Legislature(1993 - 1994)
01/19/1994 01:15 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
January 19, 1994
1:15 p.m.
MEMBERS PRESENT
Rep. Brian Porter, Chairman
Rep. Jeannette James, Vice-Chair, arrived later
Rep. Pete Kott
Rep. Gail Phillips
Rep. Joe Green
Rep. Cliff Davidson, arrived later
Rep. Jim Nordlund
COMMITTEE CALENDAR
Confirmation of Reappointment of SHIRLEY MCCOY to the SELECT
COMMITTEE ON LEGISLATIVE ETHICS (joint with Senate
Judiciary, taped and transcribed separately).
HB 75 "An Act relating to qualifications for permanent
fund dividends; and providing for an effective
date."
HEARD AND HELD IN COMMITTEE FOR FURTHER
CONSIDERATION
HB 49 "An Act relating to facsimile absentee ballot
application and facsimile absentee voting."
NOT HEARD - HELD OVER
WITNESS REGISTER
REP. ELDON MULDER
Alaska State Legislature
Capitol, Room 116
Juneau, Alaska 99811
Phone: 465-2647
Position Statement: Prime Sponsor of HB 75
TOM WILLIAMS, Director
Department of Revenue
Permanent Fund Division
P.O. Box 110460
Juneau, Alaska 99811-0480
Phone: 465-2323
Position Statement: Testified on behalf of Permanent Fund
Division regarding HB 75
TOM ANDERSON, Legislative Aide
Rep. Terry Martin's Office
Alaska State Legislature
Capitol, Room 411
Juneau, Alaska 99811
Phone: 465-3785
Position Statement: Testified in favor of HB 75
LYNN ZEILER
22611 McManus Dr.
Anchorage, Alaska 99567
Phone: 688-6446
Position Statement: Testified in favor of HB 75
(Testified via teleconference)
JANELE BOLLS
P.O. Box 212326
Anchorage, Alaska 99521
Phone: 333-0823
Position Statement: Testified in favor of HB 75
(Testified via teleconference)
KENNETH KIRK
Attorney at Law
900 W. 5th Ave., #730
Anchorage, Alaska 99501
Phone: 279-1659
Position Statement: Testified in favor of HB 75
(Testified via teleconference )
PREVIOUS ACTION
BILL: HB 75
SHORT TITLE: QUALIFICATIONS FOR PFD'S BY MILITARY
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) MULDER,Martin
JRN-DATE JRN-PG ACTION
01/20/93 114 (H) READ THE FIRST TIME/REFERRAL(S)
01/20/93 114 (H) MLV, JUDICIARY, FINANCE
02/25/93 (H) MLV AT 10:00 AM CAPITOL 17
03/03/93 (H) MLV AT 05:00 PM CAPITOL 17
03/03/93 (H) MINUTE(MLV)
03/05/93 545 (H) MLV RPT 2DP 3NR
03/05/93 545 (H) DP: MULDER, FOSTER
03/05/93 545 (H) NR: WILLIS, NAVARRE, KOTT
03/05/93 545 (H) -FISCAL NOTE (REV) 3/5/93
01/19/94 (H) JUD AT 01:15 PM CAPITOL 120
BILL: HB 49
SHORT TITLE: ABSENTEE BALLOTING BY FAX
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) MARTIN,Brice
JRN-DATE JRN-PG ACTION
01/13/93 52 (H) READ THE FIRST TIME/REFERRAL(S)
01/13/93 53 (H) STATE AFFAIRS,JUDICIARY,FINANCE
01/20/93 117 (H) COSPONSOR(S): BRICE
01/28/93 (H) STA AT 08:00 AM CAPITOL 102
01/28/93 (H) MINUTE(STA)
01/30/93 (H) STA AT 08:00 AM CAPITOL 102
01/30/93 (H) MINUTE(STA)
02/09/93 (H) STA AT 08:00 AM CAPITOL 102
02/11/93 (H) STA AT 08:00 AM CAPITOL 102
02/11/93 (H) MINUTE(STA)
02/13/93 (H) STA AT 08:00 AM CAPITOL 102
02/18/93 (H) STA AT 08:00 AM CAPITOL 102
02/18/93 (H) MINUTE(STA)
03/02/93 (H) STA AT 08:00 AM CAPITOL 102
03/02/93 (H) MINUTE(STA)
03/04/93 (H) STA AT 08:00 AM CAPITOL 102
03/04/93 (H) MINUTE(STA)
03/05/93 541 (H) STA RPT CS(STA) NEW TITLE
1DP 1DNP 5NR
03/05/93 541 (H) DP: VEZEY
03/05/93 541 (H) DNP: ULMER
03/05/93 541 (H) NR: B.DAVIS,OLBERG, G.DAVIS,
SANDERS,KOTT
03/05/93 541 (H) -FISCAL NOTE (GOV) 3/5/93
03/05/93 541 (H) REFERRED TO JUDICIARY
04/21/93 (H) JUD AT 01:00 PM CAPITOL 120
01/19/94 (H) JUD AT 01:15 PM CAPITOL 120
ACTION NARRATIVE
SENATE TAPE 94-2, SIDE A
Number 000
The joint meeting of the House and Senate Judiciary Standing
Committees was called to order at 1:25 p.m., on January 19,
1994, for the reconfirmation hearing of SHIRLEY McCOY to the
Select Committee on Legislative Ethics. Representative
Brian Porter and Senator Robin Taylor co-chaired the
meeting. This portion of the meeting was transcribed
separately. The joint meeting was adjourned at 2:00 p.m.
