Legislature(1997 - 1998)

05/07/1997 08:45 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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       HOUSE BILL NO. 2                                                        
                                                                               
       "An Act allowing,  for the  purposes of permanent  fund                 
  dividend  eligibility,  an individual  to accompany,  as the                 
  spouse or      minor or disabled dependent, another eligible                 
  resident who is     absent for any of the following reasons:                 
  vocational,    professional, or other specific education for                 
  which a   comparable program is not  reasonably available in                 
  the state;     secondary    or   postsecondary    education;                 
  military service;   medical   treatment;   service   in  the                 
  Congress or in the peace      corps;   to   care   for   the                 
  individual's terminally ill parent,     spouse,     sibling,                 
  child, or stepchild; for up to 220 days to   settle      the                 
  estate of the individual's deceased parent, spouse,                          
  sibling, child, or stepchild; to care for a  parent, spouse,                 
       sibling,   child,   or   stepchild  with   a   critical                 
                                                                               
                                                                               
  life-threatening    illness   whose   treatment   plan,   as                 
  recommended by the attending  physician,   requires   travel                 
  outside of the state for treatment      at     a     medical                 
  specialty complex; or other reasons that the                                 
  commissioner of revenue may establish by regulation;                         
  requiring, for the purposes of permanent fund dividend                       
  eligibility, a state resident to have the intent to remain                   
  indefinitely; relating to the eligibility for 1992, 1993,                    
  1994,  1995,  1996,  and 1997  permanent  fund  dividends of                 
  certain   spouses and dependents of eligible applicants; and                 
  providing      for an effective date."                                       
                                                                               
  Representative Pete Kott, sponsor of the bill was invited to                 
  join the committee.  He read  his sponsor statement into the                 
  record.    It  was  noted that  eligibility  should  not  be                 
  determined through marriage.  Representative Kott  said they                 
  were trying  to restore the  bill to  its' original  intent.                 
  The  state  has filed  an  appeal  with  the Supreme  Court.                 
  Approximately 7,500 applicants would be affected by the bill                 
  at present.                                                                  
                                                                               
  Senator Adams asked for an explanation of the Superior Court                 
  ruling.  Representative Kott  noted there was a copy  of the                 
  December 1976 Superior Court ruling  (Joan Hale vs. State of                 
  Alaska,  Department  of  Revenue,  Permanent Fund  Division)                 
  enclosed as  back-up material  in committee  members' files.                 
  Senator    Phillips   asked   about   page   3,   line   17.                 
  Representative Kott said  this referred  to current  status.                 
  Co-chair Sharp asked about those  applicants who were denied                 
  and now out  of state.  He  had a hard time  accepting those                 
  out  of state could apply  for the dividend  but some of his                 
  elderly constituents were unable to apply retroactively.  He                 
  wanted  to  know   how  intent  to  remain   in  Alaska  was                 
  established.     Representative  Kott  said  it  was  always                 
  difficult to establish intent.  However, each applicant must                 
  satisfy eligibility for the dividend.   Senator Adams voiced                 
  concern giving the dividend to those  with intent and in the                 
  process denying real Alaskans.                                               
                                                                               
  Representative Kott further advised  that those not applying                 
  before 1998 would not be allowed to file.  One  could always                 
  submit   supplemental   documents  and   then  wait   for  a                 
  determination of eligibility.  Senator  Donley asked about a                 
  penalty   for    falsely   applying   for    the   dividend.                 
  Representative  Kott  explained  that   it  was  a  criminal                 
  offense.    Senator Donley  again  asked about  the penalty.                 
  Representative Kott said the dividends must be paid back and                 
  there was a  fine of $5,000.   Witnesses on the  application                 
  were also subject to the same  penalty.  Senator Donley felt                 
  it was hard  for the state to collect the $5,000 fine and in                 
  addition it should be increased.  Due to the abuse situation                 
  of the dividend  if this bill is  to pass there should  be a                 
  stiffer  penalty  and  there  should  be  additional   tools                 
  available to law enforcement officials.  Representative Kott                 
                                                                               
                                                                               
  concurred.                                                                   
                                                                               
