Legislature(1995 - 1996)
01/24/1995 08:05 AM House STA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
January 24, 1995
8:05 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Scott Ogan, Vice Chair
Representative Joe Green
Representative Ivan Ivan
Representative Brian Porter
Representative Caren Robinson
Representative Ed Willis
MEMBERS ABSENT
None
COMMITTEE CALENDAR
* HB 4: "An Act relating to absences from the state for purposes
of determining residency under the permanent fund
dividend program; and providing for an effective date."
HEARD AND HELD
* HJR 3: Proposing an amendment to the Constitution of the State
of Alaska prohibiting the imposition of state personal
income taxation, state ad valorem taxation on real
property, or state retail sales taxation without the
approval of the voters of the state.
HEARD AND HELD
* HB 42: "An Act relating to absentee voting, to electronic
transmission of absentee ballot applications, and to
delivery of ballots to absentee ballot applicants by
electronic transmission, and enacting a definition of the
term `state election' for purposes of absentee voting."
PASSED OUT OF COMMITTEE
* HB 70: "An Act relating to treatment of permanent fund dividends
for purposes of determining eligibility for certain
benefits; and providing for an effective date."
HEARD AND HELD
* HB 81:"An Act relating to the preservation of public facilities
and to appropriations for annual maintenance and repair,
periodic renewal and replacement, and construction of
public facilities."
SCHEDULED BUT NOT HEARD
(* First public hearing)
WITNESS REGISTER
REPRESENTATIVE PETE KOTT
Alaska State Legislature
Capitol Building, Room 432
Juneau, AK 99801
Telephone: 465-3777
POSITION STATEMENT: Sponsor of HB 4
TOM WILLIAMS, Director
Permanent Fund Dividend Division
Department of Revenue
PO Box 110460
Juneau, AK 99811
Telephone: 465-2096
POSITION STATEMENT: Provided information
JUDY ERICKSON
319 Seward Street, #4
Juneau AK 99801
Telephone: 586-3118
POSITION STATEMENT: Supported HB 4
REPRESENTATIVE JOHN DAVIES
Alaska State Legislature
Capitol Building, Room 422
Juneau, AK 99801
Telephone: 465-4457
POSITION STATEMENT: Supported HB 4 and suggested amendments
REPRESENTATIVE TERRY MARTIN
Alaska State Legislature
Capitol Building, Room 502
Juneau, AK 99801
Telephone: 465-3783
POSITION STATEMENT: Sponsored HJR 3 and HB 42
JACK CHENOWETH, Attorney
Legislative Legal Services
130 Seward Street, Suite 409
Juneau, AK 99801
Telephone: 465-2450
POSITION STATEMENT: Provided information
DAVID KOIVUNIEMI, Acting Director
Division of Elections
240 Main Street, 4th Floor
Juneau, AK 99801
Telephone: 465-4611
POSITION STATEMENT: Provided information
STAN RINGMAN, Legislative Aide
Representative Scott Ogan
Capitol Building, Room 409
Juneau, AK 99801
Telephone: 465-3878
POSITION STATEMENT: Commented on HB 42
PREVIOUS ACTION
BILL: HB 4
SHORT TITLE: PERMANENT FUND DIVIDEND
SPONSOR(S): REPRESENTATIVE(S) KOTT
JRN-DATE JRN-PG ACTION
01/06/95 21 (H) PREFILE RELEASED
01/16/95 21 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 21 (H) STA, JUD, FIN
01/24/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HJR 3
SHORT TITLE: VOTER APPROVAL FOR NEW TAXES
SPONSOR(S): REPRESENTATIVE(S) MARTIN, Rokeberg, Bunde
JRN-DATE JRN-PG ACTION
01/06/95 16 (H) PREFILE RELEASED
01/16/95 16 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 16 (H) STA, JUD, FIN
01/19/95 86 (H) COSPONSOR(S): BUNDE
01/24/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 42
SHORT TITLE: ABSENTEE VOTING & USE OF FAX
SPONSOR(S): REPRESENTATIVE(S) MARTIN
JRN-DATE JRN-PG ACTION
01/06/95 31 (H) PREFILE RELEASED
01/16/95 31 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 31 (H) STA, JUD, FIN
01/24/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 70
SHORT TITLE: END PERMANENT FUND DIVIDEND HOLD HARMLESS
SPONSOR(S): REPRESENTATIVE(S) KOTT, Green
JRN-DATE JRN-PG ACTION
01/06/95 39 (H) PREFILE RELEASED
01/16/95 39 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 39 (H) STA, JUD, FIN
01/24/95 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 81
SHORT TITLE: PRESERVATION OF PUBLIC FACILITIES
SPONSOR(S): REPRESENTATIVE(S) JAMES
JRN-DATE JRN-PG ACTION
01/13/95 42 (H) PREFILE RELEASED
01/16/95 42 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 42 (H) STA, TRA, FIN
01/24/95 (H) STA AT 08:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 95-1, SIDE A
Number 000
The House State Affairs Committee was called to order by CHAIR
JEANNETTE JAMES at 8:05 a.m. Members present at the call to order
were Representatives James, Green, Ivan, Porter, Robinson and
Willis. Chair James stated there was a quorum present and
introduced Representatives John Davies, Terry Martin and Pete Kott.
