Legislature(1993 - 1994)
03/03/1994 01:30 PM House 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 FINANCE COMMITTEE
March 3, 1994
1:30 P.M.
TAPE HFC 94 - 46, Side 2, #000 - end.
TAPE HFC 94 - 47, Side 1, #000 - #276.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee meeting
to order at 1:30 P.M.
PRESENT
Co-Chair Larson Representative Foster
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Hoffman was not present for the meeting.
ALSO PRESENT
Representative Jim Nordlund; Thomas Williams, Director,
Permanent Fund Division, Department of Revenue; Joe
Josephson, (testified via teleconference), Retired Senator,
Attorney, Anchorage; Dan Bair, (testified via
teleconference), Attorney, Anchorage.
SUMMARY
HB 260 An Act relating to the membership of the Alaska
Chilkat Bald Eagle Preserve Advisory Council.
HB 260 was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Revenue.
HB 364 An Act relating to allowable absences from the
state for purposes of eligibility for permanent
fund dividends; and providing for an effective
date.
HB 364 was reported out of Committee with "no
recommendation" and with a zero fiscal note by the
Department of Revenue dated 2/14/94.
HOUSE BILL 260
"An Act relating to the membership of the Alaska
1
Chilkat Bald Eagle Preserve Advisory Council."
Representative Grussendorf MOVED to report HB 260 out of
Committee with individual recommendations and with the
accompanying fiscal note.
HB 260 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
of Revenue.
HOUSE BILL 364
"An Act relating to allowable absences from the state
for purposes of eligibility for permanent fund
dividends; and providing for an effective date."
REPRESENTATIVE JIM NORDLUND stated that HB 364 proposes to
add two additional allowable absences to the definition of a
state resident for the purposes of determining eligibility
for permanent fund dividends. Those exemptions would be
service in the United States Merchant Marines and service in
the commissioned corps of the United States Public Health
Service (PHS).
He believed that both of the circumstances are substantially
similar to the already existing exemption for military
service and that they should be granted the same exemption
status. Under federal law, the PHS Commissioned Corps are
designated as one of the seven "uniformed services" of the
Armed Forces. The rank structure is identical or similar to
that of the US Navy. PHS officers wear military uniforms
and are issued military ID cards. They also receive the
same pay and allowances, medical and dental care, Veteran's
Administration benefits, life insurance, and voting rights
as other branches of the Armed Forces. They are subject to
military flight, base and exchange privileges and they are
subject to the same obligations.
Currently, there are a total of 532 active duty PHS officers
who claim Alaska residence. Of that total, 191 are assigned
to duty stations outside Alaska.
Representative Nordlund added that the United States
Merchant Marines are overseen by the maritime Administration
(MARAD). MARAD is charged by the President of the United
States with the responsibility of developing and maintaining
a merchant marine capable of meeting America's defense and
commercial trade requirement.
Representative Nordlund stated that there has been a
superior court decision issued which applies to this
legislation. The court ruled that Public Health Service
2
employees are treated the same as military and should also
be eligible for the Permanent Fund Dividend (PFD).
THOMAS WILLIAMS, DIRECTOR, PERMANENT FUND DIVISION,
DEPARTMENT OF REVENUE, stated that the Division has received
from the Public Health Service, a list of individuals who
have claimed Alaska residency. He added that 625
individuals are claiming Alaska residency as of December,
1992. Of those, 124 were no longer in active duty in the
Public Health Service and there are 200 who are claiming
Alaska residency who are stationed outside the State.
Mr. Williams pointed out that under the current allowable
absence provision, the Commissioner has the authority to add
allowable absences as authorized by the Legislature. The
Commissioner has to date, declined to add merchant mariners
or PHS officers. He added, through the court case, the
plaintiffs are asking for the same treatment as the military
receives.
Mr. Williams discussed the status of individuals serving in
the Merchant Marines. Current statutes allow an individual
to maintain an eligibility period for the dividend up to
half of that period being one hundred eighty days and they
can work a temporary job during that time.
Representative Hanley asked if the International Guard
personnel were to receive the PFD. Mr. Williams stated,
that they are on active duty and are considered armed
forces. Representative Hanley remarked that Merchant
Marines are often employed by private companies and he felt
they should be designated by a different class.
Discussion followed among Committee members regarding the
number of active duty PHS officers connected with Alaska and
the similarities between PHS officers and the Armed Service
Officers. Representative Therriault stated that the
permanent fund dividend should be available for those
persons who are residents of the State and who live in
Alaska.
