Legislature(2005 - 2006)CAPITOL 106

03/29/2005 08:00 AM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Moved CSHB 183(STA) Out of Committee
Heard & Held
Scheduled But Not Heard
Scheduled But Not Heard
+ House State Affairs Draft Legislation Re: TELECONFERENCED
Bills Previously Heard/Scheduled
HB 201-PERM. FUND DIVIDEND APPS OF MILITARY                                                                                   
8:07:28 AM                                                                                                                    
CHAIR  SEATON announced  that  the first  order  of business  was                                                               
HOUSE BILL  NO. 201,  "An Act  relating to  an application  for a                                                               
permanent fund dividend  for a member of the armed  forces of the                                                               
United States  serving on active  duty outside of the  state; and                                                               
providing for an effective date."                                                                                               
8:07:29 AM                                                                                                                    
SHARALYN WRIGHT,  Staff to  Representative Mike  Chenault, Alaska                                                               
State Legislature, introduced HB  201 on behalf of Representative                                                               
Chenault, sponsor.   She explained  that the purpose of  the bill                                                               
is to permit a  person who has a power of  attorney for an active                                                               
military  duty person  who's stationed  outside of  the State  of                                                               
Alaska to sign  and file an Alaska Permanent  Fund Dividend (PFD)                                                               
application for  the said individual.   She presented  an example                                                               
of an  Alaskan man stationed  in Japan  who was then  deployed to                                                               
Afghanistan,  and the  PFD  Division could  not  contact him;  he                                                               
didn't know  that there  was a problem  with his  PFD application                                                               
until he returned to Alaska.                                                                                                    
MS. WRIGHT continued:                                                                                                           
     So if someone  back home had a power  of attorney, that                                                                    
     power of  attorney allows you to  make absolutely life-                                                                    
     changing decisions:  you can  sign for a  bank account,                                                                    
     you can  sign for real  estate, you can make  all kinds                                                                    
     of decisions.   And in  the whole scope of  things, the                                                                    
     [PFD] shouldn't  fit at the  top or the bottom  of that                                                                    
     list; it  should fit somewhere  in the middle.   And we                                                                    
     should allow someone ... who's  a trusted person in the                                                                    
     military  person's   life,  ...  to  sign   that  [PFD]                                                                    
     application so that  [the PFD check] comes  in a timely                                                                    
8:09:35 AM                                                                                                                    
REPRESENTATIVE GARDNER  remarked that there is  the potential for                                                               
problems if one  or more persons applies on behalf  of the person                                                               
who's  on active  duty.    She asked  what  would  happen if  the                                                               
service person  never got the  money because someone  else signed                                                               
for the PFD check and took it.                                                                                                  
MS.  WRIGHT   replied,  "I  would   not  imagine   a  responsible                                                               
individual having  more than one  power of attorney,  ... because                                                               
when you have a power of  attorney and you decide to change that,                                                               
you  also  are   required  to  revoke  any   previous  powers  of                                                               
8:11:06 AM                                                                                                                    
CHAIR  SEATON  commented  that  the bill  would  only  allow  the                                                               
individual with the  power of attorney to apply for  the PFD.  He                                                               
asked  who  would be  held  responsible  for  fraud if  a  person                                                               
applied  for  a PFD  on  behalf  of  another  person who  is  not                                                               
eligible to receive the PFD.                                                                                                    
MS.  WRIGHT responded  that she  believed that  this issue  would                                                               
dealt with by the PFD Division.                                                                                                 
8:13:23 AM                                                                                                                    
SHARON  BARTON,  Director,   Permanent  Fund  Dividend  Division,                                                               
Alaska  Department of  Revenue, explained  that when  filling out                                                               
the PFD  application, the power  of attorney is attesting  to all                                                               
of the information  on the application being true so  far as that                                                               
person knows it to be true.                                                                                                     
CHAIR SEATON asked if the PFD  Division sees any problems with HB
MS. BARTON replied that logistically  the division has no problem                                                               
with  the bill,  as it  won't  put a  large new  workload on  the                                                               
personnel.    She noted  that  the  division is  concerned  about                                                               
possible fraud situations.  In addition, she pointed out:                                                                       
     We are  also concerned  about it being  offered broadly                                                                    
     to  all  military.   Our  military  members across  the                                                                    
     world   are   filing   very   successfully   this   ...                                                                    
     application period  for their dividends.   We know that                                                                    
     those folks  in Iraq or Afghanistan,  places like that,                                                                    
     don't  have  the  ready  access  to  mail  and  to  the                                                                    
     Internet, although  they do,  almost all of  them, have                                                                    
     access eventually. ...  We have a lot  of support built                                                                    
     into  our  processing system  now  to  allow plenty  of                                                                    
     time,   all  the   time  they   need,   to  get   their                                                                    
     applications  in when  they return  to a  place in  the                                                                    
