HB 142-PFD ELIGIBILITY  4:44:59 PM CHAIR KREISS-TOMKINS announced that the next order of business would be HOUSE BILL NO. 142, "An Act relating to eligibility for the permanent fund dividend." [Before the committee was CSHB 142(JUD).] 4:45:46 PM REPRESENTATIVE KEN MCCARTY, Alaska State Legislature, prime sponsor of HB 142, provided brief introductory remarks. 4:46:22 PM CHAIR KREISS-TOMKINS opened public testimony. 4:47:12 PM BERT HOUGHTALING stated, "From what I've heard of this particular bill, I'm not too much against what is being done." He understood that the bill would make it easier for those working out of state to file for their PFD, as well as further clarify the eligibility criteria for the PFD. He said if that was correct do, then he was supportive of the proposed legislation. He concluded by addressing HB 73 and HJR 7. 4:49:43 PM NOLAN HEATH informed the committee that he was a Vietnam veteran. He believed that service members who were assigned to a base outside of Alaska should not be eligible for a dividend even if they maintained residency in Alaska. However, if those service members returned to Alaska, they should be allowed to reestablish their eligibility, he opined. 4:51:50 PM CHAIR KREISS-TOMKINS closed public testimony. 4:52:12 PM CHAIR KREISS-TOMKINS referenced a letter from the Department of Revenue (DOR), dated 4/28/21 [hard copy included in the committee packet], which provided responses to questions asked in the House Judiciary Committee. The third paragraph on page 1 specified that AS 43.23.008 and 15 AAAC 23.163 contained the language allowing snowbirds to be absent from Alaska for up to 180 days. He asked why the 180-day threshold was placed in regulation as opposed to statute. Further, he questioned whether DOR could theoretically increase or decrease that threshold through the regulatory process. 4:53:54 PM BOBBI SCHERRER, Appeals Manager, Permanent Fund Dividend Division, Department of Revenue, stated that from 1999 to 2003, the language was found under AS 43.23.008(13)(A); however, in 2004, the statute was changed to its present form. Regarding his second question, she offered to follow up with the requested information. 4:54:53 PM CHAIR KREISS-TOMKINS questioned whether a piece of legislation removed that language from law in 2004. MS. SCHERRER said she did not know and offered to follow up with the requested information. CHAIR KREISS-TOMKINS expressed his surprise that this policy was in regulation rather than statute. 4:55:37 PM REPRESENTATIVE MCCARTY clarified that the 180-day threshold was presently in statute. He opined that increasing the length of allowable absence for snowbirds could affect the economy if they chose to remain in another state for a longer amount of time. CHAIR KREISS-TOMKINS noted that his predilection would be to tighten the limit so that people would need to spend a "strong majority" of the year in Alaska in order to qualify for eligibility. 4:56:52 PM The committee took a brief at-ease. 4:59:00 PM CHAIR KREISS-TOMKINS thanked Representative Tarr for directing his attention to several statutes during the at-ease. 4:59:09 PM REPRESENTATIVE VANCE referenced page 1, paragraph 4 of the letter from DOR, which indicated that the repeal of AS 43.23.0005(a)(4), AS 43.23.005(f), and AS 43.23.008(e), per Section 3 of CSHB 142(JUD), would increase the number of eligible applicants each year that were absent on allowable absences under AS 43.23.008(a). She inquired about any unintended consequences that may occur as a result of the repeal language in Section 3. Further, she the bill sponsor to speak to his intent. 5:01:09 PM REPRESENTATIVE MCCARTY said the intent of the bill was to make PFD eligibility equitable. He added that "not everybody gets to move from the state and keep collecting the Permanent Fund Dividend." He explained that military members had been allowed to leave the state with the intent to return while still collecting their PFD; however, that intent was not always fulfilled. He added that other people may have had the intent to leave Alaska and return but they not were not allowed the same privilege. Therefore, the intent of the proposed legislation was to ensure that the dividend was being disbursed to people residing in the state, he indicated. 5:02:42 PM REPRESENTATIVE VANCE said she would like to hear from both Legislative Legal Services and DOR to ensure that there was consistent interpretations of the repeal language and its potential ramifications. EMILY NAUMAN, Deputy Director, Office of the Director, Legislative Legal Services, asked Representative Vance to repeat the question. 5:03:05 PM REPRESENTATIVE VANCE directed attention to the repeal language in Section 3 of CSHB 142(JUD). She inquired about the full impact of that language, as DOR had indicated that repealing those statutes would apply to all allowable absences under AS 43.23.008(a) and that the division would apply the law consistently and uniformly. MS. NAUMAN said currently, a person was allowed to be absent for the reasons listed under AS 43.23.008; however, AS 43.25.005 required eligible individuals to have been present in the state for at least 72 consecutive hours during the prior two years before the current dividend year even if they claimed an allowable absence. She stated that the proposed legislation would repeal that requirement, so if people were out of state on an allowable absence, they would no longer be required to prove they had returned to Alaska for at least 72 consecutive hours. 5:05:20 PM REPRESENTATIVE EASTMAN surmised that the repeal language would change the annual number of eligible applicants. He questioned whether that overall number would increase or decrease. MS. SCHERRER stated that because the repeal of AS 43.23.005(a)(4) would impact all allowable absence types [under AS 43.23.008(a)], the 14,500 individuals who were claiming an allowable absence would no longer be required to prove they had returned to Alaska for 72 consecutive hours to prove their intent. 5:06:50 PM REPRESENTATIVE EASTMAN asked how many individuals would be eligible to receive a dividend should the bill pass. MS. SCHERRER reported that of the 14,500 individuals claiming an allowable absence, 2,000 were denied for non-response or failure to provide proof of physical presence in the state for at least 72 consecutive hours. She explained that those 2,000 people would become eligible if the bill were to pass, while the remaining 12,500 would maintain eligibility, but would no longer be required to provide that proof. 