Legislature(1997 - 1998)
05/07/1997 08:45 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 2
"An Act allowing, for the purposes of permanent fund
dividend eligibility, an individual to accompany, as the
spouse or minor or disabled dependent, another eligible
resident who is absent for any of the following reasons:
vocational, professional, or other specific education for
which a comparable program is not reasonably available in
the state; secondary or postsecondary education;
military service; medical treatment; service in the
Congress or in the peace corps; to care for the
individual's terminally ill parent, spouse, sibling,
child, or stepchild; for up to 220 days to settle the
estate of the individual's deceased parent, spouse,
sibling, child, or stepchild; to care for a parent, spouse,
sibling, child, or stepchild with a critical
life-threatening illness whose treatment plan, as
recommended by the attending physician, requires travel
outside of the state for treatment at a medical
specialty complex; or other reasons that the
commissioner of revenue may establish by regulation;
requiring, for the purposes of permanent fund dividend
eligibility, a state resident to have the intent to remain
indefinitely; relating to the eligibility for 1992, 1993,
1994, 1995, 1996, and 1997 permanent fund dividends of
certain spouses and dependents of eligible applicants; and
providing for an effective date."
Representative Pete Kott, sponsor of the bill was invited to
join the committee. He read his sponsor statement into the
record. It was noted that eligibility should not be
determined through marriage. Representative Kott said they
were trying to restore the bill to its' original intent.
The state has filed an appeal with the Supreme Court.
Approximately 7,500 applicants would be affected by the bill
at present.
Senator Adams asked for an explanation of the Superior Court
ruling. Representative Kott noted there was a copy of the
December 1976 Superior Court ruling (Joan Hale vs. State of
Alaska, Department of Revenue, Permanent Fund Division)
enclosed as back-up material in committee members' files.
Senator Phillips asked about page 3, line 17.
Representative Kott said this referred to current status.
Co-chair Sharp asked about those applicants who were denied
and now out of state. He had a hard time accepting those
out of state could apply for the dividend but some of his
elderly constituents were unable to apply retroactively. He
wanted to know how intent to remain in Alaska was
established. Representative Kott said it was always
difficult to establish intent. However, each applicant must
satisfy eligibility for the dividend. Senator Adams voiced
concern giving the dividend to those with intent and in the
process denying real Alaskans.
Representative Kott further advised that those not applying
before 1998 would not be allowed to file. One could always
submit supplemental documents and then wait for a
determination of eligibility. Senator Donley asked about a
penalty for falsely applying for the dividend.
Representative Kott explained that it was a criminal
offense. Senator Donley again asked about the penalty.
Representative Kott said the dividends must be paid back and
there was a fine of $5,000. Witnesses on the application
were also subject to the same penalty. Senator Donley felt
it was hard for the state to collect the $5,000 fine and in
addition it should be increased. Due to the abuse situation
of the dividend if this bill is to pass there should be a
stiffer penalty and there should be additional tools
available to law enforcement officials. Representative Kott
concurred.
Senator Adams referred to page 4, section 4. Representative
Kott said those in the military must return once every two
years for thirty days in order to remain eligible for the
dividend.
Co-chair Sharp, at this point, advised there was to be a
statewide teleconference regarding this bill tomorrow
evening at 5:00 p.m. Any interested individual could also
fax their comments to the Senate Finance Committee
Secretary's office. He asked Senator Torgerson to hold his
amendment pending the statewide teleconference. Senator
Donley offered his further comments stating that he would be
willing to work with the department over the next year in
order to alleviate some standards. He referred specifically
to page 3, line 10.
Nanci A. Jones, Director, Division of Permanent Fund
Dividend, Department of Revenue was invited to join the
committee. She said the division did not support
retroactivity of the bill. She opposed section 4
(retroactive payments to spouses) and piecemeal absences.
She said reopening the filing date of applications was not a
good policy procedure. However, basically, she had always
encouraged the filing of this bill. Senator Phillips asked
if any benefits given out by the State since statehood had
been made
retroactive. Ms. Jones said she could not think of any.
Deborah Vogt, Deputy Commissioner, Department of Revenue,
was invited to join the committee. She said as far as she
could recall and had researched there was no precedence of
retroactivity. She felt this bill would set a very bad
precedence regarding retroactivity. Senator Phillips
recalled retroactivity regarding the veterans' discount for
land. Senator Adams said that bill passed because the money
had already been collected from the veterans so therefore
was a different matter. He further commented on eligibility
status and the intent of Alaskans to retain their residency.
He recommended that money could be held in escrow pending
proof of residency. Ms. Jones advised that this had been
looked into.
Ms. Vogt further advised the committee that all pending
applications per HB 4 of last year had been denied. Co-
chair Sharp indicated that failure of the legislature to
pass a bill meant "no". Senator Phillips further commented
on the topic stating that just because the legislature did
not pass the bill did not mean they did not take action on
the bill in committee. Hearings were scheduled and
testimony was taken. Senator Parnell felt that the
department could not deviate from a specific deadline
regarding filings and agreed that any retroactivity or delay
would set a bad precedence. Co-chair Sharp said the title
was too tight and nothing could be changed. It would
required a title change to get out of committee that would
need a 2/3 vote and that would be very difficult.
Senator Donley requested Ms. Jones provide an executive
summary and she said one would be provided the committee.
She referred to an Anchorage case where a sister had
continued to file on behalf of a deceased sister. In this
case the defendant was allowed to pay back the monies by
working in community service. Co-chair Sharp asked Ms.
Jones to include in her executive summary the total dollars
for retroactivity and the number of fraud connected with
out-of-state filings. Senator Donley also asked that
penalties, how the cases were prosecuted, fines, etc. be
included. Co-chair Sharp also offered his concern about the
filing deadline and said he opposed those out of state being
able to file; but not those in state. In response to a
question by Co-chair Sharp, Ms. Vogt said that the division
had always paid legal resident aliens. Co-chair Sharp asked
the requested information be submitted as soon as possible.
He set aside HB 2.
After a brief at ease, Co-chair Sharp called HB 63.
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