Legislature(1999 - 2000)

04/29/1999 03:40 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
           HOUSE FINANCE COMMITTEE                                                                                              
              April 29, 1999                                                                                                    
                 3:40 P.M.                                                                                                      
                                                                                                                                
TAPE HFC 99 - 114, Side 1                                                                                                       
TAPE HFC 99 - 114, Side 2                                                                                                       
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair Therriault called the House Finance Committee                                                                          
meeting to order at 3:40 p.m.                                                                                                   
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
Co-Chair Therriault   Representative Foster                                                                                     
Co-Chair Mulder    Representative Grussendorf                                                                                   
Vice-Chair Bunde     Representative Kohring                                                                                     
Representative Austerman   Representative Moses                                                                                 
Representative J. Davies   Representative Williams                                                                              
Representative G. Davis                                                                                                         
                                                                                                                                
ALSO PRESENT                                                                                                                    
                                                                                                                                
Representative Jerry Sanders, Sponsor; Mike Pauley, Staff,                                                                      
Senator Leman; Robert Buttcane, Youth Corrections,                                                                              
Department of Health and Social Services; James Kenworthy,                                                                      
PhD., Executive Director, Alaska Science and Technology                                                                         
Foundation, Department of Commerce and Economic Development;                                                                    
Harold Holton, Representative, Seafarers International                                                                          
Union, Anchorage; Nanci Jones, Director, Alaska Permanent                                                                       
Dividend Division, Department of Revenue; Deborah Vogt,                                                                         
Deputy Commissioner, Department of Revenue.                                                                                     
                                                                                                                                
TESTIFIED VIA THE TELECONFERENCE NETWORK                                                                                        
                                                                                                                                
John Glenn, Seaman, Anchorage; Eden Latta, Merchant Marine,                                                                     
Anchorage; Joy Tucker, Anchorage.                                                                                               
                                                                                                                                
SUMMARY                                                                                                                         
                                                                                                                                
HB 34 "An Act relating to the crime of misprision of a                                                                          
crime against a child."                                                                                                         
                                                                                                                                
HB 34 was HELD in Committee for further                                                                                         
consideration.                                                                                                                  
HB 40 "An Act combining parts of the Department of                                                                              
Commerce and Economic Development and parts of the                                                                              
Department of Community and Regional Affairs by                                                                                 
transferring some of their duties to a new                                                                                      
Department of Commerce and Rural Development;                                                                                   
transferring some of the duties of the Department                                                                               
of Commerce and Economic Development and the                                                                                    
Department of Community and Regional Affairs to                                                                                 
other existing agencies; eliminating the                                                                                        
Department of Commerce and Economic Development                                                                                 
and the Department of Community and Regional                                                                                    
Affairs; relating to the Department of Commerce                                                                                 
and Rural Development and the commissioner of                                                                                   
commerce and rural development; adjusting the                                                                                   
membership of certain multi- member bodies to                                                                                   
reflect the transfer of duties among departments                                                                                
and the elimination of departments; creating the                                                                                
office of international trade and relating to its                                                                               
duties; and providing for an effective date."                                                                                   
                                                                                                                                
HB 40 was HELD in Committee for further                                                                                         
consideration.                                                                                                                  
                                                                                                                                
HB 157 "An Act relating to absences from the state while                                                                        
serving on oceangoing vessels of the United States                                                                              
merchant marine for purposes of eligibility for                                                                                 
permanent fund dividends; and providing for an                                                                                  
effective date."                                                                                                                
                                                                                                                                
 HB 157 was REPORTED out of Committee with a "do                                                                                
pass" recommendation and with a zero fiscal note                                                                                
by the Department of Revenue dated 4/16/99.                                                                                     
                                                                                                                                
HB 209  "An Act amending the size of grants for which the                                                                       
Alaska Science and Technology Foundation must                                                                                   
allocate at least 50 percent of endowment income                                                                                
and amending the maximum amount of the grant that                                                                               
the Alaska Science and Technology Foundation may                                                                                
award for development of the Kodiak launch complex                                                                              
and Fairbanks satellite ground station space park;                                                                              
and providing for an effective date."                                                                                           
                                                                                                                                
 HB 209 was REPORTED out of Committee with "no                                                                                  
recommendation" and a zero fiscal note by the                                                                                   
Department of Commerce and Economic Development.                                                                                
                                                                                                                                
CSSB 27(FIN)                                                                                                                    
                                                                                                                                