  Senator Adams referred to page 4, section 4.  Representative                 
  Kott said those in  the military must return once  every two                 
  years for thirty  days in order  to remain eligible for  the                 
  dividend.                                                                    
                                                                               
  Co-chair Sharp, at  this point,  advised there was  to be  a                 
  statewide  teleconference  regarding   this  bill   tomorrow                 
  evening  at 5:00 p.m.   Any interested individual could also                 
  fax  their   comments  to  the   Senate  Finance   Committee                 
  Secretary's office.  He asked Senator Torgerson  to hold his                 
  amendment  pending  the statewide  teleconference.   Senator                 
  Donley offered his further comments stating that he would be                 
  willing to work  with the department  over the next year  in                 
  order to alleviate some standards.  He referred specifically                 
  to page 3, line 10.                                                          
                                                                               
  Nanci  A.  Jones,  Director,   Division  of  Permanent  Fund                 
  Dividend,  Department  of Revenue  was  invited to  join the                 
  committee.    She   said  the   division  did  not   support                 
  retroactivity  of  the   bill.     She  opposed  section   4                 
  (retroactive payments  to spouses)  and piecemeal  absences.                 
  She said reopening the filing date of applications was not a                 
  good policy procedure.   However, basically, she  had always                 
  encouraged the filing of this bill.  Senator  Phillips asked                 
  if any benefits given  out by the State since  statehood had                 
  been made                                                                    
  retroactive.  Ms. Jones said she could not think of any.                     
                                                                               
  Deborah Vogt,  Deputy Commissioner,  Department of  Revenue,                 
  was invited to join the committee.   She said as far as  she                 
  could recall and  had researched there was  no precedence of                 
  retroactivity.   She felt  this bill  would set  a very  bad                 
  precedence  regarding  retroactivity.     Senator   Phillips                 
  recalled retroactivity regarding  the veterans' discount for                 
  land.  Senator Adams said that bill passed because the money                 
  had already been  collected from  the veterans so  therefore                 
  was a different matter.  He further commented on eligibility                 
  status and the intent of Alaskans to retain their residency.                 
  He recommended  that money could  be held in  escrow pending                 
  proof of residency.   Ms. Jones  advised that this had  been                 
  looked into.                                                                 
                                                                               
  Ms.  Vogt  further advised  the  committee that  all pending                 
  applications per  HB 4 of  last year had  been denied.   Co-                 
  chair Sharp  indicated that  failure of  the legislature  to                 
  pass a bill meant "no".  Senator  Phillips further commented                 
  on the  topic stating that just because  the legislature did                 
  not pass the bill did not  mean they did not take action  on                 
  the  bill  in  committee.     Hearings  were  scheduled  and                 
  testimony  was  taken.    Senator   Parnell  felt  that  the                 
  department  could  not  deviate  from  a  specific  deadline                 
  regarding filings and agreed that any retroactivity or delay                 
                                                                               
                                                                               
  would set a bad  precedence.  Co-chair Sharp said  the title                 
  was  too  tight and  nothing  could  be changed.    It would                 
  required a title change  to get out of committee  that would                 
  need a 2/3 vote and  that would be very difficult.                           
                                                                               
  Senator  Donley  requested Ms.  Jones  provide an  executive                 
  summary and she  said one would  be provided the  committee.                 
  She  referred  to  an  Anchorage  case  where  a sister  had                 
  continued to file on  behalf of a deceased sister.   In this                 
  case the defendant  was allowed  to pay back  the monies  by                 
  working  in  community service.    Co-chair Sharp  asked Ms.                 
  Jones to include in her executive summary  the total dollars                 
  for retroactivity  and the  number of  fraud connected  with                 
  out-of-state  filings.    Senator  Donley  also  asked  that                 
  penalties, how  the cases  were prosecuted,  fines, etc.  be                 
  included.  Co-chair Sharp also offered his concern about the                 
  filing deadline and said he opposed those out of state being                 
  able to  file; but  not those in  state.   In response  to a                 
  question by Co-chair  Sharp, Ms. Vogt said that the division                 
  had always paid legal resident aliens.  Co-chair Sharp asked                 
  the requested information be submitted  as soon as possible.                 
  He set aside HB 2.                                                           
                                                                               
  After a brief at ease, Co-chair Sharp called HB 63.                          
                                                                               

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