Legislature(2011 - 2012)HOUSE FINANCE 519
04/04/2012 09:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB190 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 190 | TELECONFERENCED | |
| + | HB 312 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 4, 2012
9:18 a.m.
9:18:15 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 9:18 a.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Joe Michel, Staff, Representative Bill Stoltze;
Representative Eric Feige, Sponsor; Michael Paschall,
Staff, Representative Eric Feige; Debbie Bitney, Director,
Permanent Fund Dividend Division, Department of Revenue.
SUMMARY
HB 190 PFD ALLOWABLE ABSENCE
HB 190 was HEARD and HELD in Committee for
further consideration.
HB 312 NATURAL GAS CONVERSION PROGRAM/FUND
HB 312 was SCHEDULED but not HEARD.
HOUSE BILL NO. 190
"An Act relating to the allowable absence for active
duty service members of the armed forces for purposes
of permanent fund dividend eligibility."
9:18:28 AM
Vice-chair Fairclough MOVED to ADOPT proposed committee
substitute for HB 190, Work Draft 27-LS0564\S (Kirsch,
3/28/12).
Co-Chair Stoltze OBJECTED for discussion.
JOE MICHEL, STAFF, REPRESENTATIVE BILL STOLTZE, stated that
there was one change in the work draft. He looked at page
1, line 5, which removed Section C. He added that on page
4, line 15, Section C was repealed. He remarked that the
members' packets included some statutes that stated the
original version of Section C.
Co-Chair Stoltze understood that the removal of Section C
made it easier to administer the program. Mr. Michel
agreed.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft 27-LS0564\S was ADOPTED.
9:20:16 AM
REPRESENTATIVE ERIC FEIGE, SPONSOR, explained the
legislation. He stated that the bill ensured that residents
of Alaska who decide to serve in the military would receive
the PFD throughout their entire time in the military. He
stated that, in statute, the "intent to return" had been
more clearly defined, and the qualifications of an
applicant to satisfy the intent to return to Alaska.
Authorized absences were already listed, and there would be
no change. He stated that Section 2 outlined what had been
previously in regulation, and was now in statute. He stated
that Section 3 repealed the "10-year-rule." He explained
that after 5 years, tightening of requirements would "knock
down" a significant number of applicants. He furthered that
after 10 years, there would be a slowly diminishing number
of applicants, because of the stricter requirements
relating to "the intent to return."
9:24:00 AM
MICHAEL PASCHALL, STAFF, REPRESENTATIVE ERIC FEIGE,
provided a presentation titled "Permanent Fund Dividend
Allowable Absences" (copy on file). He looked at slide 2,
"Allowable Absence 1982."
Sec. 43.23.095. Definitions.
-(7) "state resident" means an individual who is
physically present in the state with the intent to
remain permanently in the state or, if the individual
is not physically present in the state, intends to
return to the state and is absent only for any of the
following reasons:
- (A) vocational, professional, or other specific
education for which a comparable program was not
reasonably available in the state;
- (B) secondary or postsecondary education;
- (C) military service;
- (D) medical treatment;
- (E) service in Congress; or
- (F) other reasons which the commissioner may
establish by regulation
Mr. Paschall addressed slides 2 and 3, "Allowable Absence
1997."
Sec. 43.23.095. Definitions.
-(8) "state resident" means an individual who is
physically present in the state with the intent to
remain permanently 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 permanently in the state under
the requirements of AS 01.10.055, and is absent only
for any of the following reasons:
- (A) vocational, professional, or other specific
education for which a comparable program was not
reasonably available in the state;
- (B) secondary or postsecondary education;
- (C) military service;
- (D) medical treatment;
- (E) service in Congress;
- (F) other reasons which the commissioner may
establish by regulation;
- (G) service in the Peace Corps;
- (H) to care for the individual's terminally ill
parent, spouse, sibling, child, or stepchild;
- (I) for up to 220 days to settle the estate of the
individual's deceased parent, spouse, sibling, child,
or stepchild; or
- (J) to care for a parent, spouse, sibling, child, or
stepchild with a critical life-threatening illness
whose treatment plan, as recommended by the attending
physician, requires travel outside the state for
treatment at a medical specialty complex;
Sec. 01.10.055. Residency.
-(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.
Mr. Paschall discussed slides 5 through 10, "Allowable
Absence 1998."
Sec. 43.23.095. Definitions.
- (7) "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;
Co-Chair Stoltze pointed to a major measure in 1988
requiring the return every two years.
Representative Edgmon remarked that the definition on page
4 was not the only definition in terms of how the agencies
apply state residency.
