Legislature(2019 - 2020)GRUENBERG 120
03/20/2020 02:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB190 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 253 | TELECONFERENCED | |
| += | HB 274 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 190 | TELECONFERENCED | |
HB 190-PFD ALLOWABLE ABSENCES
2:11:09 PM
CO-CHAIR KREISS-TOMKINS announced that the only order of
business would be HOUSE BILL NO. 190, "An Act relating to
allowable absences for a permanent fund dividend; and providing
for an effective date."
2:11:57 PM
CO-CHAIR FIELDS moved to adopt the committee substitute (CS) for
HB 190, Version 31-LS1273\S, Nauman, 3/19/20, as the working
document.
REPRESENTATIVE THOMPSON objected.
CO-CHAIR KREISS-TOMKINS referred to the document, entitled "HB
190 Explanation of Changes - Ver. A to Ver. S," included in the
committee packet. Under Version S, [Sections 3 and 4], there
would be a 120-day limit on the number of out-of-state days
allowable per year for someone receiving a permanent fund
dividend (PFD). Under Section 1 of Version S, an out-of-state
person receiving a PFD under an eligible absence, would be
required to return to Alaska every two years for seven
consecutive days, instead of 72 hours; as per Section 4, the
person would be required to be physically present in Alaska
every five years for 90 cumulative days, rather than 30
cumulative days.
REPRESENTATIVE THOMPSON offered the following scenario: someone
in the army is stationed out of state and is eligible for the
PFD; the person owns a house in Fairbanks and his/her children
plan to attend the University of Alaska Fairbanks; the family
needs their PFDs. He maintained that requiring the military
person to return to Alaska for seven days is unfair to military
personnel.
2:15:20 PM
REPRESENTATIVE THOMPSON continued by asserting that reducing the
allowable absence days from 180 to 120 for settling an estate
and for "snowbird" travel is also unfair.
REPRESENTATIVE THOMPSON referred to Section 4 of Version S,
which would change the number of allowable absence days in each
of the five preceding qualifying years from 180 to 120. He
asked whether under Version S, someone who had been receiving a
PFD for the five preceding years would now be denied a PFD
because he/she had been following the 180-day allowance rule for
the five preceding years.
REPRESENTATIVE SHAW clarified the question: Would a person, who
has been absent for 170 days each year for the previous three
years, have that count against him/her for receiving a PFD for
the current year?
CO-CHAIR KREISS-TOMKINS answered that Section 4 refers to people
who are out of state for a large part of the year and qualify
for the PFD under eligible absences. The statute requires a
person, who is out of state for more than half the year for many
years, be physically present in Alaska a certain amount of time
after five years to still qualify for a PFD under his/her
eligible absence. He expressed his belief that the answer to
Representative Thompson's question is no, so long as every five
years the person spends 90 cumulative days in Alaska and seven
consecutive days in Alaska every two years.
2:20:27 PM
EMILY NAUMAN, Deputy Director, Legislative Legal Services,
relayed that the answer to the question depends in part on the
Department of Revenue (DOR) interpretation of the change in
statute. She stated that for someone who was absent from Alaska
180 days [per year] for the past four years, the 120-day
standard under Version S would make that person ineligible. She
expressed her belief that such would be the likely
interpretation of DOR. She suggested that Version S could be
amended to give people in that situation a grace period to
adjust to the 120-day standard. She stated that under Section 4
of Version S, subparagraph (d), the 120-day absence represents a
presumption that the individual is no longer a state resident;
the individual could rebut that presumption by demonstrating
physical presence in the state for 90 [cumulative] days during
the past five years and meeting the state resident
qualifications as defined by AS 43.23.295(7).
CO-CHAIR KREISS-TOMKINS added that in answer to Representative
Thompson's question, the person could still qualify for a PFD as
long as he/she satisfied the requirement of [providing evidence
of being in Alaska] 90 cumulative days every five years and
seven consecutive days every two years. If the person failed to
meet that standard, then he/she would be ineligible.
MS. NAUMAN concurred. She stated that AS 43.23.008(d) could be
considered an additional paperwork trigger; it constitutes a
point at which the PFD Division notices the person's absence and
requires additional proof of residency using additional
standards.
2:24:06 PM
REPRESENTATIVE THOMPSON asked how changing the requirement from
30 days to 90 days under Section 4 of Version S would affect
people receiving PFDs under the current law. He asked, "Would
they now be ineligible for PFDs?
CO-CHAIR KREISS-TOMKINS answered yes. He explained that under
the current provision, an out-of-state Alaskan who qualifies for
a PFD under the eligible absences, proves residency and intent
to live in Alaska by fulfilling the requirements of 72 hours in
Alaska every two years and 30 days in Alaska every five years.
He offered that those requirements are very lenient. He
maintained that the new requirements under Version S are more
appropriate.
