Legislature(2001 - 2002)

02/28/2002 08:08 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 314-PFD ELIGIBILITY FOR PEACE CORP VOLUNTEERS                                                                              
                                                                                                                                
CHAIR  COGHILL  announced  that   the  first  matter  before  the                                                               
committee  would be  HOUSE  BILL  NO. 314,  "An  Act relating  to                                                               
service  in the  peace corps  as  an allowable  absence from  the                                                               
state for  purposes of eligibility for  permanent fund dividends;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
Number 0195                                                                                                                     
                                                                                                                                
REPRESENTATIVE LESIL  McGUIRE, Alaska  State Legislature,  one of                                                               
joint sponsors of  HB 314, explained that  she and Representative                                                               
Davies had  had similar  ideas and decided  to merge  their bills                                                               
for  the sake  of efficiency.   She  said Peace  Corps volunteers                                                               
provide a  valuable contribution  to society and  to peacekeeping                                                               
efforts.   Representative  McGuire explained  that much  like the                                                               
military, the Peace Corps is  fighting, but fighting to stabilize                                                               
water   systems  and   economies   and   to  accommodate   stable                                                               
democracies.   She made  reference to  President Bush's  call for                                                               
citizens  to   contribute  4,000  hours  of   volunteer  time  to                                                               
community  service.   She suggested  that Peace  Corps volunteers                                                               
fall  "right in  line" with  the current  list of  exemptions for                                                               
being  out  of state  [and  still  receiving the  permanent  fund                                                               
dividend (PFD)].                                                                                                                
                                                                                                                                
Number 0428                                                                                                                     
                                                                                                                                
REPRESENTATIVE   McGUIRE  referred   to   a  proposed   committee                                                               
substitute  (CS)  [version  22-LS1129\C,   Cook,  2/5/02].    She                                                               
proffered that  if the pool  of applicants is expanded,  it would                                                               
be logical to  talk about antifraud enforcement  mechanisms.  She                                                               
noted that she was told  by Larry Persily, Deputy Commissioner of                                                               
the Department of  Revenue, that there have been  cases of fraud,                                                               
and  that right  now there  is  no real  deterrent to  fraudulent                                                               
application for a  dividend.  She said it  is cost-prohibitive to                                                               
bring cases to  court.  She offered her belief  that the proposed                                                               
CS would  give the  department an  administrative remedy  to that                                                               
situation:   the standard  and finding would  still be  the same,                                                               
but  the department  would be  able to  issue a  forfeiture order                                                               
regarding a  dividend or  a civil  penalty itself,  without going                                                               
through the courts.                                                                                                             
                                                                                                                                
Number 0547                                                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE  explained that an individual  would still                                                               
have   the   right  to   an   appeal   under  the   new   design.                                                               
Representative  McGuire  expressed   her  appreciation  of  those                                                               
volunteers who  live "in abject poverty  in order to try  to help                                                               
people who are less fortunate than  us."  She said the bill would                                                               
make a  statement that  Alaska appreciates  that its  Peace Corps                                                               
volunteers  are  Alaskans who  want  to  come  back and  stay  in                                                               
Alaska.                                                                                                                         
                                                                                                                                
Number 0654                                                                                                                     
                                                                                                                                
REPRESENTATIVE JOHN  DAVIES, Alaska State  Legislature, testified                                                               
before the  committee as the other  prime sponsor of HB  314.  He                                                               
said  he only  wanted to  add two  points:   First, the  bill re-                                                               
establishes an  exemption that  was in the  law before.   Second,                                                               
Alaska  should  encourage  Peace  Corps service  because  of  the                                                               
educational  and self-improvement  aspects that  volunteers bring                                                               
back to Alaska after they serve.                                                                                                
                                                                                                                                
Number 0722                                                                                                                     
                                                                                                                                
REPRESENTATIVE  FATE  asked why  the  civil  fine for  fraud  was                                                               
reduced from $5,000  to $3,000.  He also asked  why the exemption                                                               
was removed in the first place.                                                                                                 
                                                                                                                                
REPRESENTATIVE McGUIRE  answered that  she thought  the reduction                                                               
in the fine was  so that the fine would not rise  to the level of                                                               
small claims court.                                                                                                             
                                                                                                                                