Co-Chair Stoltze noted that there were all kinds of
residency requirements for different state programs.
9:27:12 AM
Mr. Paschall continued with the slides related to allowable
absences in 1998.
Sec. 43.23.008. Allowable absences.
- (a) Subject to (b) and (c) of this section, an
otherwise eligible individual who is absent from the
state during the qualifying year remains eligible for
a current year permanent fund dividend if the
individual was absent
- (1) receiving secondary or postsecondary education
on a full- time basis;
- (2) receiving vocational, professional, or other
specific education on a full-time basis for which, as
determined by the Alaska Commission on Postsecondary
Education, a comparable program is not reasonably
available in the state;
- (3) serving on active duty as a member of the armed
forces of the United States;
- (4) receiving continuous medical treatment
recommended by a licensed physician or convalescing as
recommended by the physician that treated the illness
if the treatment or convalescence is not based on a
need for climatic change;
- (5) providing care for a parent, spouse, sibling,
child, or stepchild with a critical life-threatening
illness whose treatment plan, as recommended by the
attending physician, requires travel outside the state
for treatment at a medical specialty complex;
- (6) providing care for the individual's terminally
ill parent, spouse, sibling, child, or stepchild;
- (7) settling the estate of the individual's deceased
parent, spouse, sibling, child, or stepchild, provided
the absence does not exceed 220 cumulative days;
- (8) serving as a member of the United States
Congress;
- (9) serving on the staff of a member from this state
of the United States Congress;
- (10) serving as an employee of the state in a field
office or other location;
- (11) accompanying a minor who is absent under (4) of
this subsection;
- (12) accompanying another eligible resident who is
absent for a reason permitted under this subsection as
the spouse, minor dependent, or disabled dependent of
the eligible resident;
- (13) for any reason consistent with the individual's
intent to remain a state resident, provided the
absence or cumulative absences do not exceed
- (A) 180 days if the individual is not claiming
an absence under (1) - (12) of this subsection;
- (B) 120 days in addition to any absence or
cumulative absences claimed under (1) or (2) of
this subsection if the individual is not claiming
an absence under (3) - (12) of this subsection;
or
- (C) 45 days in addition to any absence or
cumulative absences claimed under (1) - (12) of
this subsection.
-(b) An individual may not claim an allowable absence
under (a)(1) - (12) of this section unless the
individual was a resident of the state for at least
six consecutive months immediately before leaving
the state.
-(c) An otherwise eligible individual who has been
eligible for the immediately preceding 10 dividends
despite being absent from the state for more than 180
days in each of the related 10 qualifying years is
only eligible for the current year dividend if the
individual was absent 180 days or less during the
qualifying year. This subsection does not apply to an
absence under (a)(8) or (9) of this section or to an
absence under (a)(12) of this section if the absence
is to accompany an individual who is absent under
(a)(8) or (9) of this section.
Mr. Paschall discussed slides 11 through 16, "Allowable
Absence 2011."
Sec. 43.23.008. Allowable absences.
-(a) Subject to (b) and (c) of this section, an
otherwise eligible individual who is absent from the
state during the qualifying year remains eligible for
a current year permanent fund dividend if the
individual was absent
- (1) receiving secondary or postsecondary education
on a full-time basis;
- (2) receiving vocational, professional, or other
specific education on a full-time basis for which, as
determined by the Alaska Commission on Postsecondary
Education, a comparable program is not reasonably
available in the state;
- (3) serving on active duty as a member of the armed
forces of the United States or accompanying, as that
individual's spouse, minor dependent, or disabled
dependent, an individual who is
- (A) serving on active duty as a member of the
armed forces of the United States; and
- (B) eligible for a current year dividend;
- (4) serving under foreign or coastal articles of
employment aboard an oceangoing vessel of the United
States merchant marine;
- (5) receiving continuous medical treatment
recommended by a licensed physician or convalescing as
recommended by the physician who treated the illness
if the treatment or convalescence is not based on a
need for climatic change;
- (6) providing care for a parent, spouse, sibling,
child, or stepchild with a critical life-threatening
illness whose treatment plan, as recommended by the
attending physician, requires travel outside the state
for treatment at a medical specialty complex;
- (7) providing care for the individual's terminally
ill family member;
- (8) settling the estate of the individual's deceased
parent, spouse, sibling, child, or stepchild, provided
the absence does not exceed 220 cumulative days;
- (9) serving as a member of the United States
Congress;
- (10) serving on the staff of a member from this
state of the United States Congress;
- (11) serving as an employee of the state in a field
office or other location;
- (12) accompanying a minor who is absent under (5) of
this subsection;
- (13) accompanying another eligible resident who is
absent for a reason permitted under (1), (2), (5) -
(12), (16), or (17) of this subsection as the spouse,
minor dependent, or disabled dependent of the eligible
resident;
- (14) serving as a volunteer in the federal peace
corps program;
- (15) because of training or competing as a member of
the United States Olympic Team;
- (16) participating for educational purposes in a
student fellowship sponsored by the United States
Department of Education or by the United States
Department of State;
- (17) for any reason consistent with the individual's
intent to remain a state resident, provided the
absence or cumulative absences do not exceed
- (A) 180 days in addition to any absence or
cumulative absences claimed under (3) of this
subsection if the individual is not claiming an
absence under (1), (2), or (4) - (16) of this
subsection;
- (B) 120 days in addition to any absence or
cumulative absences claimed under (1) - (3) of
this subsection if the individual is not
claiming an absence under (4) - (16) of this
subsection but is claiming an absence under (1)
or (2) of this subsection; or
- (C) 45 days in addition to any absence or
cumulative absences claimed under (1) - (16)
of this subsection if the individual is claiming
an absence under (4) - (16) of this subsection.