5:08:28 PM REPRESENTATIVE EASTMAN asked how many military members would be denied eligibility if the bill were to pass. MS. SCHERRER said the Permanent Fund Division (the division) was not able to break down the figures by type of absence. CHAIR KREISS-TOMKINS sought to clarify whether the repealing the 72-hour requirement would reduce the number of eligible applicants by 12,500. MS. SCHERRER stated that the number of active-duty military members who would no longer be eligible for the PFD would amount to 10,000 per year. 5:11:45 PM CHAIR KREISS-TOMKINS sought to clarify what the 14,500-figure corresponded to. MS. SCHERRER restated that 14,500 was the number of individuals per year who claimed an allowable absence under AS 43.23.009(a)(1-16) and were required to prove they had returned to Alaska for at least 72 consecutive hours. 5:12:18 PM REPRESENTATIVE EASTMAN asked how long a person could be absent from the state for education or training purposes under the proposed legislation. MS. SCHERRER said the bill would not change the other allowable absence types. She directed attention to AS 43.23.008(d), which specified that people who had been absent from the state for more than 180 days in each of the five preceding qualifying years must prove that they had been physically present in the state for at least 30 cumulative days during the past five years to maintain residency in Alaska through the PFD program. 5:13:40 PM REPRESENTATIVE EASTMAN asked how long a military member could be absent from Alaska. MS. SCHERRER said the proposed legislation would require that the service member be absent on deployment or a temporary duty assignment. She believed that there was no specific time limit if a military member was absent for either of those reasons; however, like the other allowable absences, a temporary duty assignment or deployment would still have to comply with AS 43.23.008(d). REPRESENTATIVE EASTMAN asked the bill sponsor how long a service member on military deployment or temporary duty travel (TDY) could be absent for. REPRESENTATIVE MCCARTY said it would depend on the military's discretion. He explained that if an individual was deployed for several years while based out of Alaska, that person would still be eligible. 5:15:35 PM REPRESENTATIVE EASTMAN inquired about an astronaut's eligibility if he/she was in space. REPRESENTATIVE MCCARTY contemplated whether the National Aeronautics and Space Administration (NASA) would be categorized as military. 5:17:26 PM REPRESENTATIVE STORY asked whether Department of Military & Veterans' Affairs (DMVA) had expressed concern about the 10,000 military members who would lose eligibility if the bill were to pass. REPRESENTATIVE MCCARTY relayed that the Veterans of Foreign Wars (VFW) and American Legion believed that if people had left Alaska, they should no longer receive a dividend. REPRESENTATIVE STORY was concerned that the National Oceanic and Atmospheric Administration (NOAA) Commissioned Officer Corps and the U.S. Public Health Service (USPHS) Commissioned Corps had not been allowed to receive a PFD. She expressed interest in proposing a future amendment that would remedy that. 5:20:12 PM REPRESENTATIVE MCCARTY said he shared that concern and welcomed further discussion on the issue. He understood that eligibility was addressed under AS 43.23.005. REPRESENTATIVE STORY expounded that she was concerned about Alaskan residents who served in the NOAA Commissioned Officer Corps and USPHS Commissioned Corps. She believed that they should qualify to receive a dividend despite being absent on long periods of service. CHAIR KREISS-TOMKINS directed attention to 43.23.008(a)(1), which was the allowable absence for receiving secondary or postsecondary education on a full-time basis. He asked whether that would include graduate school. MS. SCHERRER answered yes, a person in graduate school would fall under that category. CHAIR KREISS-TOMKINS asked how many individuals qualified for that allowable absence. MS. SCHERRER offered to follow up with the requested information. CHAIR KREISS-TOMKINS requested a list of how many people qualified under each respective allowable absence [AS 43.23.08(a)(1-16). 5:23:38 PM CHAIR KREISS-TOMKINS asked what proportion of allowable absences claimed under AS 43.23.008(a)(1) were for graduate school or something other than undergraduate, vocational, or technical education. MS. SCHERRER believed that the majority of individuals claiming that allowable absence were four-year college students. 5:24:22 PM REPRESENTATIVE KAUFMAN asked whether there was a "tabular version of conformance" that was used in managing this data that could be provided to the committee. MS. SCHERRER offered to follow up with the requested information. 5:25:32 PM REPRESENTATIVE EASTMAN expressed concern that the proposed legislation would allow those claiming allowable absences, such as education, work, or the Peace Corps, for example, to be out of state for five years, but the same opportunity would not be allowed for service members. He believed the bill was preferencing other service over military service. He questioned whether that could be more equitable. REPRESENTATIVE MCCARTY welcomed a friendly amendment that would address that issue. REPRESENTATIVE EASTMAN pointed out that a military member may have a harder time fulfilling the requirement under AS 43.23.008(d)(1), which would allow an individual who was absent for five years to show proof that they had been present in the state for at least 30 cumulative days. He reiterated his concern that service members could be at a disadvantage. 5:28:46 PM CHAIR KREISS-TOMKINS reopened public testimony. 5:29:03 PM LATRICE WILLIAMS informed the committee that she was a prior active-duty military member who had been stationed in Alaska. She believed that only people who physically resided in Alaska should be eligible for the PFD. Additionally, service members who were stationed in Alaska for three years, for example, should also be eligible. She maintained her belief that service members who were assigned to a different location outside of Alaska should lose their eligibility. 5:30:46 PM CHAIR KREISS-TOMKINS closed public testimony and announced that HB 142 was held over.