Legislature(1993 - 1994)

03/23/1994 01:15 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 392 - PERMANENT FUND DIVIDEND PROGRAM                                     
  Number 459                                                                   
  CHAIRMAN PORTER introduced discussion on HB 392, Permanent                   
  Fund Dividend Program and welcomed Richard Vitale from Rep.                  
  Parnell's office.                                                            
  Number 462                                                                   
  392, testified in support of that bill.  [Chronic background                 
  noise diminishes sound quality.]  Mr. Vitale described HB
  392 as a bill his office had been working on in cooperation                  
  with the Permanent Fund Dividend Division of the Department                  
  of Revenue at their request to address needs that have                       
  arisen over the years.  Mr. Vitale said the bill was divided                 
  in three parts:  (1) to address a recent court case                          
  nullifying the piggyback rule and affecting about 1600                       
  Alaskans' dividends for the past two years; (2) to roll over                 
  into statute regulations which currently exist; and (3) to                   
  address loopholes.  He noted that Tom Williams of the                        
  Permanent Fund Division was present to respond to questions.                 
  Number 489                                                                   
  REP. DAVIDSON:  "Which are the loopholes that we're going to                 
  be dealing with and who's going to be on our back if we                      
  close them?"                                                                 
  Number 496                                                                   
  DEPARTMENT OF REVENUE, testified in support of HB 392.  He                   
  said there were a variety of loopholes as well as areas                      
  requiring "cleaning up."  Mr. Williams discussed in detail a                 
  loophole in the provision allowing a child born out of state                 
  in the first two years of its life to remain eligible for                    
  the dividend, even though the child has never been in the                    
  MR. WILLIAMS made reference to the situation of individuals                  
  who have received suspended impositions of sentences who are                 
  currently permanently banned from future participation in                    
  the program.  He also discussed the impact of felony                         
  convictions of PFDs.                                                         
  MR. WILLIAMS discussed the question of limiting or                           
  prohibiting assignments of PFDs, and if permitted, under                     
  what circumstances, to individual parties or government                      
  agencies.  He described an amendment clarifying the language                 
  in regulating government agency or court ordered restitution                 
  with regard to PFDs.                                                         
  CHAIRMAN PORTER asked if there were further questions of Mr.                 
  Williams or Mr. Vitale.  Chairman Porter referred the                        
  committee to Amendment #1 and recognized Rep. Kott, who                      
  moved Amendment #1.  Rep. Kott moved Amendment #1 and began                  
  to describe its intent, which was to address the needs and                   
  rights of Alaskans obliged to be out of state on excused                     
  absences, such as military personnel, who nevertheless stood                 
  to lose their PFDs after five years.  He rescinded the                       
  motion at Chairman Porter's request, however, until another                  
  amendment could be discussed first.                                          
  CHAIRMAN PORTER:  "And we will make yours Amendment #2.  I'm                 
  taking this on faith.  You have in front of you another                      
  amendment that is not numbered.  It says `Alaska Department                  
  of Revenue, suggested language.'  Would you mark that                        
  Amendment #1, please.  Tom, this is the one that you've just                 
  MR. WILLIAMS:  "Yes, that's correct, and that's requested by                 
  the court system."                                                           
  Number 620                                                                   
  REP. DAVIDSON:  "I would move Amendment #1, and ask for                      
  unanimous consent."                                                          
  CHAIRMAN PORTER:  "Amendment #1 has been moved.  Is there                    
  discussion?  Is there objection?"  There being no further                    
  discussion or objection, Amendment #1 of HB 392 was adopted                  
  by the committee.                                                            
  Number 625                                                                   
  REP. KOTT:  "I'll move Amendment #2."   At Chairman Porter's                 
  request, Rep. Kott went on to reiterate the scope of this                    
  amendment.  He explained that the amendment would eliminate                  
  the five year rule limit for individuals outside on                          
  allowable absences.                                                          
  REP. DAVIDSON:  "Mr. Chairman, I speak against the                           
  amendment.  I think, if we really want to solve this problem                 
  of who gets a dividend, I think we have to get tough.  And                   
  getting tough means that you draw the line, and I think that                 
  Alaska permanent fund dividends should go to people who                      
  reside in Alaska.  And for purposes of this Act, it seems to                 
  me a resident should be defined as one who spends not more                   
  than ninety days outside the state of Alaska in any given                    
  calendar year.  So, while I certainly understand the need                    
  for the group of people of which Rep. Kott speaks, I think                   
  you still have to draw the line somewhere.  And I think this                 
  one goes too far."                                                           
  Number 646                                                                   
  REP. KOTT:  "In response to the way the bill is currently                    
  written, then we are now discriminating against two classes                  
  of individuals, which I think would be unconstitutional.                     
  Because we have a group that was out there, that will, under                 
  the provisions of the committee substitute of State Affairs,                 
  continue to receive that for five years, and now, what you                   
  have suggested, we're going to cut everybody off, maintain                   
  that if you're not living in the state, then you don't get                   
  it.  In that sense, the current form that we have here in                    
  State Affairs, allows for a person to be outside for five                    
  years.  So, I'm not sure, if you have an amendment to the                    
  amendment, or you're just addressing the provision where we                  
  would draw the line."                                                        
  REP. DAVIDSON:  "I would like to hear what the agency has to                 
  say about this amendment."                                                   
  CHAIRMAN PORTER:  "Tom, for perspective, is it a fair                        
  characterization that Amendment #2 would return us to the                    
  status quo?"                                                                 
  MR. WILLIAMS:  "Yes, it would return us to the status quo.                   