HOUSE TAPE 94-5, SIDE A
Number 000
CHAIRMAN PORTER called the individual House Judiciary
meeting to order at 2:05 p.m. Chairman Porter noted the
meeting was teleconferenced. He stated for the record that
Reps. Green, Kott, Nordlund and G. Phillips were in
attendance. He then brought up HB 75 for discussion.
HB 75: QUALIFICATIONS FOR PFD'S BY THE MILITARY
Number 046
REPRESENTATIVE ELDON MULDER, Prime Sponsor of HB 75,
presented the committee with a proposed committee substitute
and said the reason the bill changed was because of a
substantial problem they thought they had solved a couple
years back. He discussed working as a legislative aide for
former Senator Shirley Craft when they became aware of a
problem that spouses of military personnel who are non-
residents, but who's spouse and dependents were residents,
were being automatically thrown into review and actually
being denied the Permanent Fund Dividend (PFD). He said
they felt that was discriminatory and not fair, and the
legislature amended the statutes to say that just because a
spouse is not a resident, doesn't necessarily mean the other
spouse is not a resident. He cited a case in point where a
long-time Alaskan marries a person serving in the military,
and is then stationed outside of Alaska or overseas, and
plans on coming back to Alaska, met the two year residency
requirement, but is denied the PFD.
Number 100
REP. MULDER continued, saying they thought they had closed
that loophole; however, it became apparent through the
course of the year that the loophole wasn't closed quite far
enough. He said while it did solve the problem for the in-
state dependents and spouses of military personnel, those
out-of-state are now being thrown into review. Rep. Mulder
explained that the number of people it impacts is relatively
unknown, although it's estimated in a court case to be 800
or more. He said that the Department of Revenue (DOR) will
tell the committee that the proposed legislation would
dramatically open the floodgate, but he disagrees. Rep.
Mulder said what he thinks the department is saying they are
presuming guilt, while his position with this legislation is
presuming innocence. He added that an Alaskan leaving the
state with a non-resident military spouse has every right to
receive a PFD, provided they meet the requirements, and
should not automatically be thrown into review.
REP. MULDER said HB 75 closes that loophole by amending AS
42.23.015(A) to state that the residency of an individual
spouse may not be a factor relied upon by the commissioner
in determining the residency of an individual. He added
that previously this section stated that the residency of an
individual spouse may not be the principle factor relied
upon by the commissioner for the determination of residency.
Rep. Mulder said additionally the legislation amends AS
43.23.095(A) dealing with the acceptable reasons for absence
from the state, and in subsection (C) instead of "military
service" the section would read "service in the military
forces of the United States or to a company as a spouse or a
dependent a state resident or non-resident serving in the
military forces."
Number 175
REP. KOTT asked, If two non-Alaskan's come to Alaska and one
chooses Alaska residency, is that allowable or a problem?
Number 196
REP. MULDER replied that Rep. Kott should direct his
question to the department, but he thinks it is allowable,
if the intent is there to change residency.
Number 236
REP. KOTT asked if the CS affects people that come to the
state and spend a number of years here and then leave for
their home state.
Number 284
REP. MULDER suggested looking at the first paragraph of the
department's position paper, and that it is a consideration.
He added that a non-resident's action shouldn't affect a
resident's intention.
Number 300
REP. KOTT said he felt it should be a consideration,
although not necessarily the prime consideration.
Number 337
REP. MULDER responded that currently the provision was
putting an overly harsh interpretation on families, which
shouldn't be the case until they show intent, or take
actions to show they are not going to remain Alaskans.
Number 357
REP. PHILLIPS referred to page 1, line 11, which states
"however the residency of an individual spouse may not be a
factor relied upon by the commissioner in determining
residency," and asked if this provision applied not only to
military personnel, but someone that's at school, or in the
peace corp, etc., or is it just for the military.
REP. PHILLIPS continued saying that the way it is written
and the title of the bill, it starts out talking about
people just being gone, but then moves on to discuss people
that are only absent for the following reasons, and asked
why wouldn't it apply to someone going out to school.