"An Act relating to school records and driver                                                                                   
license records of certain children."                                                                                           
                                                                                                                                
CSSB 27 (FIN) was REPORTED out of Committee with a                                                                              
"do pass" recommendation and with a zero fiscal                                                                                 
note by the Department of Administration dated                                                                                  
2/25/99; and a fiscal impact note by the                                                                                        
Department of Education dated 2/25/99.                                                                                          
HOUSE BILL NO. 40                                                                                                               
                                                                                                                                
"An Act combining parts of the Department of Commerce                                                                           
and Economic Development and parts of the Department of                                                                         
Community and Regional Affairs by transferring some of                                                                          
their duties to a new Department of Commerce and Rural                                                                          
Development; transferring some of the duties of the                                                                             
Department of Commerce and Economic Development and the                                                                         
Department of Community and Regional Affairs to other                                                                           
existing agencies; eliminating the Department of                                                                                
Commerce and Economic Development and the Department of                                                                         
Community and Regional Affairs; relating to the                                                                                 
Department of Commerce and Rural Development and the                                                                            
commissioner of commerce and rural development;                                                                                 
adjusting the membership of certain multi- member                                                                               
bodies to reflect the transfer of duties among                                                                                  
departments and the elimination of departments;                                                                                 
creating the office of international trade and relating                                                                         
to its duties; and providing for an effective date."                                                                            
                                                                                                                                
Co-Chair Therriault provided members with a proposed                                                                            
committee substitute, 1-LS0056\K, Lauterbach, 4/28/99 (copy                                                                     
on file).                                                                                                                       
                                                                                                                                
HB 40 was HELD in Committee for further consideration.                                                                          
HOUSE BILL NO. 34                                                                                                               
                                                                                                                                
"An Act relating to the crime of misprision of a crime                                                                          
against a child."                                                                                                               
                                                                                                                                
Co-Chair Therriault noted that the Committee's previous                                                                         
action in adopting Amendment 1 resulted in unanticipated                                                                        
results. He noted that Representative Dyson would work with                                                                     
legal counsel to iron out any problems.                                                                                         
                                                                                                                                
HB 34 was HELD in Committee for further consideration.                                                                          
CS FOR SENATE BILL NO. 27(FIN)                                                                                                  
                                                                                                                                
"An Act relating to school records and driver license                                                                           
records of certain children."                                                                                                   
                                                                                                                                
MIKE PAULEY, STAFF, SENATOR LEMAN testified in support of SB
27. SB 27 ensures parents will have access to important                                                                         
records about their minor children, and also requires school                                                                    
districts to share information with other districts about                                                                       
potentially dangerous transfer students.                                                                                        
                                                                                                                                
The motivation behind this legislation stems from a                                                                             
call Senator Leman received last year from a                                                                                    
constituent in Anchorage.  This woman had contacted the                                                                         
Division of Motor Vehicles (DMV) to check on her teen                                                                           
daughter's driving record - because she suspected her                                                                           
child was driving with a suspended license.  She was                                                                            
astonished when the DMV told her that her daughter's                                                                            
driving record was private and confidential - and even                                                                          
a parent did not have a right to know this information!                                                                         
                                                                                                                                
Most people are aware of the responsibilities parents                                                                           
take upon their shoulders once their child receives a                                                                           
license.  A parent must give consent before the license                                                                         
is issued, and then the law holds the parent                                                                                    
responsible for any damage caused by negligence or                                                                              
willful misconduct while the child is operating a                                                                               
vehicle.  Yet the same law denies parents any right to                                                                          
check and see if their son or daughter is driving                                                                               
safely!                                                                                                                         
                                                                                                                                
We believe this provision of the law was probably                                                                               
unintentional.  There is a provision in our statutes                                                                            
that requires all drivers' records to be kept                                                                                   
"confidential and private."  This is obviously a needed                                                                         
protection for adults, but it makes no sense in the                                                                             
context of the parent-child relationship.  The current                                                                          
law provides an exception that allows law enforcement                                                                           
personnel to have access to the information.  But there                                                                         
is no such exception for parents.  Senate Bill 27                                                                               
corrects this problem.  It will allow parental access                                                                           
to a driving record that includes accident reports and                                                                          
also any convictions for vehicle, driver or traffic                                                                             
offenses.                                                                                                                       
                                                                                                                                