  The language that is proposed to be deleted from this                        
  amendment was not included in the original bill, and what                    
  the original bill would have done would basically have                       
  maintained the status quo.  The language that is looked to                   
  be deleted was added by the House State Affairs Committee.                   
  REP. DAVIDSON:  "So, a question then to Rep. Kott:  the                      
  intent then was to, in fact, in State Affairs, to cut off                    
  these individuals, is that right?"                                           
  Number 670                                                                   
  REP. KOTT:  "That is the intent of the amendment to the                      
  original bill, the committee substitute of State Affairs                     
  basically established that after five years you wouldn't                     
  receive it.  I think we would perhaps be facing a                            
  constitutional issue, however, if we kept this particular                    
  provision in there, beyond some other considerations and                     
  concerns I have with it."                                                    
  Number 680                                                                   
  REP. NORDLUND:  "I am just wondering what the sponsor thinks                 
  of this amendment."                                                          
  Number 693                                                                   
  MR. PARNELL:  "The sponsor is in support of the amendment to                 
  withdraw the five-year clause out of the bill, although                      
  there is, definitely, concern about allowable absences and                   
  how to address the problem of abuses.  It's not the feeling                  
  that this does a good job of addressing it.  It gets some of                 
  those that may be abusing it; and some of those who don't                    
  abuse - students, if they're out on allowable absences,                      
  would lose their PFDs that really have intent to come back -                 
  and I think there's probably other ideas that would better                   
  address the problem of allowable absences.  The second point                 
  would be, we don't feel this is the proper vehicle to make a                 
  major policy change in the department.  This was viewed as a                 
  bill trying to clean up a lot of the loose ends that have                    
  occurred over the years and we're thinking of bringing on a                  
  major policy decision here into a bill that wasn't                           
  addressing anything like that before.  We prefer to see a 14                 
  page document not become a longer document, and so, we                       
  support this amendment."                                                     
  Number 697                                                                   
  REP. DAVIDSON asked Rep. Kott, "Was there discussion in                      
  State Affairs that if the class of person you're talking                     
  about, a person out on an excused absence due to service to                  
  the nation, I thought it was possible for at least every                     
  three years, those people get rotated and have an                            
  opportunity to go to their home state.  Is that not                          
  REP. KOTT:  "There were very few discussions involving this                  
  particular issue, but I will also say, as a former military                  
  member, that you can apply to come back to the state as                      
  often as you like, [but] during your military career there                   
  is no guarantee.... Just because you say, `I want to go to                   
  Alaska,' is no guarantee that you're going to get there."                    
  REP. DAVIDSON:  "But there's still, there are flights that                   
  come up here from all over, right?"                                          
  REP. KOTT:  "That's true.  We still have the requirement to                  
  come back to the state every two years.  That's still a                      
  provision.  But what I'm suggesting is that after five                       
  years, we're now segregating Alaskan citizens.  If you live                  
  in state, we'll give it to you.  If you're outside the                       
  state, we're not going to give it to you.  And I think we've                 
  got a constitutional problem there.  If we're going to                       
  segregate those classes in that category in that particular                  
  way.  We either treat 'em all the same, or -- "                              
  Number 720                                                                   
  REP. DAVIDSON:  "I'll withdraw my objection, then Mr.                        
  CHAIRMAN PORTER:  "Is there any further discussion of                        
  Amendment #2?  Is there any other objection?"  There being                   
  no further discussion or objection, Amendment #2 of HB 392                   
  was adopted by the committee.                                                
  Number 729                                                                   
  REP. NORDLUND asked Mr. Williams, "What this bill will do is                 
  take out the ability of the commissioner to determine what                   
  are allowable exemptions? "                                                  
  MR. WILLIAMS:  "Yes, that would be one effect of the bill.                   
  Because basically all of the currently allowable absences                    
  would be moved into statute and discretionary [indisc.]."                    
  REP. NORDLUND:  "Is that just a hot potato that you didn't                   
  want to have to handle anymore?  I'm just wondering...it                     
  seems to me like there might be situations, like the Olympic                 
  athletes one that came up that seemed reasonable, to allow                   
  an exemption, that you won't have that authority any more                    
  where you have to go back to the legislature to do that."                    
  MR. WILLIAMS:  "You must remember that when the original                     
  dividend program was enacted, there were five or six                         
  allowable absences listed there.  I think that the                           
  legislature said, well, we really don't know what all might                  
  come up.  I think the dividend program has matured                           
  sufficiently in the last 12 years to really consider a whole                 
  variety of allowable absences.  You're right that the                        
  commissioner did adopt, has recently adopted one other                       
  allowable absence, but I think as a practical matter, those                  
  are policy issues with regard to the expansion of allowable                  
  absences that are properly addressed by the legislature."                    
  Number 747                                                                   
  REP. KOTT made a motion for HB 392 to be moved out of                        
  Judiciary Committee with individual recommendations.                         
  CHAIRMAN PORTER:  "Is there further discussion?  Is there                    
  objection?"  There being no further discussion or objection,                 
  HB 392 was moved out of committee.                                           

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