HB 162-ABSENCES UNDER LONGEVITY BONUS PROGRAM    SENATOR THERRIAULT recapped the changes discussed during the previous hearing on the bill. In Section 1 changing 30 days to 60 days would allow recipients to be gone from the state for a longer period of time and still receive their check. That would cost the system about $280,000.00. He asked for an explanation of the savings. REPRESENTATIVE GRETCHEN GUESS, bill sponsor, said the savings comes from moving the unpaid leave from 90 days to five years. CHAIRMAN THERRIAULT explained that these individuals would retain their eligibility, but while they were gone from the state they would not receive a check. Once they returned to the state they could start receiving the check again. He asked how much that would save. REPRESENTATIVE GUESS replied that would save the state $435,000.00. CHAIRMAN THERRIAULT said he wanted all the savings, but didn't want the expense. He spoke to Representative Guess about splitting the difference and going from 30 days to 45 days, which would cut the expense in half. REPRESENTATIVE GUESS said Senator Halford expressed concern about the five year term and she wasn't sure whether he wanted to change that or not. SENATOR HALFORD said the way the fiscal note reads, the bill saves $147,000.00 but the analysis says that the normal decline in payments is the savings and the bill costs the state money. Section 1 looks like it costs an additional $288,000.00. REPRESENTATIVE GUESS agreed. CHAIRMAN THERRIAULT said that is because people are allowed to travel out of state for a longer period of time and retain their check. SENATOR HALFORD said he understood that. He questioned how Section 2 is supposed to save $435,000.00. REPRESENTATIVE GUESS said it's based on the assumption that people will stay out of state longer and not return to the state just to keep their eligibility. The decrease is how they estimated FY03 into the future and keeping the same 10 percent savings formula but knowing that the payments were decreasing. There is a decrease in the savings because of the payment decrease. The savings is a static formula but the payment goes down 6.7 percent. SENATOR STEVENS asked whether there was any relationship to the fact that the program is diminishing each year. SENATOR HALFORD said that's the cause. He wanted to make sure the savings was an actual savings without regard to the amount it's already going down. REPRESENTATIVE GUESS said that is what the department has testified to up to this point. SENATOR HALFORD then asked how the five year return worked. REPRESENTATIVE GUESS replied now it's 90 days. If someone is off the role for 90 days, then they are removed completely. This would change that timeframe to five years. The department set this term so they could clean up their records. Individuals may also apply for a one year sabbatical once every five years. SENATOR HALFORD said he was concerned about the fiscal implication of people that have been gone up to five years and wondered if they could come back and reenroll. JAMES KOHN, Director of the Division of Alaska Longevity Programs, said no one has been added to the bonus program since December 31, 1996 making this a fixed group of people. Some seniors want to go out of the state for a period of time that exceeds 90 days in a row or 180 days in a year. However, they feel they need a cutoff date after which they can be dropped from the program. At a minimum, the term should be one year, but he would prefer some time over two years. There are individuals that go out on mission work and are gone for several years but they will return because Alaska is their home. He would like to make it possible for people to leave the state as they wish and that would save the state money because they wouldn't be paying those individuals the bonus. SENATOR HALFORD said he is concerned about the people that have made the decision to leave in the last four years and seven months. Could they return and come back into the program and what would the economic impact be? MR. KOHN said if someone has been removed from a program under present law, a change in the law would not allow him or her to reapply to return to the program. SENATOR HALFORD asked whether that was clear. He wanted to make sure this is the case. MR. KOHN thought there was language that said "from this date forward." If that language isn't present, then it should be inserted. It's a good idea to make that clear. SENATOR HALFORD said he doesn't have as much difficulty going out three years if it's prospective. He didn't want to open an unintended window. CHAIRMAN THERRIAULT asked how people could come back if under the current program they're out if they've been gone 90 days. MR. KOHN replied there are exemptive reasons for being gone. Medical reasons and caring for a family member are such exemptions. CHAIRMAN THERRIAULT noted Ms. Walker's situation as testified to during the previous hearing. SENATOR HALFORD made a motion to adopt conceptual amendment 1 to change the five year term to three years and request language that makes it clear that it is prospective not retrospective. There being no objection, amendment 1 was adopted. CHAIRMAN THERRIAULT made a motion to adopt amendment 2 changing "60 [30] days" to "45 [30] days" on page 1, line 6. SENATOR HALFORD asked the age of the youngest people receiving the bonus. MR. KOHN said they had to be 65 in 1996 so they would be 73 to 74 years old and they would be in the $100.00 per month bracket. To be receiving $250.00 per month you would have to be 76 to 77 years old. CHAIRMAN THERRIAULT said part of his dilemma about dealing with the program in general is the people that are receiving the bonus that are newcomers to the state while people who lived in Alaska since the 1940s didn't qualify because they missed the cut off date. REPRESENTATIVE GUESS said she would like to keep the 60 days but she appreciates the committee process. SENATOR DAVIS objected to proposed amendment 2. CHAIRMAN THERRIAULT asked for a roll call vote on amendment 2. The motion failed, three to one with Senators Davis, Stevens, Halford voting no and Chairman Therriault voting yes. SENATOR DAVIS made a motion to move SCS HB 162(STA) and attached fiscal note from committee with individual recommendations. There being no objection, it was so ordered.