02/20/1995 01:34 PM House FIN

  HOUSE BILL NO. 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."                                                                  
                                                                               
  ROD MOURANT, STAFF, REPRESENTATIVE KOTT maintained that HB 4                 
  will remedy a problem caused in a recent court ruling.   The                 
  ruling  disallowed Permanent Fund Dividend (PFD) payments to                 
  spouses  of  PFD recipients  while accompanying  an eligible                 
  spouse  out   of  state  on  an  allowable   absence.    The                 
  legislation  would   allow  individuals  who   accompany  an                 
  eligible  spouse out  of state  on an  allowable absence  to                 
  retain their  eligibility for  a PFD  if that  was the  only                 
  reason that  the spouse was  disallowed.  He  explained that                 
  the  legislation applies  retroactively to January  1, 1994.                 
  This was the first time the Permanent Fund Dividend Division                 
  disallowed dividends  for that reason.   He cited  two cases                 
  involving local residents.  He noted  that there is a $600.0                 
  hundred  dollar current  year fiscal  note accompanying  the                 
  legislation.   The fiscal  note will  fund costs  associated                 
  with  contacting individuals  that have  not repealed  their                 
  denial.                                                                      
                                                                               
  Representative  Brown noted  that  the legislation  contains                 
  language similar to  HB 392, which was introduced during the                 
  Eighteenth  Legislative  Session.     She  noted  that  some                 
  provisions of HB 392 were enacted as regulations.                            
                                                                               
  MIKE MCGEE, CHIEF OF PFD OPERATIONS, PERMANENT FUND DIVIDEND                 
  DIVISION,  DEPARTMENT  OF REVENUE  explained that  the court                 
  ruled  that  the regulation  was  in conflict  with existing                 
  statute.  The law stated that the Division could not use the                 
  residency  of  a   spouse  as  the  primary  source   of  an                 
  individual's  eligibility.    The  intent  is  to   separate                 
  absences from residency.                                                     
                                                                               
  Representative Mulder asked for further clarification of the                 
  insertion of  "maintains and  demonstrates at  all times  an                 
  intent" and deletion of "intends" on line 27  and 18 on page                 
  2.   Mr. McGee  explained  that the  change was  made to  be                 
                                                                               
                                9                                              
                                                                               
                                                                               
  consistent with  the definition  of "residency" in  existing                 
  statute.                                                                     
                                                                               
  Representative  Brown noted  that  HB 392  proposed  sixteen                 
  allowable absences.  She  observed that HB 4 contains  eight                 
  allowable absences.   Mr.  Mourant explained  that only  the                 
  existing  allowable  absences  were  included   due  to  the                 
  complexity of the issue.                                                     
                                                                               
  Co-Chair Hanley noted that the  legislation does not specify                 
  that absences for educational purposes  must be due to full-                 
  time  participation.    Mr. McGee  stated  that  regulations                 
  specify  full-time   status  of   good   standing  must   be                 
  maintained.                                                                  
                                                                               
  Representative Martin noted  that PFD checks were  denied to                 
  many students  in the previous  year.   Mr. McGee  discussed                 
  reasons    students    were    denied    their    dividends.                 
  Representative  Navarre  noted   that  many  students   were                 
  enrolled  to  vote   on  their  campuses  during   the  last                 
  presidential  election.    Out-of-state  voter  registration                 
  challenges their intent to return to Alaska.                                 
                                                                               
  In response  to a  question by  Representative Navarre,  Mr.                 
  McGee noted that dividends will be  paid from the subsequent                 
  year's  permanent fund dividend.  Payments  made as a result                 
  of the  legislation would  be identified  with the  dividend                 
  payment.                                                                     
                                                                               
  Representative Brown observed that HB 392 would have allowed                 
  absences  while "attending  a special  education program  to                 
  assist in the treatment of learning or physical disabilities                 
  or   treatment  of   mental  disorders   if  attendance   is                 
  recommended by a licensed  physician, psychologist, physical                 
  therapist, or the commissioner of  eduction; attending full-                 
  time  technical  training  as  part  of a  career  education                 
  program recognized by the Alaska commission on Postsecondary                 
  Education; and attending full-time an academic  institution,                 
  seminar,  or  other   program  for  continuing  professional                 
  educational development, including  a sabbatical, legal,  or                 
  accounting program, recognized  by the Alaska  Commission on                 
  Postsecondary Education."  She noted  that the Department of                 
  Revenue requested the changes contained in HB 392.                           
                                                                               
  Mr.  Mourant  observed  that  the  legislation  was  drafted                 
  independent of  the Department  of Revenue.   He noted  that                 
  item  eight  is the  only  item  not contained  in  existing                 
  statute, AS 43.23.095 (8).                                                   
                                                                               
  Mr. McGee noted  that the absences quoted  by Representative                 
  Brown  are  included  in  regulation.   Mr.  McGee  provided                 
  members  with  a  copy of  the  regulations,  15 AAC  23.163                 
                                                                               
                               10                                              
                                                                               
                                                                               
  (Attachment 2).                                                              
                                                                               
  Representative  Kohring  spoke  in  support  of  HB 4.    In                 
  response to a question by  Representative Kohring, Mr. McGee                 
  reiterated  that funding  will  be  paid  out  of  the  over                 
  estimation of this  year's dividend or  off the top of  next                 
  year's dividend payment.   He  added that individuals  whose                 
  1992 and 1993 PFD's were denied  for other reasons and their                 
  denial overturned by appeal would also be paid.                              
                                                                               
  Representative Mulder  MOVED to report  CSHB 4 (STA)  out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.                                                    
                                                                               
  CSHB 4  (STA) was reported out of Committee with a "do pass"                 
  recommendation and with a zero fiscal note by the Department                 
  of Revenue, dated 2/1/95.