We understand from DMV that the number of times they                                                                            
have to turn down parents who request this information                                                                          
is relatively rare - apparently it happens fewer than                                                                           
ten times a year.  However, on those few occasions we                                                                           
understand it can be highly unpleasant for the DMV                                                                              
employee involved, and obviously frustrating for the                                                                            
parent.                                                                                                                         
                                                                                                                                
Mr. Chairman, in addition to access to driving records,                                                                         
SB 27 includes a provision guaranteeing parental access                                                                         
to school records.  When we set out to write this bill,                                                                         
we also considered whether there were any other records                                                                         
to which a parent should have access.  Of course,                                                                               
school records immediately came to mind.  Therefore, we                                                                         
asked the drafting attorney to review state statutes                                                                            
and determine whether there was any provision that                                                                              
guaranteed parents the right to access their children's                                                                         
school records.  We were surprised to learn there is no                                                                         
such law.  We did find a statute (AS 25.20.130), that                                                                           
guarantees a non-custodial parent the same access to                                                                            
school records that is allowed for custodial parents.                                                                           
But nowhere does the law define what access rights a                                                                            
custodial parent has, or what rights parents in general                                                                         
have!                                                                                                                           
                                                                                                                                
Therefore, we have added in Section 1 of this bill a                                                                            
provision that also guarantees parental access to                                                                               
school records of a child under 18.  We believe this                                                                            
adds clarity to our statutes.  It will also help ensure                                                                         
that no school in Alaska becomes ineligible to receive                                                                          
federal funding, because there is a federal law (20 USC                                                                         
1232g) that denies funding to any educational agency or                                                                         
institution that does not allow parental access to                                                                              
children's school records.  In light of this, we                                                                                
believe it is only prudent to state clearly in our                                                                              
statutes that parents have a right to this information.                                                                         
                                                                                                                                
Finally, there is a third provision of this legislation                                                                         
that deals with the transfer of student record                                                                                  
information. This provision, which is found in Section                                                                          
2 of the legislation before you, requires school                                                                                
districts to transfer certain information about a child                                                                         
who moves from one school district to another.  If the                                                                          
student has committed an offense that is punishable as                                                                          
a felony, or if the student has committed any offense                                                                           
involving the use of a deadly weapon, this information                                                                          
must be included in the student record information that                                                                         
follows the child from one district to another.  We                                                                             
believe this is a very useful amendment that will help                                                                          
school districts protect their students from                                                                                    
potentially dangerous young offenders.                                                                                          
                                                                                                                                
Vice-Chair Bunde referred to page 2, line 19. "The                                                                              
department may refuse to release the driver's address to the                                                                    
parent or guardian if the department determines that the                                                                        
release of the driver's address poses a threat to the health                                                                    
or safety of the driver." He questioned how the department                                                                      
would know and if the department would be reliable for the                                                                      
release. Mr. Pauley noted that the addition was at the                                                                          
request of the Council on Domestic Violence and the                                                                             
Department of Public Safety. The intent was to address the                                                                      
concern that a non-custodial parent with a history of                                                                           
domestic violence could request the information. He noted                                                                       
that their concerns were satisfied by the absence of the                                                                        
address. He observed that the language is permissive. The                                                                       
department has the discretion to deny the information.                                                                          
                                                                                                                                
Co-Chair Therriault observed that the department would set                                                                      
up a process through regulation that would allow the                                                                            
custodial parent to request that the information be                                                                             
withheld.                                                                                                                       
                                                                                                                                
Representative Grussendorf asked where the burden of proof                                                                      
rests. Mr. Pauley stated that the burden of proof issue was                                                                     
not addressed. He anticipated that the Division of Motor                                                                        
Vehicles and school districts would make individual policy.                                                                     
He stressed that the intent is to create the right in                                                                           
statute. He observed that there is discretion in how the                                                                        
information is provided.                                                                                                        
                                                                                                                                
Representative J. Davies noted that flagging records seems                                                                      
to be limited to missing children. Mr. Pauley agreed and                                                                        
added that the flag would trigger an alert and the                                                                              
Department of Public Safety would be notified.                                                                                  
                                                                                                                                