CHAIR JAMES introduced her staff and described their duties: Walt
Wilcox, Committee Aide; Sam Griswold, Committee Secretary; Barbara
Cotting, Legislative Aide, and Myrna McGhie, Legislative Assistant.
She announced to the committee that meetings will be held Tuesdays
and Thursdays from 8:00 a.m. to 10:00 a.m. or longer, if necessary,
and Saturday 10:00 a.m. until noon, as necessary, to allow public
testimony for the working public who can only testify on Saturdays.
Number 070
CHAIR JAMES outlined guidelines and procedures for committee
members, as well as the requirements for hearing bills. She stated
committee substitutes will be ordered from Legislative Legal
Services through the Chair only, to avoid confusion. Substitute
amendments will require an additional public hearing after a
committee substitute is done. If there is a very substantive
amendment, within the committee, an additional hearing will have to
be noticed. Major amendments must be submitted to the Chair at
least 24 hours before they are to be heard. She added that
normally bills will be heard in the order listed on the committee
calendar to make it expedient for people wanting to testify. She
noted subcommittees on individual bills, assigned as needed by the
Chair, will not be chaired by the bill sponsor.
CHAIR JAMES noted for the record the arrival of Representatives
Ogan and Willis.
HSTA - 01/24/95
Number 205
HB 4 - PERMANENT FUND DIVIDEND ELIGIBILITY
REPRESENTATIVE PETE KOTT, SPONSOR OF HB 4, noted that a similar
bill to HB 4 almost passed last year, but died awaiting concurrence
the final night of session. This legislation would remedy a
problem resulting from a court ruling. That ruling suggests that
wives of those eligible to receive the permanent fund, living out
of state, are no longer eligible. It is the piggyback rule. The
wives cannot piggyback on their husband's travel and be considered
eligible. This measure is trying to correct that, and is
retroactive to January 1, 1994, to allow all those last year into
the program. From early indications, the fiscal note will be
approximately $600. He said a representative from the Department
of Revenue was present at the meeting to suggest some changes that
he is in agreement with. Representative Kott said some of the
changes were a result of the new 1995 permanent fund application.
REPRESENTATIVE JOE GREEN questioned the amount in the fiscal note.
REPRESENTATIVE KOTT said the early fiscal note indications, and
this still has to come down from the Governor, is $600. It is an
unofficial version awaiting arrival from the Governor's Office.
CHAIR JAMES noted that the Governor's Office is having a problem
getting geared up to provide fiscal notes. They are behind,
therefore, she recommended lenience on getting these bills passed.
This bill has additional referrals to Judiciary and Finance, so it
will not be passing without a fiscal note. It will be at the will
of committee about what we do.
REPRESENTATIVE KOTT said it was unofficial, but, by June 30, 1995,
the division will mail out 1,300 notices to those who were denied
in 1994, and that is the $600 mailing and processing cost.
Number 265
REPRESENTATIVE GREEN remarked that the $600 is for mailing, but
what about the amount of the money that the permanent fund then is
actually giving to how ever many spouses, dependent children and
other eligible people.
REPRESENTATIVE KOTT estimated the cost for implementing this bill
would be about a $2 per person reduction in the dividend check that
each individual would receive, and this was not coming from general
fund money. Military spouses and other members who accompanied
their husbands out of state were on an eligible absence and were
receiving the permanent fund dividend (PFD) check for about eight
or nine years before the judge ruled on this. The original intent
of the legislature was not to prohibit those eligible wives or
spouses from receiving the dividend check when they were
accompanying their eligible spouse. Currently, the eligible spouse
and eligible children can receive it, but the wife or husband
cannot receive it. This bill corrects a deficiency in a court
ruling that was somewhat inaccurate.
CHAIR JAMES asked if there were any further questions. She
introduced Tom Williams, Director, Permanent Fund Dividend
Division, Department of Revenue.
Number 290
TOM WILLIAMS, DIRECTOR, PERMANENT FUND DIVIDEND DIVISION,
DEPARTMENT OF REVENUE, referred the committee to a handout for his
testimony. He summarized the lengthy document, saying there was
court action, which on December 16, 1993, invalidated a regulation
allowing spouses to piggyback onto their eligible Alaska resident's
absence. As a result of a change in the law that occurred,
effective January 1992, there was a conflict between a statute and
a regulation. With such a regulation, the regulation falls. The
department asked the legislature to fix that problem last year, and
in HB 392 there was language to do that. HB 392 did not pass in
the final minutes of session. The effect was to make the piggyback
absence invalid since January 1, 1992. It affected 1992, 1993 and
1994 applicants. Virtually all of the 1992 and 1993 applicants had
been paid. Some were remaining in appeals. When the department
got ready to pay those remaining in appeals, if they were denied
for another reason and that denial was subsequently overturned,
they could not do it they discovered, because the applicants no
longer had an allowable absence. After consulting with the
Attorney General's Office, the division determined they would not
go back and assess the 1992 and 1993 applicants that had already
been paid. So, the only people that have been affected from 1992
and 1993, were those that had an appeal pending. That denial had
been overturned and they're just waiting to be paid. They pended
those - they did not take any action on them; they held them
awaiting a legislative solution.
