Legislature(2025 - 2026)GRUENBERG 120
05/15/2025 03:15 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB11 | |
| HB1 | |
| HB133 | |
| HB4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 114 | TELECONFERENCED | |
| += | HB 146 | TELECONFERENCED | |
| *+ | HB 100 | TELECONFERENCED | |
| += | HB 1 | TELECONFERENCED | |
| + | HB 133 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 11 | TELECONFERENCED | |
| += | HB 4 | TELECONFERENCED | |
HB 11-PFD CONTRIBUTIONS TO GENERAL FUND AND PFD
4:20:06 PM
CHAIR CARRICK announced that the first order of business would
be HOUSE BILL NO. 11, "An Act relating to contributions and
donations from permanent fund dividends."
4:20:29 PM
CHAIR CARRICK opened public testimony on HB 11. After
ascertaining there was no one who wished to testify, she closed
public testimony.
4:21:02 PM
CHAIR CARRICK moved to adopt Amendment 1 to HB 11, labeled 34-
LS0182\A.1, Nauman, 5/14/25, which read as follows:
Page 3, line 19:
Delete "10 percent of the amount of the dividend"
Insert "$25 dollars"
Page 3, line 20:
Delete "10 percent"
Insert "$25 dollars"
CHAIR CARRICK stated that she would object to Amendment 1 for
the purpose of speaking to the amendment. She said that it
would simply change the amount that someone can donate their
permanent fund dividend (PFD) from an increment of 10 percent to
increments of twenty-five dollars. She said that this would
align with the current structure of the "click, pick, give"
program. She said that it would also align with how individuals
are currently able to donate to the education raffle. She said
that by structuring donations this way, it would avoid confusion
for those applying for the dividend who may not understand the
10 percent structure. She said that she offered this amendment
to avoid this type of confusion.
4:22:13 PM
REPRESENTATIVE STORY asked what the bill sponsor thought about
the proposed amendment.
4:22:25 PM
RILEY NYE, Staff, Representative Mike Prax, Alaska State
Legislature, on behalf of Representative Prax, prime sponsor of
HB 11, characterized Amendment 1 as a "friendly" amendment. He
said that the amendment would not impact bill implementation or
intent.
4:22:49 PM
REPRESENTATIVE HOLLAND asked Mr. Nye if somebody wanted to give
away the remaining part of the PFD, and it was not captured by
the $25 breakdown, whether there had been any discussions for
how to clear the remaining dividend.
CHAIR CARRICK said that she has thought about this scenario and
discussed it. She discussed anecdotal evidence regarding how
most people manage their PFD donations.
4:24:47 PM
CHAIR CARRICK removed her objection to Amendment 1. There being
no further objection, Amendment 1 was adopted.
4:25:05 PM
REPRESENTATIVE HOLLAND moved to adopt Amendment 2 to HB 11,
labeled 34-LS0182\A.2, Nauman, 5/14/25, which read as follows:
Page 1, line 1, following "dividends":
Insert "; and relating to disclosures included
with an individual permanent fund dividend"
Page 1, following line 2:
Insert a new bill section to read:
"* Section 1. AS 43.23.028(a) is amended to read:
(a) By October 1 of each year, the commissioner
shall give public notice of the value of each
permanent fund dividend for that year and notice of
the information required to be disclosed under (3) of
this subsection. In addition, the stub attached to
each individual dividend disbursement advice must
(1) disclose the amount of each dividend
attributable to income earned by the permanent fund
from deposits to that fund required under art. IX,
sec. 15, Constitution of the State of Alaska;
(2) disclose the amount of each dividend
attributable to income earned by the permanent fund
from appropriations to that fund and from amounts
added to that fund to offset the effects of inflation;
(3) disclose the amount by which each
dividend has been reduced due to each appropriation
from the dividend fund, including amounts to pay the
costs of administering the dividend program and the
hold harmless provisions of AS 43.23.240;
(4) include a statement that an individual
is not eligible for a dividend when
(A) during the qualifying year, the
individual was convicted of a felony;
(B) during all or part of the qualifying
year, the individual was incarcerated as a result of
the conviction of a
(i) felony; or
(ii) misdemeanor if the individual has been
convicted of a prior felony or two or more prior
misdemeanors;
(5) include a statement that the
legislative purpose for making individuals listed
under (4) of this subsection ineligible is to
(A) provide funds for services for and
payments to crime victims and operating costs of the
Violent Crimes Compensation Board;
(B) provide funds to pay restitution owed
to crime victims;
(C) provide funds for grants to nonprofit
organizations for services for crime victims and for
mental health services and substance abuse treatment
for offenders;
(D) provide funds for the office of
victims' rights;
(E) provide funds to the Council on
Domestic Violence and Sexual Assault for grants for
the operation of domestic violence and sexual assault
programs; and
(F) obtain reimbursement for some of the
costs imposed on the Department of Corrections related
to incarceration or probation of those individuals;
(6) disclose the total amount that would
have been paid during the previous fiscal year to
individuals who were ineligible to receive dividends
under AS 43.23.005(d) if they had been eligible;
(7) disclose the total amount transferred
or appropriated for the current fiscal year under
AS 43.23.048 for each of the accounts, funds, and
agencies listed in AS 43.23.048;
(8) include a statement that the total
amount of the dividend may be subject to federal
individual income tax, regardless of donations or
contributions made under AS 43.23.130, 43.23.135, or
43.23.230."