     world  they  can file  or  can  supply that  additional                                                                    
     information  they  need.    But  if  the  committee  is                                                                    
     interested  in   making  this  available   to  military                                                                    
     members, we  would ask  that you  consider at  any rate                                                                    
     restricting it to those who  are receiving hostile fire                                                                    
     or imminent danger pay....                                                                                                 
8:16:59 AM                                                                                                                    
CHAIR SEATON asked  if Ms. Barton had any  suggested language for                                                               
MS. BARTON responded that she did  not have it with her but would                                                               
be available to work on the language for an amendment.                                                                          
8:17:39 AM                                                                                                                    
REPRESENTATIVE GARDNER asked Ms. Barton  if she was implying that                                                               
she didn't see the need for this bill.                                                                                          
MS.  BARTON  answered that  division  personnel  have heard  some                                                               
complaints from people who have  been frustrated with the current                                                               
system, mostly  from family members  of the  military servicemen.                                                               
She noted  that she personally  only knew of one  particular such                                                               
case.   She said, "Staff  tell me when  I poll them  that they've                                                               
been  able to  work through  every situation  with the  calls and                                                               
letters and emails that they've  received about the military. ...                                                               
It mostly  has to do  with the delay  in receiving the  PFD check                                                               
when they  get back  to the  States. ...  But in  no case  are we                                                               
denying anyone."                                                                                                                
REPRESENTATIVE RAMRAS  commented that he  felt HB 201  would make                                                               
it easier for military personnel that  are in harm's way to apply                                                               
for the PFD.                                                                                                                    
8:20:08 AM                                                                                                                    
CHRIS POAG, Civil Division, Alaska Department of Law, explained:                                                                
     A typical  power of  attorney has  two parties:   one's                                                                    
     the principal  - that's  the person  who's represented,                                                                    
     the military person who goes  overseas; and the other's                                                                    
     the  agent, or  attorney-in-fact  -  that's the  person                                                                    
     who's going  to do  any benefit applications  on behalf                                                                    
     of the  principal.  In  that scenario, ...  the agent's                                                                    
     responsible   in   a    [PFD]   application   to   make                                                                    
     representations about  whether or not the  principal is                                                                    
     in fact  eligible. ... We  have to assume  that they'll                                                                    
     get  that  information   directly  from  the  principal                                                                    
     instead of from  some sort of second-hand  source.  But                                                                    
     when  they  make  that  information  available  in  the                                                                    
     application and they turn that  application in, it more                                                                    
     becomes a  question probably in a  prosecution sense of                                                                    
     who made the representation.                                                                                               
MR. POAG explained  that either the principal  provided the agent                                                               
with  false information,  or  the  agent made  a  mistake on  the                                                               
application.     Fraud  refers  to  false   information  that  is                                                               
purposefully  provided,  he   noted,  not  unknowingly  provided.                                                               
Under HB 201, he said:                                                                                                          
     This is just  going to be very hard,  if not impossible                                                                    
     to  prosecute  because  you're  going  to  have  people                                                                    
     pointing the  finger at each other  saying, 'Well, they                                                                    
     told  me this,'  and 'They  told  me that.'   And  it's                                                                    
     going  to be  real hard  to prove  beyond a  reasonable                                                                    
     doubt    that    anybody     knowingly    made    false                                                                    
     representations in that [PFD].   So I think pretty much                                                                    
     we'll  be giving  up any  prosecutions in  these cases.                                                                    
     It would be very difficult to do otherwise.                                                                                
8:22:07 AM                                                                                                                    
MR. POAG continued:                                                                                                             
     As you know, when you  file for your [PFD] application,                                                                    
     you have to make  a representation that the information                                                                    
     is correct,  and that  you intend  to remain  in Alaska                                                                    
     indefinitely, or,  if you're  Outside, that  you intend                                                                    
     to return and remain  indefinitely.  Obviously an agent                                                                    
     on  behalf  of  a   principal  can't  make  intentional                                                                    
     statements for them.   So we also gave  up that portion                                                                    
     of our application requirement.                                                                                            
8:23:54 AM                                                                                                                    
REPRESENTATIVE GATTO stated  that a crooked person  could file as                                                               
power of attorney for someone and  have the PFD check placed into                                                               
his or her own account.  He  asked what the PFD Division could do                                                               