ROBERT BUTTCANE, YOUTH CORRECTIONS, DEPARTMENT OF HEALTH AND                                                                    
SOCIAL SERVICES testified in support of SB 27. He referred                                                                      
to section 2 on page 2, line 9. He observed that the                                                                            
department attempts to cooperate with schools districts. The                                                                    
department notifies schools of issues of delinquencies that                                                                     
raise concerns for the safety of students and staff. He                                                                         
maintained that the system is working fairly well and that                                                                      
schools are being notified. However, records are not always                                                                     
transferred with students that relocate. He observed that                                                                       
the legislation corrects this by requiring schools to make                                                                      
sure that safety alert information (specifically as it                                                                          
relates to felony or weapons offenses) is transferred from                                                                      
one school to the next.                                                                                                         
                                                                                                                                
Vice-Chair Bunde asked if there were comments from the                                                                          
Division of Motor Vehicles regarding their ability to                                                                           
release or not release information under section 3. Mr.                                                                         
Pauley stated that the Division has not commented on section                                                                    
3. He clarified that they have shown support for the ability                                                                    
to disclose information to the parents. The Department of                                                                       
Public Safety supports the language.                                                                                            
                                                                                                                                
Representative Foster MOVED to report CSSB 27 (FIN) out of                                                                      
Committee with the accompanying fiscal notes. There being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSSB 27 (FIN) was REPORTED out of Committee with a "do pass"                                                                    
recommendation and with a zero fiscal note by the Department                                                                    
of Administration dated 2/25/99; and a fiscal impact note by                                                                    
the Department of Education dated 2/25/99.                                                                                      
HOUSE BILL NO. 209                                                                                                              
                                                                                                                                
"An Act amending the size of grants for which the                                                                               
Alaska Science and Technology Foundation must allocate                                                                          
at least 50 percent of endowment income and amending                                                                            
the maximum amount of the grant that the Alaska Science                                                                         
and Technology Foundation may award for development of                                                                          
the Kodiak launch complex and Fairbanks satellite                                                                               
ground station space park; and providing for an                                                                                 
effective date."                                                                                                                
                                                                                                                                
JAMES KENWORTHY, PHD, EXECUTIVE DIRECTOR, ALASKA SCIENCE AND                                                                    
TECHNOLOGY FOUNDATION, DEPARTMENT OF COMMERCE AND ECONOMIC                                                                      
DEVELOPMENT testified in support of HB 209. He explained                                                                        
that the legislation would make changes to AS 37.17, which                                                                      
governs the Alaska Science and Technology Foundation (ASTF).                                                                    
It raises the amount of funds that ASTF can spend on                                                                            
projects that are more than $100 thousand dollars. Current                                                                      
statutes require that 50 percent of ASTF grants be for                                                                          
projects under $100 thousand dollars. The legislation would                                                                     
increase the number of projects over $100 thousand dollars                                                                      
by changing $100 to $250 thousand dollars. He emphasized                                                                        
that large and small projects do not crowd each other out.                                                                      
Projects are funded based on their ability to meet technical                                                                    
and economic criteria. They are not funded based on size.                                                                       
                                                                                                                                
The second change to the statute would allow ASTF to fund                                                                       
the $5 million dollars in construction costs needed to                                                                          
complete the Kodiak Launch Complex. He noted that ASTF has                                                                      
agreed to complete the capital cost of the Kodiak Launch                                                                        
Complex. Their current statute only allows them to spend up                                                                     
to $5 million dollars. Statutory authorization for $11                                                                          
million dollars is needed.                                                                                                      
                                                                                                                                
Representative Austerman noted that the complex must be                                                                         
completed before newly acquired private launches can take                                                                       
place. He spoke in support of the legislation.                                                                                  
                                                                                                                                
Representative J. Davies MOVED to report out of Committee                                                                       
with the accompanying fiscal note.                                                                                              
                                                                                                                                
Mr. Kenworthy noted that there would be no general fund                                                                         
impact. The funding would come from endowment earnings. He                                                                      
noted that there were extra high earnings this year as a                                                                        
result of the performance of the permanent fund.                                                                                
                                                                                                                                
Vice-Chair Bunde pointed out that the funding is technically                                                                    
general funds.                                                                                                                  
                                                                                                                                
There being NO OBJECTION, HB 209 was reported out of                                                                            
Committee.                                                                                                                      
                                                                                                                                
HB 209 was REPORTED out of Committee with "no                                                                                   
recommendation" and a zero fiscal note by the Department of                                                                     
Commerce and Economic Development.                                                                                              
HOUSE BILL NO. 157                                                                                                              
                                                                                                                                