Page 1, line 3:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill section accordingly.
CHAIR CARRICK objected for the purpose of discussion.
REPRESENTATIVE HOLLAND explained that Amendment 2 would be a
disclosure that would be added to the dividend process. He said
that it simply would provide a disclosure that the total amount
of the dividend may be subject to Federal Income Tax, regardless
of any donations or contributions to charitable groups. He
talked about the issue of surprise Federal Income Tax for
individuals who donated their PFD. He discussed confusion
associated with energy rebates and new taxable income and
related it to the proposed amendment.
4:26:43 PM
REPRESENTATIVE STORY asked Mr. Nye what the bill sponsor thought
of the amendment.
MR. NYE responded that given discussions with the bill sponsor,
Representative Prax, he was happy to defer to the will of the
committee for this amendment. He said that this would likely
not cause any major fiscal implications but said Ms. Wojtusik
may be able to speak to the mechanics about implementing this
amendment.
4:27:28 PM
CHAIR CARRICK asked Ms. Wojtusik whether Amendment 2 would bear
a cost to administer.
4:27:38 PM
GENEVIEVE WOJTUSIK, Director, Permanent Fund Dividend Division,
Department of Revenue (DOR), responded that she did not believe
that there would be any additional cost other than what was
already associated with the bill. She said that there is
already an indeterminate fiscal note with the required
programming. She cautioned that the PFD division does not do
any administration with tax and PFD division usually defers to
the tax division. She said that having a statement like this
would be a new piece to the PFD application.
4:28:32 PM
REPRESENTATIVE STORY commented that it would be helpful for the
public to be reminded that there are federal tax deductions on
the PFD. She said she was in favor of Amendment 2.
4:28:55 PM
REPRESENTATIVE HOLLAND explained that Amendment 2 uses the word
"may" and noted that it would not be "tax advice." He said the
wording was done this way to avoid confusion.
4:29:30 PM
CHAIR CARRICK removed her objection. There being no further
objection, Amendment 2 was adopted.
4:29:49 PM
REPRESENTATIVE HOLLAND moved to adopt Amendment 3 to HB 11,
labeled 34-LS0182\A.3, Nauman, 5/14/25, which read as follows:
Page 1, line 1, following "Act":
Insert "relating to the calculation of the
permanent fund dividend; relating to eligibility forms
and applications for the permanent fund dividend;
relating to appropriations from the dividend fund to
the general fund; and"
Page 1, following line 2:
Insert new bill sections to read:
"* Section 1. AS 43.23.005(a) is amended to read:
(a) An individual is eligible to receive one
permanent fund dividend each year in an amount to be
determined under AS 43.23.025 if the individual
(1) submits the eligibility form and
application for the dividend [APPLIES] to the
department;
(2) is a state resident on the date the
individual submits the eligibility form and [OF]
application;
(3) was a state resident during the entire
qualifying year;
(4) has been physically present in the
state for at least 72 consecutive hours at some time
during the prior two years before the current dividend
year;
(5) is
(A) a citizen of the United States;
(B) an alien lawfully admitted for
permanent residence in the United States;
(C) an alien with refugee status under
federal law; or
(D) an alien that has been granted asylum
under federal law;
(6) was, at all times during the qualifying
year, physically present in the state or, if absent,
was absent only as allowed in AS 43.23.008; and
(7) was in compliance during the qualifying
year with the military selective service registration
requirements imposed under 50 U.S.C. App. 453
(Military Selective Service Act), if those
requirements were applicable to the individual, or has
come into compliance after being notified of the lack
of compliance.
* Sec. 2. AS 43.23.005(c) is amended to read:
(c) A parent, guardian, or other authorized
representative may apply for and claim a permanent
fund dividend on behalf of an unemancipated minor or
on behalf of a disabled or an incompetent individual
who is eligible to receive a payment under this
section. Notwithstanding (a)(2) - (4) of this section,
a minor is eligible for a dividend if, during the two
calendar years immediately preceding the current
dividend year, the minor was born to or adopted by an
individual who is eligible for a dividend for the
current dividend year.
