Legislature(1997 - 1998)
01/30/1997 01:37 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
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HOUSE FINANCE COMMITTEE
January 30, 1997
1:37 P.M.
TAPE HFC 97-15, Side 1, #000 - end.
TAPE HFC 97-15, Side 2, #000 - end.
TAPE HFC 97-16, Side 1, #000 - #126.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 1:37 p.m.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Foster Representative Mulder
Representative Grussendorf
ALSO PRESENT
Mark Boyer, Commissioner, Department of Administration; Ron
Otte, Commissioner, Department of Public Safety; Bo
Brownfield, Deputy Director, Department of Transportation
and Public Facilities; Del Smith, Deputy Commissioner,
Department of Public Safety; Nicole Poirrier, Staff,
Representative Kott; Nanci Jones, Director, Permanent Fund
Dividend Division.
SUMMARY
HB 2 "An Act allowing, for the purposes of permanent
fund dividend eligibility, an individual to
accompany, as the spouse or minor or disabled
dependent, another eligible resident who is absent
for any of the following reasons: vocational,
professional, or other specific education for
which a comparable program is not reasonably
available in the state; secondary or postsecondary
education; military service; medical treatment;
service in the Congress or in the peace corps; to
care for the individual's terminally ill parent,
spouse, sibling, child, or stepchild; for up to
220 days to settle the estate of the individual's
deceased parent, spouse, sibling, child, or
stepchild; to care for a parent, spouse, sibling,
child, or stepchild with a critical
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life-threatening illness whose treatment plan, as
recommended by the attending physician, requires
travel outside of the state for treatment at a
medical specialty complex; or other reasons that
the commissioner of revenue may establish by
regulation; requiring, for the purposes of
permanent fund dividend eligibility, a state
resident to have the intent to remain
indefinitely; relating to the eligibility for
1992, 1993, 1994, 1995, 1996, and 1997 permanent
fund dividends of certain spouses and dependents
of eligible applicants; and providing for an
effective date."
CSHB 2 (FIN) was reported out of Committee with a
"do pass" recommendation and with a fiscal impact
note by the Department of Revenue.
EO 98 Transferring commercial highway-related functions
from the Department of Commerce and Economic
Development and the Department of Public Safety to
the Department of Transportation and Public
Facilities.
EO 98 was HELD in Committee for further
consideration.
EO 99 Transferring the responsibility for the
administration of most of the statutes in AS 28,
regarding motor vehicles, and other statutory
functions relating to motor vehicles and other
vehicles, from the Department of Public Safety to
the Department of Administration.
EO 99 was HELD in Committee for further consideration.
HOUSE BILL NO. 2
"An Act allowing, for the purposes of permanent fund
dividend eligibility, an individual to accompany, as
the spouse or minor or disabled dependent, another
eligible resident who is absent for any of the
following reasons: vocational, professional, or other
specific education for which a comparable program is
not reasonably available in the state; secondary or
postsecondary education; military service; medical
treatment; service in the Congress or in the peace
corps; to care for the individual's terminally ill
parent, spouse, sibling, child, or stepchild; for up to
220 days to settle the estate of the individual's
deceased parent, spouse, sibling, child, or stepchild;
to care for a parent, spouse, sibling, child, or
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stepchild with a critical life-threatening illness
whose treatment plan, as recommended by the attending
physician, requires travel outside of the state for
treatment at a medical specialty complex; or other
reasons that the commissioner of revenue may establish
by regulation; requiring, for the purposes of permanent
fund dividend eligibility, a state resident to have the
intent to remain indefinitely; relating to the
eligibility for 1992, 1993, 1994, 1995, 1996, and 1997
permanent fund dividends of certain spouses and
dependents of eligible applicants; and providing for an
effective date."
Representative Davies MOVED to adopt Amendment 1 (copy on
file). He explained that the amendment would change
"indefinitely" to "permanently". He observed that
"permanently" is in current statutes. He maintained that
the meaning of "indefinite" as defined by Black's Law
Dictionary, has the connotation of temporary. He stressed
that "permanent" has the connotation of lasting for a long
time. He pointed out that the original legislative intent
was to provide dividends based on an individual's longevity
in the State of Alaska.
Representative Martin spoke against the amendment. He
maintained that "permanent" is too limiting. He alleged
that it is almost unconstitutional to require that, because
the State of Alaska is going to give a person a gift,
residents must guarantee that they want to remain
permanently in Alaska. He pointed out that circumstances
change. Job opportunity, marriage or military service can
cause a change in residency.
Representative Mulder spoke in opposition to the amendment.
He acknowledged the emotional appeal of using "permanent".
He stated that he would like to say that the dividend is
only going to be paid to "real Alaskans," that are going to
be here forever. He emphasized that times and conditions
change and unforeseen things can happen in the future. He
maintained that the Division has been very stringent about
who should and should not receive the dividend.