Number 380
REP. MULDER replied that Rep. Phillips was right, the first
paragraph does affect everybody, and the second page directs
it only towards the military.
Number 395
TOM WILLIAMS, Director, Permanent Fund Division, Department
of Revenue (DOR), testified regarding the CS, and mentioned
drafting a zero fiscal note, which points out several
problems the department has with the legislation. He said
Section 1 and Section 2 are problems. He dealt with Section
1 first. Mr. Williams discussed the historical issue of
dealing with spouses with two different residencies and the
issue of intent. He described legislation which amended
section 15(a) to make sure that the PFD Division would not
inappropriately review an individual's eligibility based on
the residency of their spouse. Mr. Williams said it was
clear that the intent of the legislation (SB 327) was that
the department could look at the intent of an individual; a
spouse's non-residency would be looked at, but it would not
be the main factor.
Number 450
MR. WILLIAMS discussed a "piggyback" factor whereby a non-
resident spouse could piggyback on a resident spouse when
out on allowable absences and receive the PFD, which current
regulations reflect. He said this legislation would revert
that to basically exclude the allowable absence piggyback
provision for all individuals. Mr. Williams discussed a
recent court decision in Zeiler v. the State of Alaska,
where Judge Dana Fabe upheld the department's position with
respect to allowable absences and whether the department is
unjustly denying dividends to individuals who are absent
with non-resident spouses. This legislation would reaffirm
that in statute.
Number 518
CHAIRMAN PORTER asked Mr. Williams about Judge Fabe's
decision, which would seem to indicate that the department
may not use the residency or lack thereof of the spouse to
determine the other's residency.
Number 523
MR. WILLIAMS said the court decision said it can't be the
principle factor with respect to the piggybacking of the
absence being the major factor in whether or not somebody
qualifies for a PFD.
Number 530
CHAIRMAN PORTER asked what was the fact situation of that
case.
Number 533
MR. WILLIAMS replied that the fact situation of the Zeiler
case was an individual Alaska resident married a non-
resident, and when the family left the state, she continued
to apply for dividends, and the department identified her as
ineligible and she challenged it on the basis that she was
accompanying a non-resident member of the military and the
court upheld the department's assessments.
Number 554
REP. NORDLUND spoke regarding Section 1 and said the point
Mr. Williams raised was a good one and suggested that Rep.
Mulder would not want that to happen, and there must be a
way of rewording the legislation to achieve what Rep. Mulder
wants.
Number 563
MR. WILLIAMS said the real solution is probably to bifurcate
the definition of residency in the PFD statutes and
bifurcate that from the absence provision to make it clear
that absence is a condition of eligibility, not a condition
of residency. He said then the statute as written would
reflect that it's not the principal factor and would work
fine, because you wouldn't look at absences when you look at
residency.
MR. WILLIAMS then directed his testimony to Section 2 of HB
75, which the department sees as creating several problems,
including the scenario where two non-residents move into the
state and the husband remains a non-resident while the wife
and kids declare their residency. He said they are
definitely eligible while they are in state. Mr. Williams
said HB 75 would say the state will continue to pay you when
you leave, and the department thinks that opens the door
potentially to a number of people taking that option.
MR. WILLIAMS went on to say that Mr. Mulder was correct in
discussing intent, and the department can only base their
decision on a person's external actions, and so they look
for actions that are consistent with what they declare. He
said that leaving with a non-resident, while there are
exceptions to the rule, but in the general and broad sense,
it's not consistent with somebody's intent to return and
remain permanently. Mr. Williams said the department sees
that as a very incongruous declaration, and there is a large
economic incentive for a large family who declares Alaska
residency.
Number 637
REP. PHILLIPS asked, For the record, how many check's were
issued last year, and how many cases of fraud did the
department institute and follow through on last year?
Number 640
MR. WILLIAMS responded that the department had roughly
549,000 applications filed for 1993; and of those about
525,000 are eligible; and they have denied about 23,000, but
not all of those involved fraud.
Number 649
REP. PHILLIPS asked roughly how may fraud cases were filed.
Number 653
MR. WILLIAMS replied that in the last year they have
probably had six to eight individual cases, some of which
span several years, so they involve multiple dividends.
Number 657
REP. PHILLIPS asked how many fraud cases are pending that
have not been acted on yet.
Number 660
MR. WILLIAMS said he doesn't have a count on the fraud cases
but they have probably 240 applications that are under
criminal investigation.
Number 671
REP. PHILLIPS asked, Of the 23,000 that were denied last
year, what percentage of those have you in the past year
gone back and reinstated?
Number 676
MR. WILLIAMS said there was an appeal process and there were
about 5,000 appeals for 1993; so of 23,000 they have about
5,000 appeals, and the overturn rate at this time is around
20 percent.