2:25:31 PM
REPRESENTATIVE HOPKINS asked whether Version S, if passed, would
impact those applying this year for the PFD distributed October
2020.
MS. NAUMAN explained that the applicability language on page 4,
lines 29-30, states that the changes under Version S would apply
to qualification for a 2020 PFD paid out in 2021.
REPRESENTATIVE HOPKINS suggested that changing line 30 to
specify 2022 instead of 2021 would allow people to plan for
their absences in 2021.
MS. NAUMAN replied, that's correct.
2:27:20 PM
REPRESENTATIVE THOMPSON reiterated the scenario: a military
member is registered to vote in Fairbanks, owns a house in
Fairbanks, pays property tax in Fairbanks, plans to retire to
Fairbanks, and is close to retirement. He maintained that
requiring that person to return to Alaska for seven consecutive
days is burdensome. He acknowledged that there are many
military personnel with no intention of returning to Alaska who
continue to collect PFDs for their families.
CO-CHAIR KREISS-TOMKINS stated that he shared Representative
Thompson's concern; however, under Version S, people would be
required to demonstrate that they are "serious about Alaska" by
being physically present for one week every two years.
2:30:08 PM
ANNE WESKE, Director, Permanent Fund Dividend (PFD) Division,
Department of Revenue (DOR), concurred with Representative
Kreiss-Tomkins's assessment. She added that the changes to
statute under Version S would apply to individuals gone from
Alaska for over 358 days per year; this applies to a small group
of applicants - about 825 per year.
2:31:37 PM
REPRESENTATIVE THOMPSON offered that settling the estate of a
deceased family member could possibly take longer than 120 days.
He asked whether there is any leeway for that period.
CO-CHAIR KREISS-TOMKINS expressed his understanding that
settling a family estate constitutes an eligible absence under
the statute; therefore, under Version S, a person settling a
family estate would be allowed to be absent an additional 120
days over the [120] days allowed. He maintained that "allowable
absences don't count against your quota of time you have to
spend in Alaska."
MS. WESKE concurred.
2:34:05 PM
REPRESENTATIVE VANCE asked for clarification of the maritime
registered apprenticeship program under Section 3(a)(17) of
Version S.
CO-CHAIR FIELDS explained that registered apprenticeship
programs exist under the National Apprenticeship Act [1937],
also known as the Fitzgerald Act, which has governed post-
secondary industry-funded training programs since 1937. Alaska
has some of the most robust apprenticeship programs in the
country. Under the maritime apprenticeship program, Alaskans
attend the Paul Hall Center for Maritime Training and Education
in Maryland for classroom training; on-the-job training takes
place in waters all over the world; the training is funded by
the shipping industry. He relayed that in 2014, DOR promulgated
regulations that in effect precluded participants in the
industry-funded training programs from receiving PFDs, because
those programs are not subject to receive financial aid.
Participants of tuition-based training institutions are eligible
to receive PFDs.
CO-CHAIR FIELDS mentioned the support of Alaska's U.S.
Representative Don Young and former U.S. Senator Ted Stevens,
who encouraged and supported recruiting Alaskans to work in the
maritime industry. He cited AS 43.23.008(a), which read in
part:
(a) Subject to (b) and (d) of this section, an
otherwise eligible individual who is absent from the
state during the qualifying year remains eligible for
a current year permanent fund dividend if the
individual was absent
(1) receiving secondary or postsecondary
education on a full-time basis;
(2) receiving vocational, professional, or other
specific education on a full-time basis for which, as
determined by the Alaska Commission on Postsecondary
Education, a comparable program is not reasonably
available in the state;
CO-CHAIR FIELDS pointed out that paragraph (2) is the basis for
the Alaska Commission on Postsecondary Education's (ACPE's)
determination that participants can only receive PFDs if the
training program receives financial aid. He emphasized that the
students should not be discriminated against because the
industry pays for the program.
2:38:59 PM
MS. WESKE relayed that the Division is working with the
Department of Law (DOL) to find a remedy to the situation
described. She maintained that the Paul Hall Center for
Maritime Training and Education in Maryland is a credible
school; however, the division must be careful not to give too
much latitude regarding eligible programs; the solution to the
issue may be to specify the maritime career path in statute.
CO-CHAIR FIELDS added that there was a time when the federal
government squandered money on for-profit training programs that
didn't have good outcomes. He stated that he didn't want to
encourage participants to go out of state and subsidize a for-
profit training program that was not connected to employment.
He maintained that the language in Version S specifically states
a "registered apprenticeship" program; under the federal
definition of apprenticeship, the program must be connected to
employment.
2:40:55 PM
REPRESENTATIVE HOPKINS asked how many Alaskans are in the
registered maritime apprenticeship program.
MS. WESKE responded that she cannot report the number, because
there is no specific data element with that information.
CO-CHAIR FIELDS offered that he believes that there are two
individuals.
