Legislature(1993 - 1994)
03/23/1994 01:15 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 RICHARD VITALE, OFFICE OF REP. SEAN PARNELL, SPONSOR OF HB 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 TOM WILLIAMS, DIRECTOR, PERMANENT FUND DIVIDEND DIVISION, 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 state. 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 described?" 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 correct?" 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." 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.