Legislature(1997 - 1998)
05/08/1997 05:40 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 2(FIN)
"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."
SUSANNE CARTER-BADILLA, of Juneau, spoke on behalf of
herself and other spouses who did not receive dividends
because of being with their spouse on an allowable absence.
She was supportive of the legislation and encouraged its
passage. As a resident since 1979, she had received
dividends since inception of the program. In 1994, she and
her husband moved their family to Washington to enable him
to attend university. She was denied dividends for 1994 and
1995 because they were out of the state for more than 180
days, however, her husband and children did receive
dividends for those years. She believed this type of
situation needed correction to encourage families to stay
together. Present statutes penalize the families that
choose not to separate and places a financial burden on
those who depend on the dividend to make ends meet. Since
the court ruling, many have been denied dividends
specifically for accompanying a spouse on an allowable
absence. She noted legislation to correct this situation
has been introduced during three sessions, meanwhile people
continue to be affected. Passage of HB 2 would rectify an
unfair situation.
SENATOR PHILLIPS commented that the bill may be amended to
rectify the situation from 1997 forward and asked for Ms.
Badilla's comment. She felt it was better than nothing. It
was more critical to her in the past, but it was important
that others were not in the same unfair position.
SENATOR PHILLIPS requested a response from Nanci Jones and
the Attorney General's office regarding residency
requirements and retroactivity for land credits for vets to
use as an example.
The following testimony was heard via teleconference.
CORA WATKINS, Fairbanks, described her situation. She moved
to Alaska in 1984 with her active-duty military husband and
they became residents in every way. They left the state for
19 months for his final tour of duty. During this time, he
received his dividend, but she was denied because she
accompanied him. She felt she had no other choice than to
do so because of financial and housing matters. She noted
that had her children been minors, they would have continued
to receive their dividends, but as a spouse, she had been
denied. She maintained her Alaska driver's license, vehicle
registration, voted absentee ballots and did everything she
could to maintain residency only to find out she was denied
because the law had been changed. She believed it was very
unfair to the spouses and it needed correction. She did not
understand why minor children continue to qualify, while
spouses did not.
NANCI JONES, Director, Permanent Fund Dividend Division,
Department of Revenue, responded to her last statement. She
referred to the court ruling which dealt with the adult
spouse, but did not address the children at the time. It
was decided that as long as children were sponsored by the
spouse on the allowable absence, they weren't invalidated
from receiving a dividend.
JOAN HALE, Eagle River, spoke in support of the unamended
bill. She had lived in Alaska since 1977, except for
temporary absences during 1982 to 1986, and 1990 to 1994
while her husband was stationed outside for military
service. Her family maintained residency and continued to
receive dividends. She was denied a dividend in 1994 when
the department chose to apply the superior court ruling
across the board, which effectively eliminated the piggyback
rule. She stated that she and her family followed all the
required rules to maintain their residency for the
dividends, even as far as paying out-of-state tuition. She
felt that the denial was an improper and arbitrary exclusion
of the piggyback rule and filed suit in superior court after
all attempts through the Permanent Fund process had failed,
because it became a matter of principal. She prevailed in
superior court, but the department appealed to the supreme
court and the case was pending. She noted the department
has demanded payment of court costs should they prevail on
appeal, not only for the supreme court case but the superior
court as well. The department was unwilling to pay any of
her costs, citing that the legislature would have to act
before that could happen. She believed the department had
taken that position to discourage all challenges.
LYNN ALLINGHAM, Attorney, Anchorage, testified that she
represented Ms. Hale in the appeal of her dividend denial.