"An Act relating to absences from the state while                                                                               
serving on oceangoing vessels of the United States                                                                              
merchant marine for purposes of eligibility for                                                                                 
permanent fund dividends; and providing for an                                                                                  
effective date."                                                                                                                
                                                                                                                                
REPRESENTATIVE JERRY SANDERS, SPONSOR spoke in support of HB
157. He noted that there are several merchant mariners in                                                                       
Alaska who do not receive the permanent fund dividend even                                                                      
though they live and maintain a residence in Alaska. He gave                                                                    
examples of mariners who live in Alaska. He noted that the                                                                      
number of people that the bill would affect is small.                                                                           
                                                                                                                                
Representative J. Davies questioned why Peace Corps                                                                             
volunteers were not included. Representative Sanders                                                                            
responded that the intent was to keep the legislation narrow                                                                    
to increase its chances of passage.                                                                                             
                                                                                                                                
Representative Austerman expressed support for the                                                                              
legislation but questioned the number of permanent fund                                                                         
dividend exceptions. He asked if a merchant marine serves on                                                                    
a vessel that does not dock in Alaska if they would receive                                                                     
the permanent fund dividend.                                                                                                    
                                                                                                                                
HAROLD HOLTON, REPRESENTATIVE, SEAFARERS INTERNATIONAL                                                                          
UNION, ANCHORAGE stated that if a merchant marine sailed off                                                                    
and did not return for two or three years they would not be                                                                     
considered a resident. He stressed that the Alaskan merchant                                                                    
marine jobs are very unique. The important issue is where                                                                       
mariners reside when they are off the ship.                                                                                     
                                                                                                                                
Co-Chair Therriault observed that the exception states:                                                                         
"serving under foreign or coastal articles of employment                                                                        
aboard an oceangoing vessel of the United States merchant                                                                       
marine." He observed that the individual that has a home in                                                                     
Valdez might or may not come home when he is off the ship.                                                                      
Mr. Holton stated that it is the intent to allow Alaskans to                                                                    
accept jobs. He showed members a video overview of their                                                                        
training program in Piney Point, Maryland.                                                                                      
                                                                                                                                
Mr. Holton provided members with written testimony:                                                                             
                                                                                                                                
I was born in Ketchikan, raised in Ketchikan,                                                                                   
Petersburg, and Juneau, upon my completion of 6 years                                                                           
in the Marine Corps, I came back to Alaska and became a                                                                         
state trooper for a short period of time. I was a                                                                               
Salmon tender captain for 15 years, before becoming a                                                                           
union rep.                                                                                                                      
                                                                                                                                
The Seafarers opened an office in Anchorage, almost 2                                                                           
years ago to the day. Our objective is to recruit                                                                               
Alaskans to go to our unlicensed apprenticeship program                                                                         
in Piney Point, Maryland, and give them an opportunity                                                                          
to obtain good paying jobs with good benefits when they                                                                         
complete the program.                                                                                                           
                                                                                                                                
I first became alerted to the fact that Merchant Seamen                                                                         
were being denied their permanent fund, by a Merchant                                                                           
Seaman from a different union. His name is Ross Perrine                                                                         
from Palmer, and he owns a home, has an Alaska driver's                                                                         
license, voter registration card, etc. he has been                                                                              
denied the fund since the inception. I went to one of                                                                           
our ships, and found that a boatswain on the Tote ship                                                                          
Northern Lights has also experienced the same problems.                                                                         
His name is John Glenn and he will be testifying this                                                                           
afternoon.                                                                                                                      
                                                                                                                                
My recruiting effort has taken me around a lot of the                                                                           
state, and in my interviews with young people, I seem                                                                           
to have their interest in the program until the                                                                                 
question of the Permanent Fund dividend comes up, then                                                                          
I am told they are no longer interested. I thought to                                                                           
myself and have shared this view, that these people                                                                             
seemed awfully shortsighted, until I really thought                                                                             
about it, this is probably the only steady money. They                                                                          
have ever seen, and are reluctant to let it go under                                                                            
any circumstance.                                                                                                               
                                                                                                                                
One of our recent graduates (Jessie Sharp) who will                                                                             
testify this afternoon, that already this year he has                                                                           
been denied the Permanent Fund dividend                                                                                         
                                                                                                                                