* Sec. 3. AS 43.23.005(h) is amended to read:
(h) If an individual who applied for and would
otherwise have been eligible for a permanent fund
dividend dies [AFTER APPLYING FOR THE DIVIDEND BUT]
before the dividend is paid, the department shall pay
the dividend to a personal representative of the
estate or to a successor claiming personal property
under AS 13.16.680. If an individual who would
otherwise have been eligible for a dividend and who
did not apply for the dividend dies during the
application period, a personal representative of the
estate or a successor claiming personal property under
AS 13.16.680 may apply for and receive the dividend.
If an individual who received a dividend for the year
immediately before the qualifying year and who would
otherwise have been eligible for a dividend dies
during the qualifying year after having been a state
resident for at least 180 days immediately before the
date of death, notwithstanding (a)(1) - (3) and (a)(6)
of this section, a personal representative of the
estate or a successor claiming personal property under
AS 13.16.680 may apply for and receive the dividend.
Notwithstanding AS 43.23.011, an application for a
dividend may be filed by the personal representative
or the successor under this subsection at any time
before the end of the application period for the next
dividend year.
* Sec. 4. AS 43.23.011(a) is amended to read:
(a) An eligibility form and application for a
permanent fund dividend shall be filed during the
period that begins January 1 and ends March 31 of that
dividend year.
* Sec. 5. AS 43.23.015(b) is amended to read:
(b) The department shall prescribe and furnish
an eligibility [APPLICATION] form for an individual
claiming a permanent fund dividend. The eligibility
form [APPLICATION] must include
(1) notice of the penalties provided for
under AS 43.23.270;
(2) a statement of eligibility and a
certification of residency;
(3) the means for an individual [APPLICANT]
eligible to vote under AS 15.05, or a person
authorized to act on behalf of the applicant, to
furnish information required by AS 15.07.060(a)(1) -
(4) and (7) - (9), and an attestation that the [SUCH]
information is true.
* Sec. 6. AS 43.23.015(c) is amended to read:
(c) Except as provided in (d) of this section or
as may be provided by regulations adopted by the
department, an individual must personally sign the
eligibility form [APPLICATION] for permanent fund
dividends, including the certification of residency
required under (b) of this section.
* Sec. 7. AS 43.23.015(d) is amended to read:
(d) The eligibility form, application, and
certification of residency of an unemancipated
individual under 18 years of age or of a disabled or
an incompetent individual must be signed by the
individual's parent, legal guardian, or other
authorized representative. An individual may complete,
sign, and file an eligibility form and application on
behalf of a member of the armed forces of the United
States who is serving on active duty outside of the
United States if the individual has a power of
attorney from the member of the armed forces that
authorizes, in specific or general terms, the
individual to file that eligibility form and
application.
* Sec. 8. AS 43.23.015(j) is amended to read:
(j) The eligibility [APPLICATION] form for
claiming a permanent fund dividend must include a
place for the individual [APPLICANT] to voluntarily
indicate that the individual [APPLICANT] is a veteran,
the branch of service, including the Alaska
Territorial Guard, and the dates of service.
Notwithstanding AS 43.23.110, the department shall
release information provided under this subsection to
the Department of Military and Veterans' Affairs and
may not otherwise release the information. The
Department of Military and Veterans' Affairs may only
release the information to congressionally chartered
veterans service organizations in the state. The
eligibility [APPLICATION] form must contain notice
that providing the information under this subsection
is voluntary, that the information will be released as
provided in this subsection, and that the veterans
service organizations are not required to keep it
confidential.
* Sec. 9. AS 43.23 is amended by adding a new
section to read:
Sec. 43.23.018. Eligibility form; application.
The department shall prepare an electronic Alaska
permanent fund eligibility form separate from the
dividend application. The eligibility form must allow
an individual to determine the individual's
eligibility for a dividend before applying for the
dividend payment. After the individual submits the
eligibility form, and before the individual applies
for the dividend, the department shall notify the
individual that a dividend not claimed by an eligible
individual is deposited into the general fund, subject
to appropriation.
* Sec. 10. AS 43.23 is amended by adding a new
section to read:
Sec. 43.23.023. Foregone dividends. (a) Each
year, the department shall determine the amount of
foregone dividends. The amount of foregone dividends
is the number of individuals, estates, and successors
that submitted an eligibility form and are eligible to
receive, but do not apply for, the permanent fund
dividend, multiplied by the amount of the dividend for
that year, as calculated under AS 43.23.025(a).
(b) Each fiscal year, the legislature may
appropriate from the dividend fund to the general fund
an amount equal to the amount of foregone dividends
determined under (a) of this section.
