Legislature(2013 - 2014)BUTROVICH 205
03/19/2013 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HCR5 | |
| HCR2 | |
| HB52 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HCR 2 | TELECONFERENCED | |
| + | HCR 5 | TELECONFERENCED | |
| + | HB 52 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 52-PFD ALLOWABLE ABSENCE
9:32:13 AM
CHAIR DYSON resumed the meeting and announced the consideration
of HB 52. [HB 52 AM was before the committee.]
9:32:21 AM
REPRESENTATIVE ERIC FEIGE, sponsor, introduced HB 52. He said
the bill deals with how to address allowable absences relating
to the Permanent Fund Dividend (PFD). It provides that after a
person has been gone from the state for more than five years, it
sets up a presumption that they do not intend to return to the
state. It is the applicant's responsibility to prove to the
state that they do intend to return. Everyone is treated
equally. He stated that it is a great improvement to take
principles that have been in regulations and put them into
statute. This strengthens the Permanent Fund Division's ability
to adjudicate appeals.
9:33:56 AM
CHAIR DYSON asked, under the present law if someone does not
return after five years, how they establish that they are going
to return.
REPRESENTATIVE FEIGE said there were a number of criteria
established in HB 52 that were already in regulation, such as
proof of voting, owning property, repeated trips back to Alaska,
returning for a cumulative total of 30 days over the previous
five years, and other metrics.
CHAIR DYSON asked if the process is clumsy or not.
REPRESENTATIVE FEIGE said the process is the same as the
existing process to apply for a PFD. The person must satisfy PFD
eligibility requirements and it is incumbent upon the applicant
to appeal if they are denied.
CHAIR DYSON asked if HB 52 takes out the five-year limit and
makes it indefinite.
REPRESENTATIVE FEIGE clarified that the bill does not remove the
five-year limit, but instead it makes a presumption that up
until five years, a person does intend to return to the state.
In the sixth year, the state presumes the person does not intend
to return.
9:36:29 AM
CHAIR DYSON asked if the bill takes existing PFD regulations and
puts them in statute.
REPRESENTATIVE FEIGE said not all of the regulations, but some
of them.
9:36:53 AM
MICHAEL PASCHALL, staff, Representative Eric Feige, explained
the bill. He shared the history of the changes in the statute.
He explained the definition of a state resident in 1982, for the
purposes of obtaining a PFD. Four additional allowable absences
were included in 1997, as was a generic definition of "state
resident." He discussed the allowable absences as found in 1998.
He noted that a person must be a resident for 60 days before
they can leave the state for an allowable absence. He explained
a provision for Congress family members and staff.
MR. PASCHALL related minor changes since 2012 for military
members, and those serving on a foreign vessel. There are
currently 16 different reasons for allowable absences from the
state. The bill adds definitions as to what a "family member"
is.
9:41:45 AM
MR. PASCHALL addressed allowable absences after HB 52 is in
place. Most of the current provisions are left in place, as it
the section that deals with absences for multiple purposes and
the definition. A new subsection is added that creates a
presumption that someone who has been on allowable absence for
five consecutive years, does not intend to return to the state.
The presumption has been in regulation, but has been challenged.
Putting the provision in statute would make it easier for the
division to deny applications that might not be valid and have
that decision upheld through the administrative appeals process.
CHAIR DYSON asked if the department can recapture funds from
someone who has been "gaming the system."
MR. PASCHALL deferred to the department to answer.
He continued to explain that a provision was added in the bill
that a person must be physically present in the state for at
least 30 cumulative days during the past five years and be a
state resident as defined in AS 43.23.095(7). He explained what
is used to determine if a person intends to return, such as the
length of time a person is absent from the state, compared to
the length of time the individual was physically present in the
state. The division can now develop an objective scoring scale
to determine eligibility. He said ties the individual has
established with the state is another relevant factor, as is
employment assignments, such as military careers.
9:47:06 AM
He noted that HB 52 takes out the ten-year rule, except for
members of Congress. This provision would have an impact on
military members. He concluded that the bill is getting rid of a
class and treating everyone equally.
He highlighted a graph that shows groups of individuals eligible
to receive the PFD after 10 years of absences; a very small
group is being excluded by the existing rule. He said the last
slide shows data from the division regarding absences since
1999. The number drops in recent years.
9:48:58 AM
DAN DEBARTOLO, Director, Permanent Fund Dividend Division,
Department of Revenue, explained that the bill eliminates the
ten-year rule, reducing the workload for the division. The
people who were denied dividends due to the ten-year rule never
exceeded 107 individuals. There will not be a large impact if
the rule goes away. The number of people reaching 10 years of
180-day absences is declining.