These merchant seaman being denied, does not have a                                                                             
choice when they sail, as to whether they can sail in                                                                           
Alaska or not. Sailing is based on a seniority system,                                                                          
and believe it or not, our Alaska routes, are in high                                                                           
demand. The ones that have the Alaska routes Ross and                                                                           
John are denied because they are not physically in                                                                              
state a minimum of 180 days.                                                                                                    
                                                                                                                                
All of our Alaskans have been accepted to Piney Point                                                                           
because they are Alaska residents. I would hate to                                                                              
discourage good young people, (short sighted as they                                                                            
may be) from enjoying such a career opportunity.                                                                                
                                                                                                                                
Right now we have 18 Alaskans who have graduated from                                                                           
Piney Point, and we presently have 2 in school. Besides                                                                         
the 18 graduates, we have created a Riding Maintenance                                                                          
gang. These merchant seaman go on oil tankers and do                                                                            
preventative maintenance. We hired 10 Riding gang a                                                                             
year ago, and all have done an outstanding job. When                                                                            
they have a year of sea time, they will be sent back to                                                                         
Piney Point and upgraded to Able-bodied seaman. We will                                                                         
start training and working a new crew. This crew                                                                                
averages $3,200.00 per month, with full benefits. Two                                                                           
of these Merchant Seaman have recently put money down                                                                           
on homes in the Wasilla area. They also will be denied                                                                          
their Permanent Fund dividend.                                                                                                  
                                                                                                                                
An article in the Anchorage news recently the 12th did                                                                          
an article on our first native Alaskan. This has                                                                                
generated such a positive response it is hard for me to                                                                         
keep up with it. The first day generated about 20 phone                                                                         
calls, and yesterday I received 71 inquires. This has                                                                           
resulted in 6 tests being given Monday, and 6 more done                                                                         
on Friday. Plus 2 in Soldotna, 1 in Anchor Point, 2 in                                                                          
Kodiak, 2 in Ketchikan, and several from Willow. These                                                                          
numbers are candidates that are qualified.                                                                                      
                                                                                                                                
In my estimation, we are not talking about any more                                                                             
than 200 Merchant Seaman over a ten-year Period.                                                                                
                                                                                                                                
Representative J. Davies summarized that mariners working in                                                                    
other seas would still have to maintain an Alaskan                                                                              
residency. Co-Chair Therriault asked if consideration was                                                                       
given to restricting the legislation to individuals sailing                                                                     
from Alaskan ports.                                                                                                             
                                                                                                                                
(Tape Change, HFC 99 - 114, Side 2)                                                                                             
                                                                                                                                
Mr. Holton stated that there are individuals that do sail                                                                       
out of Anchorage. He pointed out that they would ship out of                                                                    
Alaska regardless of where they sail. Representative Sanders                                                                    
stressed that they have to fulfill the other resident                                                                           
requirements.                                                                                                                   
                                                                                                                                
Representative Austerman noted that they could be gone for                                                                      
up to two years. He observed that the intent is to cover                                                                        
individuals that are residents and are dispatched out of                                                                        
Alaska to do a job for four months to be eligible for their                                                                     
permanent fund dividend.                                                                                                        
                                                                                                                                
Mr. Holton clarified that there are not enough Alaskans to                                                                      
ship out of Alaska. He observed that graduates ship out of                                                                      
Piney Point when their training is finished. He anticipates                                                                     
that there will eventually be an Alaskan dispatch hall.                                                                         
                                                                                                                                
Representative Austerman expressed surprise that the                                                                            
legislation did not reference shipping out of Alaska. Mr.                                                                       
Holton stated that he would not be adverse to an amendment                                                                      
to tighten the language.                                                                                                        
                                                                                                                                
Representative J. Davies questioned if "dispatched" out of                                                                      
Alaska would be an appropriate qualifier. Mr. Holton stated                                                                     
that it would be an appropriate qualifier.                                                                                      
                                                                                                                                
JOHN GLENN, SEAMAN, ANCHORAGE testified via teleconference                                                                      
in support of the legislation. He stated that he has been                                                                       
denied the permanent fund dividend. He observed that many                                                                       
ferry workers receive permanent fund dividends. He stated                                                                       
that he feels like a second class citizen, while everything                                                                     
he does is in Alaska.                                                                                                           
                                                                                                                                
EDEN LATTA, MERCHANT MARINE, ANCHORAGE testified via                                                                            
teleconference in support of the legislation. He noted that                                                                     
he is a graduate from the Piney Point program. He was also                                                                      
denied his permanent fund dividend. He stressed that he                                                                         
lives in Alaska when he is off of the ship and meets other                                                                      
residency requirements.                                                                                                         
                                                                                                                                