MR. WILLIAMS said 1994 was different. He explained none of the
1994 applications have been paid. The division had no basis for
making that allowable absence since it had been struck down. The
division ended up denying all those that had been absent more than
180 days. Mr. Williams said they looked at those who had been gone
less than 180 days and tried to fit them into the general 180-day
discretionary absence where they could. Unfortunately, not many of
those people met that requirement. The total they were required to
deny was 2,690 spouses. There were also some children that were
sponsored by those spouses. These spouses were given the
opportunity to change the sponsorship of those children over to the
other Alaska resident. Some took advantage of that, but not
everybody did. Consequently, if they did not have an eligible
sponsor, the department had to deny them payment. The intent of
the legislation is to retroactively reinstate the piggyback rule to
where it was prior to the court ruling. After discussing the bill
with the Department of Law, there is some question as to whether
the initial draft actually does that. There is a conflict between
two statutes. The conflict arises because absences are a component
of a definition of state residency. This legislation takes what
was once described as an allowable absence by regulation and moves
it into statute. They drafted a committee substitute that will do
what the sponsor has, except it removes all doubt regarding the
technical problem. It removes the allowable absences from the
definition of state resident, moves it to a separate section, and
defines allowable absence as an eligibility criteria. That
eliminates the conflict with the provision that says you cannot
consider the residency of your spouse as not the principal factor.
It still retains the allowable absence provision, and it allows it
to reinstate the historically allowable absences that has been on
the books since the beginning of the program. Another difference
is that in Section IV of the proposed version, it would ensure that
the 1992, 1993 and 1994 applicants are made whole again. He said
that would allow the division to pay those 1992 and 1993
piggybacking spouses that are currently pending. In Section V, it
takes a different approach to an extension of an application
period. In the original bill there is a provision saying that 1994
and 1995 applicants have until September 1 to resubmit an
application if they were affected by this legislation. The
division believes that piggybacking spouses who applied in the past
have already applied for the 1994 dividend, and those applications
are on file. So this is an extension of the appeal deadline up to
September 1, as opposed to the reapplication period. While the
division had denied 2,690 applicants, they only received appeals
from 1,373 applicants. Those have been pended. The other 1,300
that have not appealed would benefit by having an extended appeal
period. With regard to 1995, the proposed substitute doesn't have
anything to do with them as far as an extended filing period. The
reason for that is contained in the last two pages of the
information before the committee. He indicated that the division
has put an important notice in the 1995 dividend application to
spouses absent from Alaska, which is that they should go ahead and
apply for the 1995 dividend by the application deadline.
Number 435
MR. WILLIAMS said the fiscal note covers preparing and doing a
mailout to those people we want to target, letting them know the
law has changed and they can appeal or reapply, whichever the
legislature chooses. He also referred to a question asked by
Representative Green about the fiscal note, saying they have not
included any fiscal impact related to the total amount of the
dividend because, by formula, there is a certain amount that will
be distributed. It doesn't change the amount of dividend payments,
it will change who it goes to. Assuming there were 2,690 people
paid, it would calculate to a little over $2.6 million.
Number 465
REPRESENTATIVE GREEN asked if eligibility is automatic for persons
from another state who are married to someone in the military, who
is an Alaskan resident because of their military service and is
then shipped out.
MR. WILLIAMS said the piggybacking spouse rule only applies to
individuals who accompany an eligible Alaska resident. It doesn't
apply to individuals accompanying a resident from another state.
Both spouses have to be Alaska residents and they have to take the
steps to initiate their own Alaska residency prior to the
qualifying year. So for them to get the 1994 dividend, both
spouses would have had to establish Alaska residency through normal
means, declaring that they are an Alaska resident registering to
vote, prior to the beginning of the qualifying year that would have
been prior to January 1, 1993.
Number 494
REPRESENTATIVE BRIAN PORTER asked how many more eligible people
this version of the bill would incorporate in the past and in the
future. There are some applications pending for 1992 and 1993,
that the new wording would provide the division a better way of
providing money. He wondered if they could do it anyway with
Representative Kott's version.
MR. WILLIAMS answered no. Under Representative Kott's version
there is no relief for 1992 and 1993. That is why they suggested
that they make sure it goes back to...effective for 1992 and 1993.
He did not how many there are, he did not have a number, but
probably fewer than 100.
REPRESENTATIVE PORTER wondered if there were any other categories
of individuals who would be eligible under his version, besides the
100, as opposed to the original bill.
MR. WILLIAMS answered "No. They are not opening it up beyond the
piggybacking spouse. Another important issue is that they included
in the committee substitute, a modifier that you must accompany an
`eligible Alaskan resident' as opposed to just an `Alaska
resident.'"
Number 520
REPRESENTATIVE SCOTT OGAN asked if moneys have been set aside on
the pending applications, and where the revenues will come from if
it is not set aside.
MR. WILLIAMS said moneys were not originally calculated in to cover
that. It was originally estimated there would be 535,000 payable
as of December 31, 1994. Our actual payables were 531,000. There
should be money there to pay those. The worse case scenario is
that the pending applicants would have to wait until July 1,
because there is a provision under AS 43.23.025 which has the
calculation of the dividend. Every year you put all the money that
is left in one pot, slice off what is necessary to pay prior year
dividends, including these, then you calculate the remaining
dividends. There is a method by which people can be paid, if they
can be paid now, because there are sufficient funds in the pot. He
said they would do that just as soon as the legislation passed. If
there was not, they would wait until July 1, at which time there
would be, assuming the dividend program continues.