about this.                                                                                                                     
MR. POAG replied:                                                                                                               
     It depends a  lot on the form of the  power of attorney                                                                    
     that's been drafted.  And  it depends probably a little                                                                    
     bit on the  way this legislation's drafted as  well.  A                                                                    
     typical power  of attorney that has  normal powers, not                                                                    
     specific powers,  ... would be entitled  to [have] that                                                                    
     check ...  put into  the account that  they designated;                                                                    
     they are [the]  agent, they make decisions  as to where                                                                    
     the  money goes  and how  it's spent  and all  of those                                                                    
     sorts of decisions.   So that crooked  person could end                                                                    
     up with [the principal's] PFD in their [own] account.                                                                      
REPRESENTATIVE GATTO asked who becomes  the liable person in this                                                               
MR.  POAG  replied   that  it  would  depend  on   who  made  the                                                               
misrepresentation.   He  commented  that the  state  will have  a                                                               
difficult  time  determining which  one  was  lying if  they  are                                                               
blaming one another.                                                                                                            
8:25:54 AM                                                                                                                    
MR.  POAG, in  response to  Representative Gatto,  stated that  a                                                               
person cannot fill out a PFD application for his/her spouse.                                                                    
REPRESENTATIVE  GATTO  commented  that  the bill  would  then  be                                                               
saying that the power of attorney trumps marriage.                                                                              
MR. POAG responded:                                                                                                             
     I  think this  is probably  why ...  allowing power  of                                                                    
     attorneys  has  been a  sort  of  a guarded  exception.                                                                    
     It's been  for, essentially,  a parent  on behalf  of a                                                                    
     child [to  make] ... representations  as to  whether or                                                                    
     not their child  intends to return or  remain in Alaska                                                                    
     and  stay there  indefinitely.   And this  [bill] is  a                                                                    
     situation  where we're  broadening  the  scope of  that                                                                    
MR.  POAG pointed  out that  current  law allows  for a  military                                                               
person to late file after he/she has returned from the hot zone.                                                                
8:28:05 AM                                                                                                                    
REPRESENTATIVE  RAMRAS  stated  that  Fort  Wainwright  and  Fort                                                               
Richardson will both  be having large deployments  this year, and                                                               
he saw  that the deployment  newsletters address issues  like how                                                               
to  give one's  spouse  the  power of  attorney.    He asked  for                                                               
confirmation  that the  bill  would make  the  power of  attorney                                                               
applicable specifically  to the  PFD because  it comes  under the                                                               
purview of the State of Alaska.                                                                                                 
MR.  POAG  replied  that  current  PFD law  says  that  only  the                                                               
individual  can apply  for  his  or her  own  PFD,  and the  only                                                               
exceptions  for that  are  for a  child or  for  somebody who  is                                                               
incapacitated.   He  stated  that  HB 201  would  create a  third                                                               
exception for military  persons.  He noted, "The  bill as drafted                                                               
doesn't have  any 'hot zone'  language.   As drafted it  would be                                                               
anybody in the military outside of the United States."                                                                          
8:29:25 AM                                                                                                                    
REPRESENTATIVE  RAMRAS commented  that  this  was a  particularly                                                               
timely bill because  of the large deployments  scheduled for this                                                               
REPRESENTATIVE GARDNER  asked if there  is any reason  that those                                                               
individuals being deployed  this fall couldn't apply  for the PFD                                                               
before they leave.                                                                                                              
MR. POAG replied that they can  apply between January 1 and March                                                               
8:30:36 AM                                                                                                                    
REPRESENTATIVE GARDNER  asked if  a military person  doesn't come                                                               
back, for  any reason,  if the  spouse or  power of  attorney can                                                               
continue  to apply  for the  PFD on  behalf of  that person  year                                                               
after year.                                                                                                                     
MR. POAG replied  that if the principal  abandoned his/her intent                                                               
to  return to  Alaska, then  the agent  or spouse  should not  be                                                               
filing on  the principal's behalf.   He stated that if  the agent                                                               
was  representing  in  the application  that  the  principal  was                                                               
outside of  Alaska, at some  point the principal would  no longer                                                               
qualify  for an  Outside allowable  absence exception.   He  said                                                               
that if  the language of this  bill were to be  drafted such that                                                               
the agent  can only file while  the principal is in  the hot zone                                                               
outside  of the  United States,  then  that would  at some  point                                                               
expire, and  the agent would probably  be caught.  He  noted, "It                                                               
would depend on the drafting of this bill."                                                                                     
8:32:12 AM                                                                                                                    
MR. POAG,  in response  to Chair Seaton,  reiterated that  as the                                                               