Representative Kott maintained that "indefinitely" has the
connotation of not having the intention of leaving. He
pointed out that the Division requested the use of
"indefinitely".
NANCI JONES, DIRECTOR, PERMANENT FUND DIVIDEND DIVISION
stated that the change to "indefinitely" is consistent with
the Division's philosophy that a person cannot be held in
Alaska forever. She noted that at the time a person signs
their dividend they pledge their intent to remain in Alaska
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between January and March 31st of the year. She questioned
if a person decides to change residency or seek a change of
residency after March 31st, should they recall their
application. She maintained that "permanently" does not
exist. She pointed out that guidelines still apply for the
year and a day of required residency.
Co-Chair Hanley quoted from Black's Law Dictionary,
"indefinite contemplates that condition will end at an
unpredictable time, whereas permanent does not contemplate
that condition will cease to exist." He asked how many
appeals the Division would deny or accept based on the
change.
Ms. Jones stated that the Division would allow more people
under the change to "indefinitely". She stressed that there
would be less appeals. She maintained that "permanently" is
more restrictive than the actual statute that governs the
definition of a state resident.
Representative Grussendorf spoke in support of the
amendment. He stressed that a seasonal worker is here
indefinitely, based on the length of the season or job.
Co-Chair Therriault asked if there is a compelling reason
for the use of "indefinitely".
Ms. Jones stressed that guidelines require that a person
have residency ties such as checking accounts, voter's
registration, or children in school. She pointed out that
the area of dispute comes after the individual has met
residency obligations for a period of time and things beyond
their control result in a change in residency. The Division
then reassess their application based on their intent to
stay at the time the application was filed. She spoke in
support of "indefinitely". She maintained that there is a
difference in substance versus form.
Representative Martin observed that statutes require a
person to establish residency by being physically present
in the State with the intent to make a home.
In response to a question by Co-Chair Therriault, Ms. Jones
noted that the Division receives calls regarding applicants
that have moved or intend to move out of state. If a person
leaves the State after their application is filed, but
before the distribution of the dividend, their dividend will
be denied. These cases are appealed based on the argument
that at the time of the application the applicant had no
intention of leaving the State and met the residency
requirements.
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Co-Chair Hanley summarized that the individual that has met
the residency requirements during the previous year but
moves after the application period would be denied under the
definition of "permanently" but not under "indefinitely".
Representative Davies noted that "intend" is used in
statutes referring to the Permanent Fund Dividend and basic
residency requirements. He argued that the key question
hinges on, at the time the application was filed, did the
applicant intend to remain a resident of the State of
Alaska. He pointed out that the applicant must be a
resident at the time of the application and that being a
resident includes the intent to make a home in the State.
He maintained that it is appropriate for the Permanent Fund
Dividend Statute to have additional or different tests for
residency. He maintained that the question is whether the
applicant's actions were consistent with a genuine intent to
remain in Alaska.
Representative Martin reiterated that "permanent" is too
restrictive. He stressed that citizens are free to
participate in the nation.
Representative Davis spoke in support of the amendment. He
pointed out that the Permanent Fund Dividend Application
questions if applicants "intend to remain an Alaska resident
permanently".
Representative Martin questioned if long term residents that
may want to return to their birth place in their later years
should be required to refund dividends received during their
residency.
Representative Kott stressed that "permanently" is used in
the application because it is part of the law. He noted
that "indefinitely" was used on applications from 1992 -
1995. "Indefinitely" was changed in 1996 to "permanently".
Representative Davies emphasized that an applicant's
activities during the period they certify that they intend
to remain determine eligibility. He maintained that if
their actions, at that time, are inconsistent with the
certification they should be denied.
A roll call vote was taken on the MOTION to adopt Amendment
1.
IN FAVOR: Davies, Davis, Grussendorf, Hanley, Therriault
OPPOSED: Foster, Kelly, Kohring, Martin, Moses, Mulder
The MOTION FAILED (5-6).
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Co-Chair Therriault MOVED to adopt Amendment 2 (copy on
file). He noted that the Committee discussed narrowing the
scope of persons that can make applications for past
dividends, to those that actually filled out applications on
a yearly basis. Amendment 2 would limit eligibility to
applicants that applied for the prior year dividend. He
pointed out that applicants, who were absent while
accompanying an eligible Alaska resident, were notified that
they should apply for a dividend.
In response to a question by Representative Davies, Ms.