REPRESENTATIVE OGAN asked if people's PFD checks will not be
reduced next year, if these pending applications are paid.
MR. WILLIAMS said there is a possibility that will occur. It will
depend on the number of other appeals that are overturned and
whether we come up to that actual 535,000. It is possible there
will be virtually no effect.
Number 550
REPRESENTATIVE IVAN IVAN had questions about the committee
substitute. On page 3 of the proposed committee substitute, the
new language inserted reads, "Maintains and demonstrates at all
times an intent to return to the state." He questioned what the
division uses as the criteria to show that intent when determining
eligibility.
MR. WILLIAMS said first they basically assume that the applicant is
honest in telling them they have the intent to return to the state.
They will believe them. They look for indicators that would be
inconsistent with that intent. In fact, they adopted by regulation
a series of steps or actions that clearly are inconsistent with the
individual's intent. As long as an individual does not take an
action inconsistent with maintaining that intent they will tend to
believe them. They look for indications, such as the individual
routinely coming back to the state after an absence, and if they
maintain any ties here, or show some sort of connection to the
state. They look for hard evidence to prove out their intent, but
they start with the premise that their intent is valid.
REPRESENTATIVE IVAN asked if the language appears in other statutes
relating to the permanent fund.
MR. WILLIAMS assured Representative Ivan that it is consistent with
Title I, AS 01.10.055, which generally is the general residency
description for the permanent fund.
REPRESENTATIVE IVAN asked about the appeal period that is in place
in retroactive payments to persons who are found eligible for the
program. He asked about constituents who have missed a year, due
to the inability to read languages. Representative Ivan asked if
they would still be eligible to get the dividend check they missed
the prior year if they failed to submit an application, or it was
lost enroute. He asked how they handle that.
MR. WILLIAMS said there is no provision for adult individuals who
have missed or failed to file an application. There is a provision
in law for children for whom an adult did not file an application
to come back within one year of their eighteenth birthday or within
one year of emancipation, to file for missed dividends. If an
application was lost in the mail individuals can resubmit an
application by a particular deadline. They have to provide a
variety of proofs that they did submit a timely application.
REPRESENTATIVE CAREN ROBINSON referred to two of her constituents,
whose spouses have gone out to further their education, and they
own property in Juneau. Also, one of the constituents returns to
do business. She wanted to reaffirm that these are the types of
people we are trying to get to who are deserving of the PFD. They
clearly show long term residency, own property, and clearly have
intent of coming back and only went temporarily to get further
education or other kinds of military reasons.
MR. WILLIAMS agreed. He said the piggybacking absence applies to
any spouse that is piggybacking onto any legitimate absence. It is
not just military. There are students, our congressional
delegation, and service on the staff. Military and students are
probably the highest category where piggybacking would apply.
Number 615
CHAIR JAMES determined there were no further questions from the
committee and no one waiting on the teleconference, so she called
Judy Erickson to testify.
Number 618
JUDY ERICKSON, BUSINESS OWNER, CAPITAL INFORMATION GROUP, and
Juneau resident. She gave testimony in support of the bill. She
testified that a personal experience made her aware of this issue
when her ex-husband required long-term medical treatment outside of
Alaska. Ms. Erickson explained that her ex-husband and his wife
have lived in Alaska for 20 years, they maintain a home in Juneau.
They have children whom they try to get down to see him as often as
possible, for emotional support. The financial burden is great and
it is important for them to have the dividend. She wanted to
encourage the committee to change the law on this issue to allow
people in this situation to receive the PFD.
Number 640
CHAIR JAMES asked if there was anyone else from the floor who
wanted to give testimony.
REPRESENTATIVE JOHN DAVIES wished to add his voice in support for
this particular bill stating that PFD problems are common among his
constituents. He thinks the bill is long overdue and ought to be
passed. He suggested adding two other categories that they might
want to consider. They are included in HB 5 and fit in the
structure of HB 4. The categories are: (1) Services of Volunteers
of the Red Cross; and (2) Services of Volunteer of the
International Executive Service Corps. It is slightly different in
that it is a private nonprofit organization and does things
essentially the same as the Peace Corps, which is an allowable
absence. The Executive Service Corps matches up predominately
retired executives in the U.S. with a business in a developing
country or foreign country, where our business techniques can help
advance the operation of a similar business in another country. It
is by invitation of the other governments. It functions as the
Peace Corps does in principle, but it is directed at making
businesses more productive. It benefits all of us, because it is
international trade and a good thing to do morally.
Number 685
CHAIR JAMES rolled HB 4 over to the next calendar meeting, asking
the sponsor for a committee substitute with changes in the original
bill. Representatives Porter and Robinson agreed the bill could
not be passed as it was, that changes were necessary.
TAPE 94-1, SIDE B
Number 022
CHAIR JAMES stated they should pass bills in the best condition
they think they ought to be. She suggested the bill be brought
back with amendments to the original bill so they could see the
changes they are proposing, including the suggestions made by
Representative Davies. The committee would try to get back to it
Thursday and pass it.