JOE JOSEPHSON, (TESTIFIED VIA TELECONFERENCE), RETIRED
SENATOR, ATTORNEY, ANCHORAGE, spoke in support of the
legislation. He stated that he represented the plaintiff,
reiterating that PHS officers receive essentially all
benefits accorded military members. They are subject to
analogous obligations. The PHS Commissioned Corps is
distinguishable simply because it's purpose differs from
that of the other Federal Uniformed Services. He referenced
a case regarding Captain McCarthy, stating that to date one
superior court judge has held the distinction under the
status quo unconstitutional.
3
(Tape Change, HFC 94-47, Side 1).
Representative Hanley understood that for thirteen years,
PHS officers were treated as military and that they were
allowed to be absent, although this provision has changed.
Mr. Williams noted only twelve dividends were issued in
1991. The Department has been denying PHS officers the PFD.
Co-Chair Larson outlined the number of provisions which
would allow a person to be outside the State and continue to
receive their PFD check. He suggested that the Department
reexamine criteria used to determine if an individual should
be exempt or not. Co-Chair Larson indicated his concern
that a person could be absent on vacation and continue to
receive the PFD check.
Mr. Williams advised that the only instances where an
individual could have been absent for more than 180 days,
and that part of that time was for vacation, would be if
that person already had a fully allowable absence in
conjunction with that vacation. Co-Chair Larson stressed
that most persons, following their first year out of the
State, would be eligible for the PFD check. Mr. Williams
reiterated that there is a 180 day limitation in order to
qualify for fully allowable absences. He pointed that out
these decisions are determined by the Legislature and then
the Department implements the decisions.
Representative Parnell asked if the Supreme Court upholds
the lower court decision, would Merchant Mariners also be
eligible to receive the PFD. Mr. Williams replied that if
the Department loses at the Supreme Court level, under
current law, a regulation would be adopted making PHS a
fully allowable absence. There is no case before the
Department at this time regarding the Merchant Mariners.
Representative Foster MOVED to report HB 364 out of
Committee with individual recommendations and with the
accompanying fiscal note.
HB 364 was reported out of Committee with "no
recommendation" and with a zero fiscal note by the
Department of Revenue dated 2/14/94.
ADJOURNMENT
The meeting adjourned at 2:35 P.M.
HOUSE FINANCE COMMITTEE
March 3, 1994
1:30 P.M.
4
TAPE HFC 94 - 46, Side 2, #000 - end.
TAPE HFC 94 - 47, Side 1, #000 - #276.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee meeting
to order at 1:30 P.M.
PRESENT
Co-Chair Larson Representative Foster
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Hoffman was not present for the meeting.
ALSO PRESENT
Representative Jim Nordlund; Thomas Williams, Director,
Permanent Fund Division, Department of Revenue; Joe
Josephson, (testified via teleconference), Retired Senator,
Attorney, Anchorage; Dan Bair, (testified via
teleconference), Attorney, Anchorage.
SUMMARY
HB 260 An Act relating to the membership of the Alaska
Chilkat Bald Eagle Preserve Advisory Council.
HB 260 was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Revenue.
HB 364 An Act relating to allowable absences from the
state for purposes of eligibility for permanent
fund dividends; and providing for an effective
date.
HB 364 was reported out of Committee with "no
recommendation" and with a zero fiscal note by the
Department of Revenue dated 2/14/94.
HOUSE BILL 260
"An Act relating to the membership of the Alaska
Chilkat Bald Eagle Preserve Advisory Council."
Representative Grussendorf MOVED to report HB 260 out of
Committee with individual recommendations and with the
5
accompanying fiscal note.
HB 260 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
of Revenue.
HOUSE BILL 364
"An Act relating to allowable absences from the state
for purposes of eligibility for permanent fund
dividends; and providing for an effective date."
REPRESENTATIVE JIM NORDLUND stated that HB 364 proposes to
add two additional allowable absences to the definition of a
state resident for the purposes of determining eligibility
for permanent fund dividends. Those exemptions would be
service in the United States Merchant Marines and service in
the commissioned corps of the United States Public Health
Service (PHS).
He believed that both of the circumstances are substantially
similar to the already existing exemption for military
service and that they should be granted the same exemption
status. Under federal law, the PHS Commissioned Corps are
designated as one of the seven "uniformed services" of the
Armed Forces. The rank structure is identical or similar to
that of the US Navy. PHS officers wear military uniforms
and are issued military ID cards. They also receive the
same pay and allowances, medical and dental care, Veteran's
Administration benefits, life insurance, and voting rights
as other branches of the Armed Forces. They are subject to
military flight, base and exchange privileges and they are
subject to the same obligations.