In response to a question by Representative Austerman, Mr.                                                                      
Latta stated that he has been a merchant marine since 1997.                                                                     
He has left Alaska twice as a merchant marine.                                                                                  
                                                                                                                                
JOY TUCKER, ANCHORAGE testified via teleconference in                                                                           
support of the legislation. He noted that her husband works                                                                     
as a merchant marine. She stressed that they live in Alaska                                                                     
and he returns home when he is off of the ship.                                                                                 
                                                                                                                                
DEBORAH VOGT, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE                                                                        
provided information on the legislation. She emphasized that                                                                    
the list of allowable absences does not include all                                                                             
Alaskans. She observed that the legislature has identified                                                                      
Alaskans that qualify. She noted that there are inequities.                                                                     
The commissioner has been allowed to include individuals                                                                        
that demonstrated their intent to return. The provision was                                                                     
difficult to administer. The department adopted the 180-day                                                                     
absence provision as an alternative. She noted that the                                                                         
commissioner's discretion was removed during the prior                                                                          
session. She stated that the proposed exemption is clear and                                                                    
would not be difficult to administer. She noted that the                                                                        
intent would be to support individuals that do remain in                                                                        
Alaska and whose families remain in Alaska.                                                                                     
                                                                                                                                
Representative J. Davies questioned if the department would                                                                     
support "dispatched out of Alaska". She stated that the                                                                         
department would not object to the addition.                                                                                    
                                                                                                                                
Mr. Vogt explained that the two-year return rule requires                                                                       
that Alaskans return to the state within two years for a                                                                        
minimum of 72 hours. She added that if an individual is gone                                                                    
for over five years there would be a presumption that there                                                                     
is not an intention to remain in the state. Individuals can                                                                     
demonstrate to the contrary. Another provision that will go                                                                     
into effect in the current year would prevent a continuous                                                                      
absence for more than 10 years for any reason.                                                                                  
                                                                                                                                
Representative Austerman noted that military personal who                                                                       
come to Alaska register as an Alaskan resident and continue                                                                     
to get the permanent fund dividend after they transfer, as                                                                      
long as they return within two years for a minimum of 72                                                                        
hours. After five years they would be ineligible. Ms. Vogt                                                                      
clarified that they would be presumed ineligible unless they                                                                    
affirmatively prove that they have substantial ties to the                                                                      
state. Military spouses are also eligible.                                                                                      
                                                                                                                                
In response to a question by Representative J. Davies, Ms.                                                                      
Vogt noted that the definition of "state resident" in AS                                                                        
43.23.005 is modified by AS 43.23.095:                                                                                          
                                                                                                                                
"state resident" means an individual who is physically                                                                          
present in the state with the intent to remain                                                                                  
indefinitely in the state under the requirements of AS                                                                          
01.10.055 or, if the individual is not physically                                                                               
present in the state, intends to return to the state                                                                            
and remain indefinitely in the state under the                                                                                  
requirements of AS 01.10.055:                                                                                                   
                                                                                                                                
(a) A person establishes residency in the state by                                                                              
being physically present in the state with the intent                                                                           
to remain in the state indefinitely and to make a home                                                                          
in the state.                                                                                                                   
                                                                                                                                
(b) A person demonstrates the intent required under (a)                                                                         
of this section                                                                                                                 
                                                                                                                                
(1) by maintaining a principal place of abode in the                                                                            
state for at least 30 days or for a longer period if a                                                                          
longer period is required by law or regulation; and                                                                             
                                                                                                                                
(2) by providing other proof of intent as may be                                                                                
required by law or regulation, which may include proof                                                                          
that the person is not claiming residency outside the                                                                           
state or obtaining benefits under a claim of residency                                                                          
outside the state.                                                                                                              
                                                                                                                                
(c) A person who establishes residency in the state                                                                             
remains a resident during an absence from the state                                                                             
unless during the absence the person establishes or                                                                             
claims residency in another state, territory or                                                                                 
country, or performs other acts or is absent under                                                                              
circumstances that are inconsistent with the intent                                                                             
required under (a) of this section to remain a resident                                                                         
of this state.                                                                                                                  
                                                                                                                                
