 proposes to Congress a U.S. constitutional amendment to empower               
 Congress to set reasonable campaign spending limits for election to           
 federal offices, and to allow states to set reasonable limits for             
 campaign expenditures for state and local offices.  SJR 4 parallels           
 identical resolutions currently before Congress and addresses the             
 problem raised with the U.S. Supreme Court decision of Buckley v.             
 Valeo which prohibits campaign spending limits because the Court              
 has equated campaign spending with the right to free speech.  There           
 is a national movement to give government the authority, under the            
 Constitution, to limit campaign spending.                                     
 Number 035                                                                    
  CHAIRMAN GREEN  noted there is general concern about what a                  
 Constitutional Convention could encompass.  She added states tend             
 to withdraw requests for a Constitutional Convention when the                 
 possibility actually arises.                                                  
  SENATOR DONLEY  responded every time this country has come close to          
 holding a Constitutional Convention one of two things has happened:           
 a state withdraws its request, or Congress has taken action to                
 amend the Constitution on its own.  During the last election, the             
 voters of Alaska approved, and in fact mandated, that the State use           
 this identical procedure in asking for a constitutional amendment             
 for term limits.  Most people do not want a Constitutional                    
 Convention but a serious change in the federal system over the last           
 two centuries has occurred.  When the U.S. Constitution was                   
 originally drafted, states had a lot of very important powers they            
 no longer have to encourage changes on the federal level, and                 
 changes to the federal Constitution.   One example of a federal               
 check and balance procedure between the federal government and the            
 states that no longer exists is that State legislatures originally            
 chose their senators.  If a state wanted a U.S. constitutional                
 amendment, legislators could instruct their senators to vote that             
 way.  States no longer have that authority.  Resolutions are                  
 virtually the only remaining power that rests with the states to              
 compel action by the federal government.  If the states fail to use           
 this power occasionally, they have no remaining powers in the                 
 federal system.  It is clear no one wants a Constitutional                    
 Convention, but SJR 4 sends a very serious message to Congress and            
 will spur it to action.  He stated he would be one of the first to            
 advocate that if, 25 to 30 other states made the same request,                
 Alaska withdraw its request, if Congress does not act                         
  SENATOR WARD  moved SJR 4 out of committee with a zero fiscal note           
 and individual recommendations.  He noted he plans to speak to                
 Judiciary Committee members for assurance that a Constitutional               
 Convention will not take place as a result of SJR 4.  There being             
 no objection, SJR 4 moved out of committee with individual                    
           SB  54 MAXIMUM INCOME FOR LONGEVITY BONUS                          
  ALISON ELGEE , Deputy Commissioner of the Department of                      
 Administration (DOA), gave the following overview.  SB 54 is                  
 comparable to legislation introduced by the Governor during the               
 last legislature and sets an income cap for eligibility for receipt           
 of the longevity bonus payment: $60,000 for a single individual,              
 and $80,000 for a married couple living together.  While trying to            
 reduce state expenditures, the Governor is trying to determine                
 where those reductions will have the least impact and believes                
 longevity bonus payments for people at those income levels are not            
 necessary to maintain a livelihood in Alaska.  One side benefit of            
 establishing an income cap to the longevity bonus program is that             
 federal rules regarding Supplemental Security Income (SSI) require            
 recipients be held harmless from the impact of receipt of the                 
 longevity bonus payments; therefore the state pays about $2 million           
 in general funds to the Adult Public Assistance Program as                    
 longevity bonus hold harmless money.  If the income cap was                   
 established statutorily, the state would no longer have to pay.               
 The Administration is estimating SB 54 will impact approximately              
 six percent of current longevity bonus program recipients, and the            
 state will save about $6 million annually.  In implementing SB 54,            
 income levels will be based on adjusted gross income as reported              
 for federal tax purposes, minus longevity bonus payments. For those           
 exceeding the limits, longevity bonus payments would be suspended             
 for one year, so they can be reinstated if an applicant's income              
 fluctuation was circumstantial.                                               
 Number 156                                                                    
  SENATOR WARD  asked if the proposal is to take the longevity bonus           
 away from seniors with an income over $60,000.   MS. ELGEE  repeated          
 the amount would be $60,000 for a single person, and $80,000 for a            
 married couple.                                                               
  SENATOR WARD  asked if this proposal changes the intent of the               
 original program to a needs-based program.   MS. ELGEE  explained the         
 longevity bonus program has undergone many changes since its                  
 inception.  The original concept behind the program was to reward             
 those individuals that resided in the State prior to Statehood.  In           
 1984, as the result of a lawsuit, this program was opened up to any           
 senior citizen with one year of residency.  In 1994, legislation              
 passed which created a phase-out   of the program.  Payment levels            
 were reduced and the program was closed to new applicants as of               
 Dec. 31, 1996.                                                                
  SENATOR WARD  questioned at what point in the program it was decided         
 certain people would be ineligible based on income.   MS. ELGEE  said         
 the Governor is making that proposal with SB 54.  She repeated the            
 Governor is looking at ways to reduce state spending that will have           
 the least impact on the public, and the primary need for the                  
 longevity bonus is amongst seniors who depend on it to pay living             
 expenses.  People at the income levels established in SB 54 do not            
 require the longevity bonus payments to continue their residency in           
 Number 206                                                                    
  SENATOR WARD  asked why the Governor would want to take money away           
 from our pioneers.   MS. ELGEE  stated she believes that if there was         
 plenty of money for all of the needs of the State, this proposal              
 would not be submitted by the Governor, however that is not the               
 case.  Both the Administration and the Legislature have agreed on             
 the need to control state spending.  She repeated the Governor                
 believes this is one way to achieve that goal with the least impact           
 on the population affected.                                                   
  SENATOR WARD  thought this proposal attacks those who least deserve          
 to be attacked, of anyone.   MS. ELGEE  answered in making this               
 proposal, the Governor did leave all other senior programs at                 
 current funding levels.  The longevity bonus program proposal was             
 a very conscious choice, in order to protect the other senior                 
 programs that serve more needy individuals.                                   