-(b) An individual may not claim an
allowable absence under(a)(1) - (16) of this
section unless the individual was a
resident of the state for at least six
consecutive months immediately before
leaving the state.
-(c) An otherwise eligible individual who
has been eligible for the immediately
preceding 10 dividends despite being absent
from the state for more than 180 days in
each of the related 10 qualifying years is
only eligible for the current year dividend
if the individual was absent 180 days or
less during the qualifying year. This
subsection does not apply to an absence
under (a)(9) or (10) of this section or to
an absence under (a)(13) of this section if
the absence is to accompany an individual
who is absent under (a)(9) or (10) of this
section.
-(d) For purposes of (a)(7) of this section,
"family member" means a person who is
- (1) legally related to the individual
through marriage or guardianship; or
- (2) the individual's sibling, parent,
grandparent, son, daughter, grandson,
granddaughter, uncle, aunt, niece,
nephew, or first cousin.
Mr. Paschall looked at slide 17, "Allowable Absence after
HB 190." He stated that the statute remained that same,
except that it was now subject to (b) and (e) instead of
(b) and (c).
9:31:27 AM
Representative Joule wondered how the bill would impact
college students that took more than 5 years to graduate,
specifically students in a masters or graduate program. Mr.
Paschall replied that if a group can prove ties to Alaska,
there would be a chance for review.
Co-Chair Thomas wondered whether a person could leave the
state for 20 years in active military duty and still
receive a check. Mr. Paschall responded that after five
years residing outside the state, those individual subject
to the criteria that was placed into law, and there active
ties to the community.
Co-Chair Thomas felt that a person who owned a home in
another state they should not be eligible for a PFD. He did
not believe anyone had ever been prosecuted for leaving the
state, after they had declared an intent to return to the
state.
Co-Chair Stoltze noted that there were people that openly
stated their intent, but change their minds.
Representative Gara asked for verification that the bill
did not impact people who were out of the state caring for
a sick relative. Mr. Paschall believed the bill would
apply, and added that there were some absences that did
have time limits.
Representative Gara pointed to military and higher
education absences. He addressed the total of 30 days in
five years. A person could easily move away and come home
at Christmas to receive a PFD.
9:38:03 AM
Mr. Paschall responded that the 30 days was a minimum
requirement.
DEBBIE BITNEY, DIRECTOR, PERMANENT FUND DIVIDEND DIVISION,
DEPARTMENT OF REVENUE, asked for a repeat of the question.
Representative Gara asked about military and higher
education individuals with no intent to move back to
Alaska. He also wondered if the 30 day rule was easily
abused. Ms. Bitney responded that the 30 day requirement
was an initial hurdle; after the person had met the initial
requirement, there were additional items that needed to be
addressed: whether or not they own property in the state,
family here, involved in state politics, etc. It was
difficult to prove a person's intent, and these
requirements help determine an individual's true intent.
Representative Gara surmised that there was a gray area
related to individuals with homes outside of the state.
9:41:32 AM
Ms. Bitney stated that payment of resident taxes in another
state would be an automatic disqualifier. The division
looked at the situations very closely. She discussed that
many snowbirds owned homes elsewhere, but the division made
sure they did not pay resident taxes or benefits.
Co-Chair Stoltze noted that he had many friends in the
military, which preferred to purchase a house rather than
rent. He wondered if they would be suspect. Ms. Bitney
replied in the negative. She furthered that those
individuals must maintain that they were not receiving a
resident benefit for owning that home.