bill  is  currently drafted,  it  allows  anyone on  active  duty                                                               
outside  of  the  United  States  to apply  through  a  power  of                                                               
attorney, even  if the  individual is  not in a  hot zone  and is                                                               
gone for a long  time.  He said that if the  bill were limited to                                                               
hot  zones,  it   would  be  easier  for  the   PFD  Division  to                                                               
investigate possible frauds.                                                                                                    
8:33:14 AM                                                                                                                    
REPRESENTATIVE GATTO  asked if  there is any  place in  the world                                                               
that does not qualify as a hot zone.                                                                                            
MR. POAG  replied that as he  understood it, being in  a hot zone                                                               
would require a person to qualify  for a certain type of military                                                               
pay status.                                                                                                                     
REPRESENTATIVE GATTO  asked if  the term  "hot zone"  is actually                                                               
MR.  POAG replied  yes;  it's  an official  pay  status that  one                                                               
receives in the military.                                                                                                       
CHAIR SEATON closed public testimony.                                                                                           
8:34:32 AM                                                                                                                    
CHAIR  SEATON  asked Ms.  Wright  to  address  the issue  of  the                                                               
inability to  enforce an  intent to return  provision if  the PFD                                                               
application is completed through a power of attorney.                                                                           
MS. WRIGHT  presented an example  of an individual  who defrauded                                                               
the  PFD  Division  and  was reported,  but  the  division  never                                                               
pursued the case.  She said, "I  guess in life we have to realize                                                               
that if somebody  is out to circumvent the  system, they're going                                                               
to circumvent it  no matter what rule we come  up with, no matter                                                               
what changes  we make."  She  reiterated that the purpose  of the                                                               
bill is to allow the military  personnel to have an easier way to                                                               
apply  for the  PFD.   She  noted that  hot zone  pay can  change                                                               
quickly.  She said, "I  strongly believe this 'hot zone' language                                                               
should not be  in [the bill]."   Representative Chenault's office                                                               
devotes a lot of time to military-PFD problems, she stated.                                                                     
8:38:51 AM                                                                                                                    
REPRESENTATIVE ELKINS  asked why  the power of  attorney couldn't                                                               
specify that it was only good for applying for the dividend.                                                                    
MS.  WRIGHT answered  that  there  is an  area  on  the power  of                                                               
attorney  [application] that  would allow  a person  to write  in                                                               
that the agent has permission to file for a PFD.                                                                                
8:40:46 AM                                                                                                                    
REPRESENTATIVE RAMRAS  reiterated that soldiers from  Alaska will                                                               
be deployed overseas  this year and the  military has recommended                                                               
that the  soldiers set  up a  power of  attorney.   He emphasized                                                               
that the bill should be passed quickly.                                                                                         
MS.  WRIGHT concurred  with Representative  Ramras  and said  the                                                               
bill is  long overdue.   She  said, "We  have afforded  the [PFD]                                                               
Division  every opportunity.    At the  beginning  of session  we                                                               
brought them in, told them what  the problem was, gave them every                                                               
opportunity to repair it, and [they] chose not to."                                                                             
8:42:30 AM                                                                                                                    
REPRESENTATIVE GARDNER said  that she applauds the  effort of the                                                               
bill,  but she  wonders if  a better  plan would  be to  make the                                                               
application available early for people who are leaving.                                                                         
MS. BARTON  replied that Representative Gardner's  proposal could                                                               
perhaps be  worked into the law.   She noted that  the problem is                                                               
that the  eligibility period  covers the full  year prior  to the                                                               
dividend, from January  1 to December 31.  If  someone filled out                                                               
the  application in  August, "it's  unknown what  might occur  to                                                               
them between August  and January as far as  their eligibility for                                                               
the dividend."   The  law requires that  the applicant  attest to                                                               
the fact  that during the  prior eligibility year  certain things                                                               
have been true, she said.                                                                                                       
8:44:35 AM                                                                                                                    
CHAIR  SEATON requested  that for  the next  hearing, Ms.  Barton                                                               
present  data  on  the  number  of  applications  that  have  had                                                               
problems on this particular aspect  of the PFD application "so we                                                               
have a good handle on the  numbers and those that were denied, or                                                               
missed or filed late under the current existing law."                                                                           
8:44:54 AM                                                                                                                    
MS.  BARTON, in  response to  Representative Gatto,  replied that                                                               
under  the law,  a person  would  be committing  fraud if  he/she                                                               
filled out a spouse's application with the spouse's e-signature.                                                                
[HB 201 was heard and held.]                                                                                                    

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