REPRESENTATIVE DAVIES said  he didn't know why  the exemption had                                                               
been removed  from statute.   He said  the House had  a "separate                                                               
bill on  this topic  that dealt  with a  whole other  issue," but                                                               
that when that bill went to  [the Senate], many of the exemptions                                                               
were  eliminated at  the end  of  the session,  with very  little                                                               
comment.                                                                                                                        
                                                                                                                                
Number 0843                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  said she'd  read something at  the national                                                               
level  requesting another  group of  volunteers.   She asked  the                                                               
sponsors if they had more insight on the matter.                                                                                
                                                                                                                                
REPRESENTATIVE DAVIES  said President  George W. Bush  was trying                                                               
to  encourage volunteerism  in general  and had  cited the  Peace                                                               
Corps as  an example.  He  said the President then  was expanding                                                               
the  AmeriCorps operation  -  with a  slightly  different name  -                                                               
within the United States.                                                                                                       
                                                                                                                                
REPRESENTATIVE  JAMES asked  if  the language  would  have to  be                                                               
changed in  the near future  in order to include  participants in                                                               
other volunteer programs.                                                                                                       
                                                                                                                                
REPRESENTATIVE  McGUIRE made  the  point that  volunteers in  the                                                               
AmeriCorps program "don't have to go outside for their service."                                                                
                                                                                                                                
REPRESENTATIVE   DAVIES  said   there   was   the  intention   of                                                               
encouraging people interested  in AmeriCorps to do  their work in                                                               
Alaska.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  McGUIRE  told the  committee  that  in the  Peace                                                               
Corps, a  person is required to  leave the country for  two years                                                               
and there is not the  option of maintaining a physical residency.                                                               
She said it was her intent to "keep it really limited."                                                                         
                                                                                                                                
Number 1036                                                                                                                     
                                                                                                                                
LINDA WELLS testified  via teleconference.  She said  her son and                                                               
daughter-in-law are  currently in Thailand with  the Peace Corps;                                                               
they make  $139 a  month as  a stipend.   She told  the committee                                                               
that  the couple  plan  to return  to Alaska  and  use their  PFD                                                               
checks as a down payment on a  house.  She said not allowing them                                                               
to receive their  checks "really puts a crimp in  their plans for                                                               
their future."  Ms. Wells  reported that the couple just finished                                                               
their first year in Thailand,  where they train teachers to teach                                                               
English.   She  said  the people  in Thailand  love  her son  and                                                               
daughter-in-law,  as   well  as  what   they  are  doing.     She                                                               
characterized  their  work  as  an  excellent  representation  of                                                               
America and Alaska.   She said she could not  understand why they                                                               
were not being supported.                                                                                                       
                                                                                                                                
Number 1185                                                                                                                     
                                                                                                                                
TRACY  TOWNSEND  testified  via  teleconference.    He  told  the                                                               
committee  he  was in  the  Peace  Corps  from  1965 to  1967  in                                                               
Malaysia.   He assured  the committee that  people don't  go into                                                               
the Peace Corps to make money.   He agreed with earlier testimony                                                               
and added  that [Peace  Corps volunteers] should  be put  back on                                                               
the [exemption] list.                                                                                                           
                                                                                                                                
Number 1252                                                                                                                     
                                                                                                                                
RUSSELL  WALKER testified  via teleconference.   He  said he  has                                                               
lived in  Alaska for 23 years  and raised his two  children here.                                                               
He  said he  had just  returned from  serving in  Africa for  two                                                               
years and six months,  but it was more like two  and a half years                                                               
of service  when all  the training  and travel  is included.   He                                                               
said he'd  lost four  dividend checks during  his service  in the                                                               
Peace Corps.   Mr. Walker gave several examples of  how the Peace                                                               
Corps  places people  directly in  the everyday  life of  another                                                               
culture and country.                                                                                                            
                                                                                                                                
MR. WALKER  told the committee  it was  still unclear to  him why                                                               
Peace Corps  service was  dropped as an  allowable absence  for a                                                               
dividend  check.   He said  members of  the military  as well  as                                                               
members of  their families are  entitled to their checks,  and it                                                               
isn't fair that Peace Corps  people straight out of college, with                                                               
all of their  educational debt, are denied a dividend  check.  He                                                               
said  the Peace  Corps is  a great  representation of  the United                                                               
States and  that it  is in  the best interest  of Alaska  and the                                                               
United States to reinstate the exemption.                                                                                       
                                                                                                                                