REP. GREEN asked about the length of time between filing,
being denied, appealing, and coming to a determination.
Number 700
MR. WILLIAMS said the appeal process can take up to a year.
Number 738
REP. KOTT asked, If a resident married a non-resident and
then they left the state, can the department check up on
them because they have left?
Number 749
MR. WILLIAMS said it's not a matter of residency, rather a
matter of eligibility. He said the short answer is they are
not on allowable absence if they leave with a non-resident,
and the only piggyback that there is, or was, deals with
leaving with another resident who is on an allowable
absence.
Number 770
REP. KOTT asked about a particular case, say an Alaska
Native, who leaves with a non-resident, and now that person
is not eligible for a PFD?
Number 778
MR. WILLIAMS said the solution to that is to have the non-
resident declare Alaska residency as well, and if they leave
under an allowable absence, then they will be entitled to
PFD's.
Number 795
REP. NORDLUND said he supports the bill, but is concerned
about an individual leaving with a non-resident and never
coming back to Alaska to live.
Number 801
MR. WILLIAMS replied that you have to be physically present
in the state every two years.
Number 810
REP. NORDLUND said he thinks that some people may abuse the
system.
Number 813
REP. KOTT asked if the department could place PFD's into a
trust fund for those in question?
Number 826
MR. WILLIAMS replied that anything is possible, but there
would be administrative costs involved. He also said that
the purpose of PFD's is to encourage people to maintain
residency in Alaska.
Number 861
TOM ANDERSON, Legislative Aide to Representative Terry
Martin, Prime Sponsor of HB 49, explained that Rep. Martin
had previously had legislation doing basically the same
thing. Mr. Anderson reiterated Rep. Martin's support for HB
75 and asked the committee to support the bill.
TAPE 94-5, SIDE B
Number 102
REP. KOTT said he thought the fraudulent rate was probably
closer to 15 percent. He asked how many of Rep. Martin's
constituents were getting checks.
Number 160
REP. MULDER again reiterated his testimony in favor of HB
75.
Number 180
LYNN ZEILER testified on teleconference from Anchorage in
favor of HB 75 and urged the committee to support it. She
said she had been a resident of Alaska since 1960 and
married a military man in 1974; and in 1990, the PFD
Division told her to pay back all of the dividends she had
received.
MS. ZEILER read a statement from PAT WILSON supporting the
legislation.
Number 376
REP. KOTT expressed his concern about the number of out-of-
state people who come to Alaska to try and get a PFD.
Number 399
JANELE BOLLS, from Anchorage, testified in support of HB 75
and said she had been married to a military man in 1974 and
has been wrongly turned down by the department for PFD's in
1985 through 1988.
Number 497
The committee discussed military personnel and how they can
change their residency to Alaska.
Number 558
KENNETH KIRK, attorney for the declaratory group, testified
in support of HB 75 and said in his opinion it was alright
to drop Section 1, so long as Section 2 was left intact.
Number 659
CHAIRMAN PORTER asked Mr. Kirk if a spouse and dependents of
a person in the military come to Alaska as non-residents,
and one spouse establishes residency, they are covered under
Section C of the legislation. He asked if this provision
would also cover a resident that marries a non-resident.
Number 682
MR. KIRK said certain requirements must be met.
Number 687
REP. PHILLIPS moved to adopt the Committee Substitute for
House Bill 75. The motion was seconded.
Number 701
REP. NORDLUND asked Rep. Mulder if he would be willing to
strip Section 1 out of the bill.
Number 705
REP. MULDER replied that this was a new issue to him, so he
couldn't give a definitive answer. He asked Tom Williams
from the PFD Division for his opinion.
Number 721
MR. WILLIAMS replied that the legislation still needs a fix,
even if Section 1 is dropped, but it could be solved by
separating residency from eligibility, and it needs to be in
statute.
Number 732
REP. MULDER asked Mr. Williams, If Section 1 was deleted,
would Section 2 solve the military issue?
Number 737
MR. WILLIAMS replied that it would create an inconsistency.
Number 741
MR. KIRK said he thought it could be solved through intent
language.
Number 751
MR. WILLIAMS said he didn't believe intent language would
solve the problem; absences need to be separated from
residency.
Number 758
CHAIRMAN PORTER asked Rep. Mulder to adopt language to
address the problem and perhaps look at doing another
committee substitute.
Number 766
REP. JAMES voiced a concern that the military is being
treated better than other Alaska residents, and she thinks
all Alaskans should be treated equally.
Number 781
CHAIRMAN PORTER held HB 75 for action at a future date.
CHAIRMAN PORTER also held over HB 49 due to a lack of time
for a comprehensive hearing.
ADJOURNMENT
CHAIRMAN PORTER adjourned the meeting at 3:10 p.m.
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