Legislature(2001 - 2002)
02/28/2002 08:08 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.