Number 1600                                                                                                                     
                                                                                                                                
KAREN  MASKARINEC testified  via  teleconference.   She told  the                                                               
committee that  her daughter, Gwyneth  Crabtree (ph), is  a Peace                                                               
Corps  Volunteer  in  Moldova.     Ms.  Maskarinec  told  of  her                                                               
daughter's long-held dream  of joining the Peace  Corps, and told                                                               
how her  daughter had  helped to  establish a  connection between                                                               
some people in  Moldova and their counterparts  in Alaska through                                                               
establishing  pen  pals.    She quoted  President  Bush,  in  his                                                               
appointment of the most recent head  of the Peace Corps two weeks                                                               
prior:                                                                                                                          
                                                                                                                                
     America has a new kind of  force today.  ... We are not                                                                    
     only  a great  country,  a great  economic engine,  and                                                                    
     obviously a great military - we  are a great idea.  The                                                                    
     greatness of  the country is  in the values  we believe                                                                    
     in:  freedom and hope  and opportunity.  I believe that                                                                    
     Americans  are still  willing to  sacrifice for  causes                                                                    
     greater  than themselves,  and the  Peace Corps  offers                                                                    
     such a fantastic opportunity to do so.                                                                                     
                                                                                                                                
MS.  MASKARINEC said  this bill  would  give Alaska  a chance  to                                                               
support its Peace Corps volunteers.                                                                                             
                                                                                                                                
Number 1893                                                                                                                     
                                                                                                                                
ANN  HARRISON  testified  via  teleconference.    She  urged  the                                                               
committee to reinstate the exemption  for Peace Corps volunteers,                                                               
who enrich  the communities they  go to and the  communities they                                                               
come home to, here in Alaska.                                                                                                   
                                                                                                                                
Number 1878                                                                                                                     
                                                                                                                                
JOE    SULLIVAN,   Peace    Corps   Volunteer,    testified   via                                                               
teleconference.   He  said  he had  volunteered  in Zambia  after                                                               
working for  the Alaska Department  of Fish  & Game (ADF&G).   He                                                               
said he  has a Ph.D.  in fisheries,  and that teaching  people to                                                               
raise fish was  a lifelong dream of his.   He recounted that when                                                               
he was in Zambia, he lost  a portion of his retirement from ADF&G                                                               
as well as his permanent fund [dividend].                                                                                       
                                                                                                                                
MR.  SULLIVAN  agreed with  a  previous  speaker that  volunteers                                                               
represent the  U.S. and Alaska  as well.   He said  Alaska should                                                               
not punish  its citizens  who go overseas  to help  others, which                                                               
taking  their PFDs  away does.   He  said there  are Alaskans  in                                                               
Zambia right now, like Adrienne  Score (ph), who will continue to                                                               
do what is right, whether they  get their dividend checks or not.                                                               
Mr.  Sullivan  concluded  by  saying   he  didn't  know  why  the                                                               
exclusion was taken away in the  first place and that he supports                                                               
the bill.                                                                                                                       
                                                                                                                                
Number 2086                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE  noted that it  was brought to  his attention                                                               
that a claim  under small claims court  can be up to  $7,500.  He                                                               
asked why  the penalty for  dividend application fraud  should be                                                               
reduced to $3,000.                                                                                                              
                                                                                                                                
Number 2152                                                                                                                     
                                                                                                                                
NANCI   JONES,  Director,   Permanent  Fund   Dividend  Division,                                                               
Department of  Revenue, answered  that the  reason was  not about                                                               
small  claims  court.   Rather,  it  was  to make  a  delineation                                                               
between a civil  and criminal action.  She  said criminal actions                                                               
begin from  a $5,000  floor.   This was lowered  to $3,000  to be                                                               
sure that it was a civil action.                                                                                                
                                                                                                                                
Number 2173                                                                                                                     
                                                                                                                                
DAN  BRANCH,  Assistant  Attorney  General,  Commercial  Section,                                                               
Civil Division (Juneau), Department  of Law, added, "We're trying                                                               
to avoid a situation where a  court finds that we have to provide                                                               
a public  defender and  a jury  trial for  somebody who  wants to                                                               
fight the penalties imposed under this section."                                                                                
                                                                                                                                
REPRESENTATIVE FATE said he appreciated  the explanation in times                                                               
when the state is trying to save money.                                                                                         
                                                                                                                                
Number 2205                                                                                                                     
                                                                                                                                
CHAIR COGHILL asked  why, in Section 3, the  language was changed                                                               
from January 2 to January 1.                                                                                                    
                                                                                                                                