Ms. Vogt noted that the department looks at extenuating                                                                         
circumstances to determine if they are retaining ties to the                                                                    
state. She noted that the department looks to see if a                                                                          
person has friends or family present when the five-year                                                                         
presumption arises. She clarified that the qualifying year                                                                      
is the prior calendar year.                                                                                                     
                                                                                                                                
Representative J. Davies observed that the applicant must be                                                                    
physically present during the qualifying year or if absent                                                                      
was absent only as allowed in the exceptions.                                                                                   
                                                                                                                                
NANCI JONES, DIRECTOR, ALASKA PERMANENT DIVIDEND DIVISION,                                                                      
DEPARTMENT OF REVENUE pointed out that the trainees were not                                                                    
denied because they were away at training. Training is an                                                                       
allowable absence. They were denied because the did not                                                                         
return after the training.                                                                                                      
                                                                                                                                
In response to a question by Representative Moses, Ms. Vogt                                                                     
noted that on the 1998 permanent fund dividend there were                                                                       
4,419 armed forces absent from the state. There were also                                                                       
2,100 spouses and 4,600 children accompanying an Alaskan                                                                        
resident who was eligible for a permanent fund dividend.                                                                        
                                                                                                                                
Representative J. Davies MOVED to insert on page 2, line 2                                                                      
"dispatched out of Alaska and." Representative G. Davis                                                                         
OBJECTED for the purpose of discussion.  He questioned if                                                                       
the definition of "dispatched" would be problematic.                                                                            
Representative Sanders stated that he did not oppose the                                                                        
amendment but did not think it was necessary. Ms. Vogt                                                                          
stated that the department would work with the union to                                                                         
define "dispatch" through regulation. She did not think                                                                         
there would be a difficulty.                                                                                                    
                                                                                                                                
Representative Moses pointed out that a person could be                                                                         
dispatched out of the state without being present in the                                                                        
state. Ms. Vogt emphasized that the department would look at                                                                    
where the applicant spent their time. Representative G.                                                                         
Davis did not think the amendment was necessary.                                                                                
                                                                                                                                
Representative J. Davies stated that the intent is to                                                                           
encourage opportunities for Alaskans. He stressed that it                                                                       
would provide an incentive for an Alaskan office.                                                                               
Representative Sanders pointed out that some merchant                                                                           
mariners do not belong to the union. He questioned if there                                                                     
would be a problem for non-union mariners. Representative J.                                                                    
Davies WITHDREW his amendment.                                                                                                  
                                                                                                                                
Co-Chair Therriault recalled a situation with one of his                                                                        
constituents. In response to comments by Co-Chair                                                                               
Therriault, Ms. Vogt stated that the merchant marine list is                                                                    
a definite list. She observed that there are other people                                                                       
that are not on the merchant marine list that work outside                                                                      
of Alaska for employment. She noted that other legislation                                                                      
was offered to pay Alaskans that work outside of the state.                                                                     
The department had trouble with that legislation because it                                                                     
is hard to tell if an employee is required by their employer                                                                    
to leave the state. It would be hard to administer because                                                                      
the lines are "fuzzy". Co-Chair Therriault observed that                                                                        
congressional staff receives permanent fund dividends if                                                                        
they work in the congressional legislator's office but not                                                                      
if they work for the committee chaired by the Alaskan                                                                           
member.                                                                                                                         
                                                                                                                                
Representative Moses noted that there are a significant                                                                         
number of people living out of the state and collecting the                                                                     
permanent fund dividend.                                                                                                        
                                                                                                                                
Representative Austerman stressed that individuals make                                                                         
lifestyle choices. He expressed concern with the number of                                                                      
exceptions. Co-Chair Therriault echoed his concerns.                                                                            
Representative J. Davies stressed that there are equity                                                                         
issues. He pointed out that there has to be a good public                                                                       
interest reason for treating Alaskans differently. He                                                                           
maintained that people should qualify if they meet the                                                                          
resident requirements.                                                                                                          
                                                                                                                                
Representative G. Davis MOVED to report HB 157 out of                                                                           
Committee with the accompanying fiscal note. There being NO                                                                     
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
HB 157 was REPORTED out of Committee with a "do pass"                                                                           
recommendation and with a zero fiscal note by the Department                                                                    
of Revenue dated 4/16/99.                                                                                                       
ADJOURNMENT                                                                                                                     
                                                                                                                                
The meeting adjourned at 4:35 p.m.                                                                                              
House Finance Committee 1 4/15/99                                                                                               

Document Name Date/Time Subjects