She gave some background on the dividend eligibility for
military wives. She used an example where the husband is in
the military and the wife is denied a dividend because it
was the most common situation, although it would apply for
other reasons such as attending college, serving in
congress, or seeking medical treatment. In the late '80's
and early '90's, the department had a policy that if an
applicant was married to a non-resident, the applicant was
disqualified from receiving a dividend. So, if a military
man moved to Alaska, married an Alaskan woman, she would not
get a dividend if her husband did not change his residency
to Alaska, even if she had been a life-long Alaskan,
continued living in the state with her new husband, and had
received dividends. Because of this, AS 43.23.015 was
amended effective January 1992, saying the department could
no longer deny a wife's dividend based on the husband's
residency as the principal factor for determining the wife's
residency. Until the end of 1993, wives who accompanied
their husbands on military tours of duty were granted
dividends as long as their husband remained eligible, based
on the department's regulation 15 AAC 23.163. In September
1993 a suit was filed in superior court stating it wasn't
fair to deny dividends to wives who accompanied their
husbands out of state. The argument was that the 1992
amendment meant that they should get their dividends. The
legislative intent of that amendment was not well explained
to the judge, the regulation was ruled a violation of the
1992 amendment, and it became retroactively invalid as of
January 1992. MS. ALLINGHAM commented that it was ironic
that the purpose of the amendment was to keep the department
from denying dividends to otherwise eligible Alaskan women.
Then, after originally arguing their regulation was valid,
the department adopted the judge's decision and began
denying dividends to wives absent from the state more than
180 days accompanying a husband on an allowable absence. It
has resulted in many families in which the husband and
children received dividends, but the wives and mothers have
been denied. She did not believe it was what the
legislature intended when passing the 1992 amendment, and it
inadvertently created a mess. HB 2 would correct the
inequity of husbands and children receiving dividends while
the mothers were denied, even while passing all other
criteria.
LYDIA CLARK, Sitka, described her experience of seeking
medical care outside the state for her husband's terminal
illness. She and her family kept everything Alaskan while
out of state. After her husband died, she kept her children
in school to finish out the semester, then moved back to
Alaska. She was denied filing for 1994, then filed the next
year several times via air express to plead her case, was
still denied, and finally came up for review this year. She
was absent from the state for only two months of 1994, but
could not file timely that year because of the need to make
funeral arrangements. She stated she continues to be
denied.
DONNA HUTTON, Mat-Su, testified that she had filed for a
dividend since 1991, but has yet to receive a dividend. She
commented that she had not received satisfaction from the
Permanent Fund Division, only flippant answers regarding her
ineligibility. She commented that she came to Alaska to
apply for dual citizenship and her husband had his green
card. She sought help in pursuing the matter.
MS. JONES inquired about her dual citizenship, noting the
requirement to be a U.S. citizen and a resident. There was
additional discussion. SENATOR PHILLIPS encouraged Ms.
Hutton to contact Ms. Jones at her office to clarify her
circumstances.
KATHLEEN BEASINGER, Fairbanks, explained that she had been
denied a dividend since 1992 because she was married to a
military man. She had been a resident since she was twelve.
Her husband received dividends basically because he was
married to her, yet she was disqualified because she was
married to him. She spoke in support of the bill and
encouraged passage.
LAINA SMITH, Fayetteville, North Carolina, described her
situation in which she moved from Alaska to Fort Bragg with
her husband when he joined the army. They have resided
there for five years and will be moving back to Alaska in
July. While there, they kept their Alaska residency by
retaining their driver's licenses, car and voter's
registration, hunting and fishing licenses. She also paid
out-of-state tuition while completing her education. She
has not received a dividend since 1992, although her husband
and children continue to receive theirs. She became
ineligible because she piggybacks on her husband. She was
an Alaska resident prior to his joining the army because of
lack of work in the state.
MS. JONES asked questions about transfer of her schooling
from the University of Alaska to a private school in North
Carolina. She gave Ms. Smith her phone number and requested
she contact her office. MS. SMITH added that she had been
informed of her denial based on leaving the state because
her husband was in the military and not because of full-time
school enrollment. In response to a question from Ms.
Jones, she confirmed that she received a written decision to
that effect from the department.
SENATOR PHILLIPS checked in with all the LIO and outside
sites for additional testimony. There being none, he
recessed the meeting briefly to attend the Senate session.
Recess 6:20 P.M.
Reconvene 6:50 P.M.
SENATOR PHILLIPS once again queried the LIO and outside
sites for further testimony. No additional witnesses had
signed up so he adjourned the meeting after announcing a
number for interested parties to fax testimony to the
committee.
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