He explained that the bill also moves language regarding five-
year absences from regulation into statute and clears up "soft"
language. Now the rule says if a person does not return to the
state, cumulatively, for 30 days over a five-year period, that
person will have to go through the process to show strong ties
to the state. He added that the zero fiscal note means there is
not an increase in work for the division. The impact on the PFD
Fund is indeterminate. He predicted there should be a change in
the number of dividends paid out.
9:52:50 AM
SENATOR WIELECHOWSKI moved to adopt Amendment 1:
AMENDMENT 1
Page 3, following line 12:
Insert a new bill section to read:
"* Sec. 2. AS 43.23.008(c) is amended to read:
(c) An otherwise eligible individual who has
been eligible for the immediately preceding 10
dividends despite being absent from the state for more
than 180 days in each of the related 10 qualifying
years is only eligible for the current year dividend
if the individual was absent 180 days or less during
the qualifying year. This subsection does not apply to
an absence under (a)(9) or (10) of this section or to
an absence under (a)(13) of this section if the
absence is to accompany an individual who is absent
under (a)(9) or (10) of this section. This subsection
does not apply to an absence under (a)(3) of this
section."
Renumber the following bill sections accordingly.
Page 4, line 10:
Delete all material.
Renumber the following bill sections accordingly.
Page 4, lines 15 - 16:
Delete "former AS 43.23.008(c), repealed by sec.
3 of this Act,"
Insert "AS 43.23.008(c), as it read on the day
before the effective date of this Act,"
Page 4, lines 19 - 20:
Delete "The repeal of AS 43.23.008(c) by sec. 3
of this Act and the enactment of AS 43.23.008(e) by
sec. 2 of this Act"
Insert "AS 43.23.008(e), enacted by sec. 3 of
this Act,"
CHAIR DYSON objected for discussion.
SENATOR WIELECHOWSKI stated that he supports HB 52 and has
sponsored it in the past. He added that he has also worked with
the sponsor on the bill. He explained that HB 52 applies a
statutory criteria after a person has been absent for five
years, and he said he supports that provision.
He stated that Amendment 1 would keep the 10-year rule intact.
If a person has been gone for 10 years, they should not receive
a PFD, except for members of Congress and their families and
staffers. Amendment 1 would also allow active duty overseas
members to receive a PFD, even if they've been gone for ten
years.
9:56:15 AM
SENATOR COGHILL asked what the sponsor says.
MR. PASCHALL related that the sponsor has looked at a variety of
options over the past three years when working on the bill. He
said, in the process, he learned about Equal Protection Clause
requirements, and in working with the division and legislative
legal, the bill contains the least amount of possible equal
protection qualifications. Last fall, changes were made to the
bill to incorporate suggestions about equal protection as it
applies to the PFD. He said the sponsor does not want to raise
the possible question regarding equal protection. He recalled
the Zobel v. Williams decision where the Alaska Supreme Court
ruled in favor of the state and the U.S. Supreme Court
overturned that decision. The way the bill is written currently
does not raise such risks.
SENATOR WIELECHOWSKI agreed it was a concern a year ago, but
noted that since then there has been a U.S. Supreme Court
decision based on the Ross v. Alaska case. He read a legal
opinion that stated, "Based on the Ross case, it seems likely
that a court would uphold an exception to the 10-year rule for
active duty military members against an equal protection
challenge." He agreed with that analysis and explained that a
court would look to see if there is a rational basis for
treating military as an exception. He maintained the basis is
that military members can be residents of this state and can be
assigned to go overseas; therefore there is a rational basis for
treating them differently. He gave examples of military members
in that situation. He concluded that Amendment 1 "balances
Alaskan's desire to protect our permanent fund against our
desire to provide benefits for active duty military."
9:59:54 AM
MR. BARTOLO explained, from an administrative perspective, the
provisions in Amendment 1 would be achievable. The division
would leave the ten-year rule in place and create a new
mechanism for exempting military. It would require programmatic
changes and an amended fiscal note.
CHAIR DYSON maintained his objection to adopting Amendment 1.
10:00:37 AM
A roll call vote was taken. Senator Wielechowski voted in favor
of Amendment 1 and Senator Coghill and Chair Dyson voted against
it. Therefore, Amendment 1 failed by a 1:2 vote.
10:01:25 AM
SENATOR COGHILL moved to report HB 52 [AM] out of committee with
individual recommendations and attached zero fiscal note. There
being no objection, HB 52 AM was reported from the Senate State
Affairs Standing Committee.