Number 065
CHAIR JAMES brought the meeting back to order after a five minute
break and asked the record to reflect that Representative Ivan Ivan
was still out.
HSTA - 01/24/95
Number 104
HJR 3 - VOTER APPROVAL OF NEW TAXES
CHAIR JAMES went to the next bill on the agenda, which was HJR 3,
and called REPRESENTATIVE TERRY MARTIN who is sponsoring the bill
to the table to make his presentation.
REPRESENTATIVE TERRY MARTIN, SPONSOR OF HJR 3, gave a history of
taxation in the U.S. and stated the importance of allowing voters
to decide on taxation. His sponsor summary for HRJ 3 is as
follows, for the record:
Proposing an amendment to the Alaska Constitution to require
the approval by the state's voters for the imposition of state
income tax, state ad valorem tax on real property, or state
retail sales taxation.
"HJR 3 is intended to prevent exorbitant and disproportionate
taxes from harming Alaskan residents. Taxation, whether
income, property, or retail merchandise is not the answer to
increasing state revenues.
Need for Legislation
"The State of Alaska currently ranks first in state tax
revenue per $100 of personal income, and ranks third for local
tax revenue per $100 of personal income. Although oil and gas
taxes contribute to a large portion of the state tax ranking,
the local burden clearly depicts the high level of taxes
Alaskans suffer. States such as Florida and Nevada prohibit
their legislature from enacting a personal income tax, while
the Colorado Legislature passed a 1992 law requiring voter
approval for any permanent tax increase. Five states have
constitutional mandates preventing specific taxes, while 10
states require a `super majority' of their legislature to pass
various taxes.
"These advances in the elimination of unwarranted taxation are
indicative of the national trend. In Alaska, voters are
extremely apprehensive about new and elevated taxes. The
general viewpoint has been to work in conjunction with the
legislature, rather than to grant them full autonomy over
taxation. HJR 3 would transfer the final authority of
statewide taxation from the legislature to the citizenry."
Number 195
CHAIR JAMES reported for the record that Representative Ivan Ivan
returned shortly after Representative Martin began speaking. She
then asked if there were any questions.
REPRESENTATIVE GREEN testified in support of the bill. He said he
supported the bill strongly from a fiscally conservative point of
view. His concern is about how the action of the various bodies
delegate their responsibility as taxing authorities. The
legislature is the one empowered to do taxing and they, in turn,
give this back to the people. He asked how this works in other
states, if there have been problems, and if the people have
empowered or instigated a tax again through popular vote.
REPRESENTATIVE MARTIN explained that other states have reinstated
a tax through popular vote. Legislators are elected as their
representatives, but it is a sharing of responsibilities that is
happening now. We need to go back to the people for certain
things, and give the people a voice to change the constitution or
to speak to the legislators through the petition process. People
are becoming concerned, nationwide as well as citywide and
statewide, that the government has too much money. We have to put
restraints on it and listen to the people.
REPRESENTATIVE GREEN asked if people in other states that have
enacted legislation like this, where the state requires public
approval of taxes, have increased taxes or imposed a tax by popular
vote.
REPRESENTATIVE MARTIN referred to the tax revolt under the Jarvis
Amendment in California, which had been very effective in
controlling California's wild spending. There were other taxes
accepted in San Diego when people decided to tax themselves for
more education. The state of Colorado recently followed the
revolution of the Jarvis Act in California and put heavy
restrictions on their state legislators on the capping of tax.
People will vote to reinstate taxes when it becomes necessary.
REPRESENTATIVE GREEN said his concern is that we in Alaska will
have to impose a tax at some future time, once spending is brought
under control. He wondered if we move this legislation, if the
people would vote to reinstate a tax.
Number 308
REPRESENTATIVE ROBINSON had two concerns. From what she has seen
is that in Alaska it has been just the opposite. We not only have
imposed an income tax, we have also come back and repealed an
income tax. It was an act of the legislature. Historically, the
legislature has acted responsibly regarding this issue, which is
our constitutional duty, so she asked why Representative Martin
perceived a problem and why he thought we need to move on this one.
Her second question was about another fear she has. The fear is
being caught in a crisis and just being on hold about whether the
public would agree that we were in a crisis and would vote to tax
themselves. For example, if oil dropped to $8 a barrel, it would
be the legislature's responsibility to keep the state functioning
and to keep a responsible budget while just hoping for voters'
approval and they would tax themselves.
REPRESENTATIVE MARTIN commented that fear is the driving force of
the legislature, one way or the other. Legislators fear the public
voice every two years when running for election. If it came to a
revenue crisis he felt there were other options available to the
legislature before taxing. Taxing may take a year or two years to
get started; by then, government is stopped. He said, "Do we have
guts enough to cap the dividends for one year or two years?" If we
capped it this year at $1,000 per person, you would have $227
million for the 1996 budget available to you. Representative
Martin felt that, when we talk about fear, we need to ask in what
way are we fearful of the public. To make his point, he said,
"Will they cut my head off because I capped the dividends or would
they cut my head off because I allowed them to vote on taxes?"