Jones noted that applicants were allowed absences while
accompanying an eligible spouse from 1992 - 1995. In 1995,
applicants were denied for absences while accompanying their
eligible spouse. A separate letter was sent to these
applicants which encouraged them to file. The were also
directed to file on the 1996 and 1997 applications. She
added that another letter was sent after HB 4 was defeated
encouraging them to keep applying. The court case that
disallowed the absence was December 16, 1993. Applicants
whose applications were under review or appeal for other
reasons were affected by the court case. Only 25 applicants
were not paid their 1992 dividend due to the court case. In
1993, while the actual court case was pending, the majority
of those that applied were paid. The first year that all of
these applicants were denied was 1994. She noted that there
has always been an indicator on the application for
applicants that were absent while accompanying an eligible
Alaska resident.
Representative Kott reiterated that 25 applicants were not
paid their 1992 dividend while absent accompanying an
eligible spouse. Their applications were under appeal for
reasons other than their absence while accompanying an
eligible Alaska resident. The Department of Law determined
that they would not try to collect from those that received
dividends in 1992 while accompanying an eligible Alaskan
resident. He added that there were 1,052 applicants
affected by the court decision in 1993, 1,900 in 1994 and
1,400 in 1995.
Representative Davies provided members with a memorandum
from Tamara Cook, Director, Legislative Legal Services (copy
on file). She concluded that allowing eligibility of a
resident for a prior year dividend, that they did not
previously apply for, may result in an equal protection
challenge. Representative Davies pointed out that the
number of persons affected is relatively small. He pointed
out that the State could be open to an expensive court
challenge on behalf of a small number of people.
(Tape Change, HFC 97-15, Side 2)
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Co-Chair Therriault WITHDREW Amendment 1.
Co-Chair Hanley referred to subsection (2) on page 4, line
29. He noted that applicants that are retroactively
eligible for a 1992 -1997 dividend would be disallowed if
they are not eligible for the 1998 dividend.
Co-Chair Therriault noted that Ms. Cook could not recall a
time when past eligibility was based on present eligibility.
Representative Davies spoke in support of the deletion of
subsection (2) on page 4, line 29.
Co-Chair Hanley MOVED to delete subsection (2) on line 29,
page 4, and renumber accordingly. Co-Chair Therriault
pointed out that subsection (3) is needed to provide a stop
date. There being NO OBJECTION, it was so ordered.
Representative Davies noted the intent that no interest be
paid on the accrual.
NICOLE POIRRIER, STAFF, REPRESENTATIVE KOTT noted that
according to Ms. Cook, the Permanent Fund Dividend Division
has no statutory authority to pay interest on dividends.
She noted that interest was not paid on dividends
retroactively paid to 18 year olds for years that their
parents did not file on their behalf. In addition, the
State takes the position that this is not a valid debt. A
new right is being created for these individuals.
Representative Mulder MOVED to report CSHB 2 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 2 (FIN) was reported out of Committee with a "do pass"
recommendation and with a fiscal impact note by the
Department of Revenue.
EXECUTIVE ORDER NO. 98
Transferring commercial highway-related functions from
the Department of Commerce and Economic Development and
the Department of Public Safety to the Department of
Transportation and Public Facilities.
BO BROWNFEILD, DEPUTY DIRECTOR, DEPARTMENT OF TRANSPORTATION
AND PUBLIC FACILITIES explained that EO 98 would transfer
the Weights and Measures Division from the Department of
Commerce and Economic Development to the Department of
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Transportation and Public Facilities; and the Commercial
Trust Office from the Department of Public Safety. The
order pertains to the adjudication of oversized and
overweight vehicles on Alaskan highways. There are
presently three different departments that share
responsibility in regards to oversized and overweight
vehicles. Most of the regulations governing oversized and
overweight issues reside in the Department of Transportation
and Public Facilities. The Department of Transportation and
Public Facilities issues the regulations and oversees the
use of highways and bridges by all commercial vehicles. The
Department of Transportation and Public Facilities also has
the responsibility for the safety, condition, maintenance
and operation of highways.
Mr. Brownfield noted that the Department of Commerce and
Economic Development issues the permits for oversized and
overweight vehicles. The Division of Weights and Measures
must contact the Department of Transportation and Public
Facilities to obtain permission to issue permits. The
Department of Commerce and Economic Development also
operates 10 fixed weight stations. The stations are in and
around the national highway system. There are no fixed
stations in Southeast Alaska or in remote bush communities.
Mr. Brownfield added that the Department of Public Safety,
through their commercial vehicle program, provides safety
and secondary size and weight enforcement. The Department
of Public Safety also provides a mobile inspection force and
has the overall law enforcement authority. Because of this
arrangement there are three departments that must routinely
deal with trucking issues.
Mr. Brownfield stressed that the consolidation is supported
by all three departments, the Teamsters, and the Truckers
Association. He observed that this function has a direct
impact on Intermodal Surface Transportation Act (ISTEA)
funding. The State can be sanctioned for as much as 10
percent of the State's entire ISTEA funding if operations
are not satisfactory. He maintained that the consolidation
would increase efficiency and eliminate confusion.