 Number 224                                                                    
  SENATOR MACKEY  stated SB 54 is part of the Governor's budget plan.          
 If SB 54 does not pass, he will have an $8 million hole in his                
 budget plan.  Over the last six or seven years, the Legislature was           
 confronted with the Court decisions.  The program now serves any              
 senior who has been a resident for one year, and about 20 percent             
 of the recipients have been residents for less than five years.               
 The cost of this program has risen about $7 to $11 million per year           
 because of the number of new applicants.  About three years ago the           
 Legislature passed legislation to phase it out because there was no           
 way the State could withstand the growth of the program at a time             
 it was having to down-size.                                                   
  CHAIRMAN GREEN  asked how seniors would prove their income and               
 whether the amount would be based on income or assets.   MS. ELGEE            
 said income would be the only criteria, so people with assets, but            
 no income from those assets, would not be penalized.                          
 Number 257                                                                    
  CHAIRMAN GREEN  felt there are landowners with the potential for             
 high earning power and noted she disagrees with that exemption.               
  SENATOR MACKIE  believed the Governor's reasoning is that many               
 seniors with a limited fixed income critically need the longevity             
 bonus program to make ends meet, but the policy question is should            
 seniors making over $80,000 per year continue to receive payments             
 when we cannot really call it a longevity bonus program any longer.           
  SENATOR WARD  agreed the program is not doing what it was originally         
 designed to do, but questioned why seniors who have done well                 
 financially should be penalized.  He commented there are many areas           
 to cut the budget without attacking senior citizens, and believed             
 SB 54 to be bad public policy.  He stated he wholeheartedly                   
 disagrees with this policy, and that the Zobel case did not require           
 seniors to submit tax reports to prove they are poor.                         
 Number 300                                                                    
  SENATOR MACKIE  asked how seniors would prove their income and what          
 fiscal impact that might have on DOA.   MS. ELGEE  explained there            
 will be no additional administrative costs.  The program has been             
 operating on an honor system.  When seniors leave the State, their            
 payments are suspended while they are out-of-state; they are asked            
 to notify DOA of their departure and return.  DOA cross checks                
 against permanent fund dividend eligibility to determine whether              
 people are maintaining residency in the State.  DOA intends to                
 operate this aspect of the longevity bonus program in a similar               
 manner.  Recipients would be subject to audit, and if fraud was               
 discovered, they would no longer be eligible for the program.                 
  SENATOR MACKIE  asked if that process could be accomplished without          
 additional employees.   MS. ELGEE  answered DOA has three employees           
 who administer the longevity bonus program and works with OMB staff           
 for auditing services, and plans to continue with that approach.              
 Number 321                                                                    
  CHAIRMAN GREEN  noted she received an inquiry about the message from         
 the Governor, enclosed with longevity bonus checks, which alludes             
 to the Governor's proposal for his 1998 capital budget monies for             
 a senior citizens housing development program.  That program will             
 "...provide grants for buying land, site preparation, building                
 materials, continuing maintenance of Pioneer Homes across Alaska,             
 and completion of special care units in the Sitka and Palmer                  
 Pioneer Homes for the care of residents with Alzheimers Disease and           
 related disorders."  She stated her concern about the misuse of               
 including messages with the payment, and asked about the omission             
 of any reference to SB 54.  She questioned whether seniors would be           
 notified about SB 54 in the next mailing.                                     
  MS. ELGEE  commented DOA has done some public information work and           
 published an article in the Senior Voice in December or January               
 that outlined the proposal and the necessity for SB 54.  She                  
 was unaware of whether the Governor intends to include a message              
 about SB 54 in longevity bonus checks, but offered to pass the                
 suggestion on to his staff.                                                   
  CHAIRMAN GREEN  announced the State Affairs Committee would be               
 holding a teleconference on SB 54 at 10:30 a.m. on Saturday and               
 adjourned the meeting at 4:08 p.m.                                            

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