Currently, there are a total of 532 active duty PHS officers
who claim Alaska residence. Of that total, 191 are assigned
to duty stations outside Alaska.
Representative Nordlund added that the United States
Merchant Marines are overseen by the maritime Administration
(MARAD). MARAD is charged by the President of the United
States with the responsibility of developing and maintaining
a merchant marine capable of meeting America's defense and
commercial trade requirement.
Representative Nordlund stated that there has been a
superior court decision issued which applies to this
legislation. The court ruled that Public Health Service
employees are treated the same as military and should also
be eligible for the Permanent Fund Dividend (PFD).
THOMAS WILLIAMS, DIRECTOR, PERMANENT FUND DIVISION,
6
DEPARTMENT OF REVENUE, stated that the Division has received
from the Public Health Service, a list of individuals who
have claimed Alaska residency. He added that 625
individuals are claiming Alaska residency as of December,
1992. Of those, 124 were no longer in active duty in the
Public Health Service and there are 200 who are claiming
Alaska residency who are stationed outside the State.
Mr. Williams pointed out that under the current allowable
absence provision, the Commissioner has the authority to add
allowable absences as authorized by the Legislature. The
Commissioner has to date, declined to add merchant mariners
or PHS officers. He added, through the court case, the
plaintiffs are asking for the same treatment as the military
receives.
Mr. Williams discussed the status of individuals serving in
the Merchant Marines. Current statutes allow an individual
to maintain an eligibility period for the dividend up to
half of that period being one hundred eighty days and they
can work a temporary job during that time.
Representative Hanley asked if the International Guard
personnel were to receive the PFD. Mr. Williams stated,
that they are on active duty and are considered armed
forces. Representative Hanley remarked that Merchant
Marines are often employed by private companies and he felt
they should be designated by a different class.
Discussion followed among Committee members regarding the
number of active duty PHS officers connected with Alaska and
the similarities between PHS officers and the Armed Service
Officers. Representative Therriault stated that the
permanent fund dividend should be available for those
persons who are residents of the State and who live in
Alaska.
JOE JOSEPHSON, (TESTIFIED VIA TELECONFERENCE), RETIRED
SENATOR, ATTORNEY, ANCHORAGE, spoke in support of the
legislation. He stated that he represented the plaintiff,
reiterating that PHS officers receive essentially all
benefits accorded military members. They are subject to
analogous obligations. The PHS Commissioned Corps is
distinguishable simply because it's purpose differs from
that of the other Federal Uniformed Services. He referenced
a case regarding Captain McCarthy, stating that to date one
superior court judge has held the distinction under the
status quo unconstitutional.
(Tape Change, HFC 94-47, Side 1).
Representative Hanley understood that for thirteen years,
7
PHS officers were treated as military and that they were
allowed to be absent, although this provision has changed.
Mr. Williams noted only twelve dividends were issued in
1991. The Department has been denying PHS officers the PFD.
Co-Chair Larson outlined the number of provisions which
would allow a person to be outside the State and continue to
receive their PFD check. He suggested that the Department
reexamine criteria used to determine if an individual should
be exempt or not. Co-Chair Larson indicated his concern
that a person could be absent on vacation and continue to
receive the PFD check.
Mr. Williams advised that the only instances where an
individual could have been absent for more than 180 days,
and that part of that time was for vacation, would be if
that person already had a fully allowable absence in
conjunction with that vacation. Co-Chair Larson stressed
that most persons, following their first year out of the
State, would be eligible for the PFD check. Mr. Williams
reiterated that there is a 180 day limitation in order to
qualify for fully allowable absences. He pointed that out
these decisions are determined by the Legislature and then
the Department implements the decisions.
Representative Parnell asked if the Supreme Court upholds
the lower court decision, would Merchant Mariners also be
eligible to receive the PFD. Mr. Williams replied that if
the Department loses at the Supreme Court level, under
current law, a regulation would be adopted making PHS a
fully allowable absence. There is no case before the
Department at this time regarding the Merchant Mariners.
Representative Foster MOVED to report HB 364 out of
Committee with individual recommendations and with the
accompanying fiscal note.
HB 364 was reported out of Committee with "no
recommendation" and with a zero fiscal note by the
Department of Revenue dated 2/14/94.
ADJOURNMENT
The meeting adjourned at 2:35 P.M.
8
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