Representative Gara asked about property taxes, and stated
that the taxes were not a resident benefit, but a resident
burden. Ms. Bitney replied that the benefit was usually a
break in the property tax (e.g. a homestead benefit).
Co-Chair Stoltze wondered what kinds of things typically
trigger a review or denial. Ms. Bitney to discuss triggers
for a review or denial: registering to vote in another
state, receiving a homestead credit on property taxes,
declaring in the military records that the state of legal
residence is somewhere other than Alaska. She stressed that
"intent" was very subjective, so clear criteria was needed
to evaluate that intent properly.
Representative Joule asked whether paying state income tax
in another state was a trigger. Ms. Bitney replied that it
would be a trigger, if the tax return reflected that they
were a citizen of that state.
Representative Joule wanted to ensure that students were
not falling as victims.
Representative Joule furthered that his daughter had paid a
dear price for it, because she had not declared proper
residency out of state.
Representative Doogan wondered why the ability to receive
the money did not occur until after the person returned to
the state.
Co-Chair Stoltze noted that there had been various similar
legislative proposals related to student loan forgiveness.
Representative Doogan restated his concern about possible
cumulative dividends.
Co-Chair Stoltze noted that a 19 year-old living in
Afghanistan may have a problem with that idea.
Ms. Bitney understood, but that was not the legislation
that was before the committee.
Representative Guttenberg pointed to page 3, Section 2, and
wondered if a person's career choice to serve overseas
prevented them from receiving the PFD. Ms. Bitney answered
that the bill was not a stand-alone criteria. The bill
contained criteria in a weighted decision.
Co-Chair Thomas discussed a situation of a person who had
been in the military who received a driving ticket in
Colorado with an Alaska driver's license, so Colorado had
forced him to get a local license and the person had lost
his PFD as a result.
9:55:10 AM
Vice-chair Fairclough pointed to page 3, lines 29 through
31. She read from the bill related to future events beyond
a person's control. Mr. Paschall deferred to Ms. Bitney.
Co-Chair Stoltze wondered if that provision was an
important aspect to the bill. Representative Feige replied
that he would like to hear from the department.
Co-Chair Stoltze queried the policy direction. Ms. Britney
stated that page 3, lines 29 through 31 addressed part of
what the division finds difficult to run the program now.
She stressed that every individual's situation was
different, and felt that the specific language was not
critical to that decision making.
Vice-chair Fairclough felt that if someone could not find a
job in Alaska should not be allowed to get part of the
dividends. She felt that determining one's PFD
qualifications; there were many different factors in making
those decisions.
Representative Costello asked about intent to return // she
knew of an individual that was a fourth generation Alaskan
who was required in California to obtain residency. This
requirement was out of his control, so she wondered whether
there was a provision that would allow the department to
consider granting that individual a PFD. Ms. Bitney
responded that the division had a process when a person
checked a box that they were a resident in another state.
Once the department received the amended return, there was
a process.
Representative Costello explained that the specific person
had been required to apply as a resident in another state.
Ms. Bitney replied that there was an exemption for
individuals who were required to file for residency in
another state in the department regulation.
Representative Joule wondered if Representative Costello's
concern had always been in statute. Ms. Bitney replied that
it had been in regulation and the bill proposed to putting
it in statute.
10:03:29 AM
Representative Neuman asked whether a person that was
kicked out of the system once could use the provision to
get back into the system. Ms. Bitney answered in the
negative. She explained that the regulation was worded in a
way that the division would allow a person one time to
reapply for a dividend that they timely applied for but the
division subsequently did not receive; and it was limited
to that specific group of people. It did not apply to
individuals who did not file.
Representative Guttenberg wondered how the rebuttal worked
when a person was denied. Ms. Bitney answered that there
were two levels of appeal: (1) informal level of appeal,
(2) formal level (after the applicant had been denied a
second time). There could be more subjectivity based on the
applicant's life circumstances.
Co-Chair Stoltze CLOSED public testimony.
Co-Chair Stoltze discussed his intent to address several
issues related to career paths. He asked his staff to work
with the division, members, and the sponsor. He hoped to
have the bill before the committee in the afternoon.
HB 190 was HEARD and HELD in Committee for further
consideration.
HOUSE BILL NO. 312
"An Act creating a low-interest loan program for
homeowners who convert their homes to natural gas-
fired heating; and creating the natural gas home
heating conversion loan fund."
HB 312 was SCHEDULED but not HEARD.
Co-Chair Thomas went over the schedule for the afternoon
meeting.
ADJOURNMENT
10:11:21 AM
The meeting was adjourned at 10:11 AM.