Number 371
REPRESENTATIVE PORTER said that his concern is timing. One of the
major chores of this legislature is to attempt to set up a long-
range fiscal plan, which will require a vote of the public because
of the Constitutional Budget Reserve issue and the spending
limitation, and to try to get something for a five-year period
rather than something changeable every two years. He wondered if
that process would be somewhat frustrated if this and that process
were going on simultaneously.
REPRESENTATIVE MARTIN said that when talking about a five-year plan
this could be part of it. We could have it on the ballot for the
next election to show the people are willing to talk about taxing.
If asked about tax for education, they may pass it with ease. If
the legislature taxes the people on income tax without giving them
a voice they rebel, but give them a voice and they will cooperate.
Part of the plan for future funding is to allow the voice of the
people to be heard.
Number 415
REPRESENTATIVE PORTER said he would be more comfortable if there
were limitations put on interest groups being able to lobby one way
or another on the public. It often comes down as money for
advertising, in that kind of situation, not with the real will of
the people.
Number 419
REPRESENTATIVE IVAN presented a question to Representative Martin
about his bill where it compares Alaska to other states in the
Lower 48. It states that Alaska ranks first in state revenue for
$100 for personal income and third for local tax revenue.
Representative Ivan asked how much of these figures are paid by oil
companies and other resource users, and how much is paid by
individuals for local or state taxes. When looking at the
situation as it is today, and trying to see our future, and what we
have to deal with in order to come up with a fiscal plan, these are
facts that he felt he needed to know to go with Representative
Martin in this process.
REPRESENTATIVE MARTIN said it is good to find out what is happening
in other states of democracy and republican form of government. He
explained that is why the National Council of State Legislators
(NCSL) was able to give them this important information. The
information shows that on the state level we are number one, and on
the local level we are number one. On the state level everyone is
equal: $12.80 per $100 tax that someone is paying for us now,
mostly the oil companies. That is between 80 percent and 85
percent. It is down now to about 80 percent because of productions
decrease and so on. When we come to property tax, the overall is
$6 per $100 that the average Alaskan pays; but it varies from
community to community, for some have a sales tax but low property
tax. Some have high property tax and no sales tax. Other
communities like the North Slope Borough from Valdez and Fairbanks
that can have a high mill rate on the pipeline, which takes the
money directly out of state revenues and gives it to local
government that other areas don't have the access to, but that
property tax decreased to what might be a local property tax. The
average is $6.00 by the national foundation: It is strictly an
average. If people were asked to pay a tax because of a decrease
in oil production, a new 3 percent or 4 percent of this total cost
of government, he thinks the people will pay the tax if they know
it is going for a specific purpose.
REPRESENTATIVE ROBINSON asked Representative Martin if this bill
passes the House and Senate, if another bill would have to be
passed to say it must go to the vote of the people with a plan.
REPRESENTATIVE MARTIN said yes, this could be part of the future
plan. Once the people have been given the right to have a voice in
the future financing of the state, then we can go to them with our
total package for the next five or ten years.
REPRESENTATIVE ROBINSON reaffirmed that there would have to be
another bill passed by the legislature before we could pursue any
taxation. She also pointed out that there is no fiscal note, and
this bill would clearly need a fiscal note.
REPRESENTATIVE MARTIN said the Administration is having difficulty
catching up with everything, and asked if he could introduce
through the committee to accept a typical $2,200 fiscal note for
any ballot question. It wouldn't be any more than that.
Number 506
CHAIR JAMES asserted that it would be a two-part process. This
bill is a request for a constitutional amendment. For this bill
to pass it needs to pass with a two-thirds (2/3) vote in both
houses. Then it would go to the public for them to vote as to
whether or not they wanted to have this authority to decide on
these issues. That is the first issue, and that is the issue
before this committee. This does not have anything to do with
whether or not we want to tax. Pending the decision by the people
on this bill that would be what we would do when we want to impose
a tax. CHAIR JAMES agreed with Representative Porter that the
Senate, the House and the Governor, support the formation of a
long-range planning commission to establish goals for a five year
period, and that is going to take a constitutional amendment. It
is very specific in the constitution that you cannot commit another
legislature, and legislatures only last two years. This committee
or this legislature cannot put anything into any specific form,
which says they must do something. If the public tells us this is
what they want us to do, and the five-year plan should be put out
for the vote of the people, then it would behoove the legislature
to do it whether or not they are compelled by the constitution to
do it. They would be responding to the people's needs. Further,
CHAIR JAMES said she trusts the people too, and it is never a
mistake to ask the people what to do. It is difficult to have the
thumb on the pulse of the people without asking them specifically
to vote for a specific issue. She said, if they are wrong, or they
as legislators do not think they understand something, it behooves
them to make the public understand. It is important that everyone
is on the same plane.
REPRESENTATIVE ROBINSON asked if they could still go to the people
and ask their opinion, as an advisory vote, without this bill.
REPRESENTATIVE JAMES explained that whenever they go to the people
for a vote when it is not a constitutional mandate, what they are
asking is an advisory vote. They can go forward and do what the
people said or not. It is just an advisory vote.
REPRESENTATIVE MARTIN said the experience with the advisory vote is
that the legislators do not listen to the people. It is a gimmick
in the history of this state to kill an issue. The legislature
does not follow through on the advice of the people.