MS. JONES said  this change relates to when a  person dies during                                                               
the qualifying year, January 2  through March 31.  [Currently] if                                                               
someone dies on  the first, that individual isn't  eligible.  She                                                               
explained that [the division] was trying  to make it so that if a                                                               
person dies in  the new year - January 1  through the application                                                               
period - then that person's estate  would be able to file for his                                                               
or her  dividend.  Therefore, the  desire is to move  the date to                                                               
January 1.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  WILSON   returned  to  the  $3,000   penalty  for                                                               
dividend application  fraud.  She  asked:   If the concern  is to                                                               
not  have [the  penalty]  be  over $5,000,  then  why didn't  the                                                               
language specify $4,500?   She suggested the  message that should                                                               
be sent is that [dividend application fraud] is serious.                                                                        
                                                                                                                                
MS.  JONES replied  that $3,000  was merely  the number  that was                                                               
chosen.    She  acknowledged  that the  number  could  have  been                                                               
$4999.99, but  said [the division]  didn't want to be  that close                                                               
[to $5,000].                                                                                                                    
                                                                                                                                
MR. BRANCH pointed out that  an individual [who attempts dividend                                                               
application fraud]  would face the  $3,000 fine and run  the risk                                                               
of losing  the next  five dividends,  plus the  current dividend.                                                               
Therefore,   the    $3,000   penalty   is    quite   significant.                                                               
Furthermore,  if  the  court  feels  the  overall  penalties  are                                                               
criminal in  nature, the court  will specify that  the individual                                                               
has a  right to  a jury trial,  and to a  public defender  at the                                                               
state's expense if  the defendant can't afford an  attorney.  Mr.                                                               
Branch explained, "It's  not a magic number that  the court does;                                                               
[it's]  just that  they  apply a  test.   And  in  the past,  ...                                                               
sometimes  things ...  $5,000 and  above  have been  found to  be                                                               
criminal."                                                                                                                      
                                                                                                                                
REPRESENTATIVE  WILSON inquired  as  to whether  the court  would                                                               
question $4,000.                                                                                                                
                                                                                                                                
MR. BRANCH noted that in the  past, the court has found less than                                                               
$3,000 to  be criminal.   He commented that [the  division feels]                                                               
it would  be easier at $3,000.   "The higher [the  penalty] goes,                                                               
the greater the risk," he pointed out.                                                                                          
                                                                                                                                
Number 2455                                                                                                                     
                                                                                                                                
REPRESENTATIVE   JAMES  asked   if   the  court's   determination                                                               
regarding whether  the individual  should have a  public defender                                                               
or the opportunity for a jury trial  is based on the facts of the                                                               
case rather than on the fines.                                                                                                  
                                                                                                                                
MR. BRANCH  answered that it is  a matter of the  penalty itself.                                                               
If the  court views the penalty  as criminal in nature,  then the                                                               
constitutional right  to a  jury trial and  to a  public defender                                                               
would apply.                                                                                                                    
                                                                                                                                
REPRESENTATIVE JAMES asked if that level is usually $5,000.                                                                     
                                                                                                                                
MR. BRANCH  said in  the past  the courts have  used $5,000  as a                                                               
cutoff, although the  courts have found lesser  [penalties] to be                                                               
criminal.  He  noted that adding six PFDs to  $3,000 could add up                                                               
to more  than $10,000 in  punishment.  He  said it was  felt that                                                               
$3,000 "would be more defensible."                                                                                              
                                                                                                                                
REPRESENTATIVE JAMES said she understood  that argument and could                                                               
support the $3,000 as rational, based on collection expenses.                                                                   
                                                                                                                                
Number 2564                                                                                                                     
                                                                                                                                
REPRESENTATIVE FATE  moved to  report CSHB  314 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
note.                                                                                                                           
                                                                                                                                
CHAIR  COGHILL  acknowledged  that  the  committee  had  not  yet                                                               
adopted  Version C  as the  working document.   He  asked whether                                                               
there  was  any objection  to  adopting  Version C  [22-LS1129\C,                                                               
Cook, 2/5/02].  There being no objection, it was so ordered.                                                                    
                                                                                                                                
CHAIR COGHILL asked if there  was any objection to reporting CSHB                                                               
314, version  22-LS1129\C, Cook,  2/5/02, from committee.   There                                                               
being  no objection,  CSHB 314(STA)  was moved  out of  the House                                                               
State Affairs Standing Committee.                                                                                               

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