2:41:50 PM
REPRESENTATIVE THOMPSON asked whether Version S should be
amended to address allowable absences by people displaced by
COVID-19 [a novel coronavirus disease].
CO-CHAIR KREISS-TOMKINS mentioned an upcoming amendment on that
issue.
CO-CHAIR FIELDS asked to what extent AS 43.23.008(a)(5),
"receiving continuous medical treatment," addresses the issue of
COVID-19.
MS. WESKE responded that unless a person has COVID-19, he/she
would not be eligible for a PFD under the allowable absences.
She stated that it is still early in the COVID-19 situation and
the division is open to suggestions.
2:43:58 PM
REPRESENTATIVE HOPKINS asked whether the division currently has
the authority to create a waiver for the COVID-19 [pandemic]
situation regarding an individual's inability to return to
Alaska.
MS. WESKE answered no.
REPRESENTATIVE VANCE asked the sponsor for comment on Version S.
2:44:56 PM
REPRESENTATIVE DAVE TALERICO, Alaska State Legislature,
expressed his appreciation for the concerns brought forth by
committee members, the proposed amendments, and committee
discussion. He acknowledged that the appropriateness of the
number of days allowed for absences has been a question for him
for many years. He offered that "stacking" absences does give
someone significant time out of state. He mentioned that he
supports the CS and the amendments.
2:49:02 PM
REPRESENTATIVE VANCE acknowledged that the statutory changes
under Version S would not be applicable until the deadline for
filing the 2020 PFD application but expressed a need for more
transition time for the sake of public awareness and future
travel arrangements.
CO-CHAIR KREISS-TOMKINS asked Ms. Weske whether she anticipates
any complications for transitioning under Version S, page 4,
lines 19-26.
MS. WESKE answered that adding in an adjustment period of one
calendar year would be reasonable. It would give individuals
more opportunity to plan.
2:52:54 PM
REPRESENTATIVE VANCE relayed that with the concerns offered
about military personnel returning for 7 days, she would like
input from the military as to the feasibility of fulfilling this
requirement.
MS. WESKE responded that the division attempts to be careful not
to require more time in Alaska than the average military person
receives in leave. She offered that 72 hours is an extremely
safe amount of time.
2:54:50 PM
REPRESENTATIVE HOPKINS asked whether Version S closes the
loophole which allows military families to be stationed out of
state, collect PFDs, but have no intention of returning to
Alaska.
MS. WESKE replied that under Version S, the individuals who do
the bare minimum - returning for 72 hours - would be eliminated
from the PFD rolls; a higher level of action would be required
for them to prove that Alaska is truly their home. Many
military members rent out their Alaska homes and come back
regularly to do maintenance. She clarified for Representative
Hopkins that currently if the military members do not return to
Alaska for 72 hours every two years, they would not qualify for
the PFD and their residency is broken. She stated that
currently there are some military members who return only for
the 72 hours or only for the 30 consecutive days.
2:57:47 PM
CO-CHAIR FIELDS asked what effect extending the 72 hours to
seven days would have on a military member, who is eligible by
virtue of the allowable absence stated under AS 43.23.008(a)(3),
which read:
(3) serving on active duty as a member of the armed
forces of the United States or accompanying, as that
individual's spouse, minor dependent, or disabled
dependent, an individual who is
(A) serving on active duty as a member of
the armed forces of the United States; and
(B) eligible for a current year dividend;
MS. WESKE suggested that the seven days adds another layer of
insurance that the individual will return to Alaska.
CO-CHAIR KREISS-TOMKINS responded that currently a person may
qualify for a PFD under the allowable absences; if the person is
absent year after year, a second layer of qualification is
required as proof - the 72-hour and 30-day provisions. The
second layer only applies to people collecting PFDs year after
year under an allowable absence while not physically present in
Alaska.
MS. NAUMAN concurred.
3:01:40 PM
REPRESENTATIVE VANCE referred to the 825 applicants to whom
Version S would apply and asked for the categories of allowable
absences of the group.
MS. WESKE answered that there are three main categories -
military, students, and those with medical concerns.
3:04:17 PM
REPRESENTATIVE THOMPSON withdrew his objection.
CO-CHAIR KREISS-TOMKINS objected. He commented that he is
committed to providing more information to address the concerns
and questions of the committee. He withdrew his objection.
There being no further objection, Version S was before the
committee as the working document.
[HB 190 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 190 Explanation of Changes ver A - ver S 3.20.20.pdf |
HSTA 3/20/2020 2:00:00 PM |
HB 190 |
| HB 190 Sectional Analysis ver S 3.20.20.pdf |
HSTA 3/20/2020 2:00:00 PM |
HB 190 |
| CS HB 190 Ver. S 3.20.20.pdf |
HSTA 3/20/2020 2:00:00 PM |
HB 190 |