CHAIR JAMES commented on the language of the bill. Her concern was
that it is brief. Even though constitutional amendments are
intended to be brief, they are not intended to put law in the
constitution, but rather philosophy. Yet for establishing a state
tax on personal income, the question is very basic; there is not
anything said in this bill that would indicate that we would need
to ask about any gross increases in that tax. If the people voted
on it, and it becomes part of our constitution that says if we want
to establish a state tax on personal income, we must first ask the
people. So if we ask the people, then if the legislature puts a 1
percent tax on our income and they say yes, then the following year
decide to increase it, this amendment does not preclude the
legislature from raising taxes. She wondered if the bill is
sufficient to do what they intend it to do.
REPRESENTATIVE MARTIN hopes it is. The intent is that any
increases in personal taxes would go to the people for a vote. If
we put on a 2 percent sales tax for the state, and say it would
bring in $200 million, then if two years down the line the
legislature decided it needs another $100 million for something,
then the people would have the chance to vote on that increase.
This is personal taxes. We don't interfere with business taxes,
commercial taxes, oil taxes or severances.
CHAIR JAMES brought up the legislature's ability to authorize
agencies to put on fees. This legislation is turning the decision
on whether or not to have income tax over to the people and taking
it out of our courts. She asked Representative Martin to comment
on that.
REPRESENTATIVE MARTIN commented that we should stay out of that,
because the people would show very clearly that they might not want
to pay more fees.
CHAIR JAMES said we as a legislature, an authorizing body,
authorize fees and now we have no control over what happens to the
fees. The language of this bill does not preclude the legislature
from raising the taxes.
REPRESENTATIVE MARTIN said we do have the right to control fees in
this state, in all agencies, whether it be for motor vehicle plates
or for all kinds of services. The legislature, on behalf of the
citizens, has that control.
REPRESENTATIVE PORTER said that, for the record, the wording:
"prohibiting any imposition of state income tax, ad valorem
taxation on real property, or retail sales tax without approval of
the voters." He wanted to make clear that we are not by-passing
this, by prohibiting boroughs or municipalities.
Number 621
REPRESENTATIVE MARTIN said that is a whole other issue. This is
strictly to the state.
Number 638
JACK CHENOWETH, LEGISLATIVE LEGAL SERVICES, testified that the
changes in the rate after the tax is in place is not clear. If you
want the voters to be able to say yes or no to a change of rate in
any of these taxes, this has to be in the bill. It should be
stated, and increases and decreases must be stated also, or the
courts will get on it.
REPRESENTATIVE MARTIN said because he feels the people should have
that right he would go by his suggestion.
Number 670
CHAIR JAMES asked if anyone wished to make any amendments. She was
not comfortable moving the bill without the changes to make it
clearer. Constitutional amendments must be clear enough to
understand. She did not feel comfortable moving it out of
committee in this condition.
REPRESENTATIVE MARTIN agreed to do a committee substitute.
CHAIR JAMES said the committee will carry it over until February 2,
1995.
HSTA - 01/24/95
Number 693
HB 42 - ABSENTEE VOTING BY FAX
REPRESENTATIVE MARTIN presented HB 42, regarding absentee voting by
fax. He said it is important for Alaska to get up to date with the
concept of encouraging more people and making it possible for them
to vote in the process of elections. We have more people per
capita in any given day and any given week, having to travel within
the state, much less outside. We learned through the Gulf War how
easy it would be for Alaska citizens to vote by fax.
TAPE 95-2, SIDE A
Number 000
REPRESENTATIVE MARTIN said they had to change the word even though
it is called the "Fax Bill" and we are now talking about electronic
media, because there are other ways of getting the message through
to request information. So, the latest bill, over the last two
years, has changed the word "fax" to use the word "electronic
transmission." It will allow the division of elections to use
whatever is modern and available. The whole purpose of this bill
is to encourage more participation in the voting process. It is
estimated that maybe 20 percent of the people decide to vote in the
last week, because they had to leave their district. By faxing,
they can request an absentee ballot.
Number 110
REPRESENTATIVE PORTER commented that the amendment seems to
eliminate on page 2, section C, "promptly after receiving absentee
ballot that has been complete and returned under this section, the
director shall acknowledge receipt of the completed ballot by
electronic transmission to the voter." This would say the division
does not have to notify the voter that his fax was received. He
wondered if that was the intent.
REPRESENTATIVE MARTIN said that it eliminates the voting.
REPRESENTATIVE GREEN commented that it only eliminates the fact
that it has been received. Basically, what the division needs, but
he just hoped to open it up and use electronic means for voting.
Number 135
DAVID KOIVUNIEMI, ACTING DIRECTOR OF ELECTIONS, stated first that
they have taken a neutral stand on this bill. They are leaving it
up to the legislature. Regarding Representative Porter's question
regarding the request to remove the notification of a received fax,
it was simply economic. He did not have a fiscal note, but he has
been in contact with Representative Martin's office to determine
the costs. What the fiscal note is will be dictated by what is
included or excluded in this bill. The cost of faxing to Japan is
$2.04; to Saudi Arabia, $3.66; to Germany, $1.04. If they receive
an application by mail soon enough, they send a postcard to
acknowledge receipt of an absentee application. In 1992, they sent
10,212 absentee ballots for the primary and 36,588 for the general
election. If they sent them priority mail it would have come to
$140,000. First class mail is $14,976. He said that priority
mail, at the present rate, is ten times more and there isn't much
better service.