Representative Martin noted that the Division of Weights and
Measures also supervises railroad and fish scales. Mr.
Brownfield noted that this function would also be
transferred to the Department of Transportation and Public
Facilities. He explained that employees would be
transferred from the Department of Commerce and Economic
Development to the Department of Transportation and Public
Facilities with the exception of the two troopers that are
in the Commercial Vehicle Section.
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DEL SMITH, DEPUTY COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY
explained that weight stations employees are hired by the
Division of Weights and Measures with the power to cite for
specific weight violations. There are 4 mobile employees in
the Department of Public Safety around the State with
enforcement powers. These 4 will remain in the Department
of Public Safety.
Representative Davies pointed out that responsibilities are
not being changed.
Representative Kohring noted that he had been contacted by
constituents in regards to staffing levels at the weight
stations. He asked if a reduction of staff would result
from the consolidation. Mr. Brownfield noted that the
intent is to stream line operations. He noted that one
position would be reduced in the Department of
Transportation and Public Facilities. This position is
currently coordinating operations between the departments.
Co-Chair Therriault noted that the Committee is not required
to take action on the Order.
EO 98 was HELD in Committee.
EXECUTIVE ORDER NO. 99
Transferring the responsibility for the administration
of most of the statutes in AS 28, regarding motor
vehicles, and other statutory functions relating to
motor vehicles and other vehicles, from the Department
of Public Safety to the Department of Administration.
RON OTTE, COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY
explained that EO 99 would transfer the Division of Motor
Vehicles from the Department of Public Safety to the
Department of Administration. He noted that the Division of
Motor Vehicle serves most Alaskans over 16 years of age.
The Division of Motor Vehicle receives approximately $56
million dollars in federal inspection funds. The Division
collects over $36 million dollars a year for the State. He
noted public frustration with long lines and waiting time at
Division of Motor Vehicle offices. He acknowledged that the
Department of Public Safety has not provided sufficient
resources and oversight to the program. He observed that
the Division has to compete with life and safety programs in
the Department of Public Safety.
MARK BOYER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION spoke
in support of the transfer. He noted that the Department of
Administration provides assistance for service delivery. He
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emphasized that the Department can provide technical
support. He maintained that the public wants fast,
efficient, convenient, cheap and easy service. He stressed
that the Department of Administration is focused on the
needs of its customers. The public will be able to transact
business with credit cards. He added that the Department is
looking into an automatized voice response system for
transactions. The Department also intends to develop an
Internet presence. Resources will be realigned to speed the
line process. He added that plate transactions for new
vehicles could take place at the dealers. He acknowledged
that approximately 35 percent of their customers will still
need to conduct business at the Division.
Co-Chair Therriault questioned if the Division will remain
in the Department of Public Safety building in Fairbanks.
Commissioner Otte stated that the Division's operations will
remain in their current locations. Rural offices are
sometimes operated by contract.
Representative Grussendorf pointed out that the Department
of Transportation and Public Facilities will not have the
Division's program receipts in their budget.
Representative Martin cautioned that program receipt
authorization will have to go through the Legislative Budget
and Audit Committee during the interim. He stressed that
projects should be authorized by the Legislature prior to
implementation.
Representative Davies questioned if credit card costs will
be recovered. Commissioner Boyer stressed that the cost of
handling cash is 3.13 percent per dollar. Checks run 3.06
percent per dollar. Credit card processing costs 2.4
percent per dollar. He emphasized that the intent is to
gain efficiencies for re-deployment of the resources. He
added that peaks in demand will be leveled. He did not
anticipate any new capital requirements. He stressed the
Department's intent to net back the cost of the
transactions.
(Tape Change, HFC 97-16, Side 1)
Commissioner Boyer maintained that the cost of doing
business will be less. He reiterated that the public
expects to transact business in a manner that is fast,
right, cheap and easy. He alleged that without the transfer
there will be longer lines. He estimated that improvements
could be made without additional capital over the next 18
months.
Representative Davies referred to the Governor's transmittal
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letter (copy on file). He noted that another function being
transferred is the counseling of drivers. Commissioner
Boyer emphasized that policy is not being shifted with the
transfer.
JUANITA HENSLEY, CHIEF DRIVER SERVICES, DIVISION OF MOTOR
VEHICLES, DEPARTMENT OF PUBLIC SAFETY explained that the
Division is composed of Field Services and Driver Services.
Driver Services deal with maintenance of driving records,
suspension and revocation of licenses and driver counseling.
The Driver's Improvement Office is in the Driver Services
component. This unit counsels drivers in order to rectify
bad driving habits and conduct administrative hearings for
drunk driving arrests. Driver Services would be included in
the transfer.
EO 99 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 3:18 p.m.
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