CHAIR JAMES said she received a number of complaints from her
district about the length of time it took for them to get their
ballots back. Mail may have been the problem. Faxes could be a
solution. There was a problem about how to inform the voters if
their ballot was counted.
MR. KOIVUNIEMI said the Administration procedures will account for
all ballots by number.
CHAIR JAMES said to put the onus on the voter to mail the ballot
after faxing. More people will be able to vote, so there will be
an increase in postage.
Number 311
REPRESENTATIVE GREEN asked how to safeguard against fraud.
MR. KOIVUNIEMI said there is no method of guaranteeing anything,
but the Administration will require voters to fill out a ballot and
require information on the envelope, just like they do now. There
will still be a witnessing requirement on a separate form. If
there is a challenge, they can go back to check signatures and
compare the registration and sworn statement. There are some
things they cannot control. Mr. Koivuniemi said he would provide
a fiscal note.
Number 375
STAN RINGMAN, LEGISLATIVE AIDE, REPRESENTATIVE OGAN, wished to add
a comment about mailing. He said that priority mail is a postal
service marketing gimmick. What you are buying is two pounds of
first class mail service. It receives no different handling than
first Class mail service. You are only buying more than you need,
generally, if you are under two pounds. It would be a good way to
save the state some money. There would be no difference in service
to the absentee voters.
Number 399
MR. CHENOWETH, testified that this bill does not apply to municipal
elections or to Rural Education Administrative Area (REAA)
elections. This bill does not apply to things committed from this
list. If there is a need for this kind of faxing in conjunction
with those elections, it needs to be built into the bill. Special
federal elections are not embraced in this bill either. Another
thing, for the record, is based on a Montana rule. In judiciary
the right of privacy came up. Article 5, Section 3 deals with
right of secrecy, picked up from the Hawaii constitution. Language
draws from there.
Number 493
REPRESENTATIVE MARTIN said that during the Gulf War, the Department
of Defense was also concerned about confidentiality. Since then
the Supreme Court and U.S. Justice Department have ruled that the
confidentiality should not be of concern when a person may be
denied the right to vote.
Number 520
CHAIR JAMES asked if anyone would be interested in submitting this
amendment to this bill.
REPRESENTATIVE ROBINSON moved to accept the amendment brought
forward, which is: Page 2, lines 14 through 16, that we delete all
materials. Second would be page 3, line 11, that we delete
"priority mail" and insert "the most expeditious mail service." On
page 3, line 15 through 16, delete the "most expeditious mail
service" and insert "the."
CHAIR JAMES asked if there was any objection. There being no
objection, the amendment to HB 42 was passed.
REPRESENTATIVE PORTER asked a question regarding Section III, page
2, about the days for receiving absentee ballots. If they are
mailed they must be received seven days before; if they're faxed
they must be received four days before. If they're mailed they must
provide for the allowance of simultaneous registration.
MR. KOIVUNIEMI said this bill does not tinker with the thirty-day
registration requirement.
Number 608
REPRESENTATIVE GREEN moved and asked unanimous consent that HB 42
move out of committee.
There being no objection, the bill was moved. CHAIR JAMES said
they will do a committee substitute.
HSTA - 01/24/95
Number 620
HB 70 - END PERMANENT FUND DIVIDEND HOLD HARMLESS
CHAIR JAMES said she would like to go on to HB 70 briefly and get
the sponsor statement so she could carry it over to the next
meeting date.
REPRESENTATIVE PETE KOTT, SPONSOR OF HB 70, testified that this
measure would add a few dollars to the permanent fund dividend
check. At the present time, a recipient of welfare who receives a
Permanent fund dividend (PFD), fails to qualify for continued
welfare benefits and depending on the circumstance, the
disqualification could last up to four months. Generally, it is
one month. Welfare benefits are then made to the individual, under
what is known as the hold-harmless program. That program is funded
by deducting that amount necessary for the welfare benefits from
everyone else's PFD check. This year it was in the excess of $41.
The amount has grown of the years - it started off at a little over
$6. Over the course of time, the entire program has cost every
other Alaskan about $240. The Department of Health and Social
Services has eight full-time employees that administer this
particular program. HB 70 would eliminate this hold-harmless
program. It would mean that PFD checks would be treated as
ordinary income for purposes of determining welfare eligibility,
and this is the same way that income is treated by the Internal
Revenue Service. It also means that PFD recipients would not
continue to fund a program that allows individuals to receive that
money while they are still on welfare. Representative Kott's
belief is that it is a step self-sufficiency, and accomplishing
welfare reform. There is no fiscal note associated with it. They
do not know what the fiscal ramifications would be. All they know
is that there are about eight individuals who work toward this
particular end in the Department of Health & Social Services.
CHAIR JAMES asked for questions, and the committee agreed to
reserve questions for a later period. She said the bill will be
held over to Thursday, January 31, 1995.
ADJOURNMENT
CHAIR JAMES adjourned the meeting at 10:25 a.m.
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