* Sec. 11. AS 43.23.025(a) is amended to read:
(a) By October 1 of each year, the commissioner
shall determine the value of each permanent fund
dividend for that year by
(1) determining the total amount available
for dividend payments, which equals
(A) the amount of income of the Alaska
permanent fund transferred to the dividend fund under
AS 37.13.145(b) during the current year;
(B) plus the unexpended and unobligated
balances of prior fiscal year appropriations that
lapse into the dividend fund under AS 43.23.045(d);
(C) less the amount necessary to pay prior
year dividends from the dividend fund in the current
year under AS 43.23.005(h), 43.23.021, and
43.23.055(3) and (7);
(D) less the amount necessary to pay
dividends from the dividend fund due to eligible
applicants who, as determined by the department, filed
for a previous year's dividend by the filing deadline
but who were not included in a previous year's
dividend computation;
(E) less appropriations from the dividend
fund during the current year, including amounts to pay
costs of administering the dividend program and the
hold harmless provisions of AS 43.23.240;
(2) determining the number of individuals
who have applied for and are eligible to receive a
dividend payment for the current year and the number
of estates and successors that have applied for and
are eligible to receive a dividend payment for the
current year under AS 43.23.005(h); and
(3) dividing the amount determined under
(1) of this subsection by the amount determined under
(2) of this subsection."
Page 1, line 3:
Delete "Section 1"
Insert "Sec. 12"
Renumber the following bill sections accordingly.
Page 3, following line 12:
Insert a new bill section to read:
"* Sec. 13. AS 43.23.110 is amended to read:
Sec. 43.23.110. Applicant information
confidential. (a) Except as provided in (c) of this
section, information provided by an individual on a
[EACH] permanent fund dividend eligibility form or
application, except the individual's [APPLICANT'S]
name, is confidential. The department may only release
information that is confidential under this section
(1) to a local, state, or federal
government agency;
(2) in compliance with a court order;
(3) to the individual who or agency that
files an eligibility form or application on behalf of
another;
(4) to a banking institution to verify the
direct deposit of a permanent fund dividend or correct
an error in that deposit;
(5) as directed to do so by the individual
[APPLICANT];
(6) to a contractor who has a contract with
a person entitled to obtain the information under (1)
- (5) of this section to receive, store, or manage the
information on that person's behalf; a contractor
receiving data under this paragraph may only use the
data as directed by and for the purposes of the person
entitled to obtain the information;
(7) to the division of elections as
required by AS 43.23.101.
(b) Notwithstanding (a) of this section, the
department may release the names and addresses of
individuals who have filed an eligibility form or
application for a permanent fund dividend [APPLICANTS]
to a legislator of this state and to the legislator's
office staff for official legislative purposes.
(c) Information submitted on a permanent fund
dividend eligibility form [APPLICATION] that is used
for the purpose of registering an individual
[APPLICANT] to vote under AS 43.23.101 shall be kept
confidential by the division of elections as provided
in AS 15.07.195."
Renumber the following bill sections accordingly.
Page 4, following line 4:
Insert new bill sections to read:
"* Sec. 15. AS 43.23.200(a) is amended to read:
(a) Except as provided in (b) of this section, a
person who has applied for and is eligible to receive
a permanent fund dividend may not assign the right to
the dividend. An attempted assignment of the right to
receive a permanent fund dividend is against public
policy and is void.
* Sec. 16. The uncodified law of the State of
Alaska is amended by adding a new section to read:
APPLICABILITY. This Act applies to the permanent fund
dividend 2024 qualifying year for the 2025 permanent
fund dividend."
CHAIR CARRICK objected for the purpose of discussion.
REPRESENTATIVE HOLLAND explained that Amendment 3 was a follow-
up to the discussion from prior hearings. He talked about the
option for somebody to opt out of the PFD and roll it back into
the state general fund (GF). He explained that there would be
two potential issues to the idea. One was that currently, if
someone chooses not to take the PFD, their money will go into
the general PFD pool to increase other applicant dividends. He
said the way the application process is structured, if someone
were to somehow designate it to go to the GF, it would still be
considered a "taxable" personal decision. He commented on
previous discussions about how to avoid taxable debt. He said
simply put, Amendment 3 would split up the process of PFD
eligibility and PFD application. He said that by not filling
out the application, the Alaska Permanent Fund Corporation
(APFC) would be able to "sweep up" the eligible dividends that
were not received by anyone. He said that it is a plausible
pathway to avoid federal tax stipulations but said that this may
not be easy to implement.
CHAIR CARRICK said that the PFD Division could speak to
Amendment 3.
4:33:49 PM
MS. WOJTUSIK explained that the PFD Division has only begun
looking at Amendment 3 and would require some time to review it.
She said the current bill has an indeterminate fiscal note for
programming costs and Amendment 3 might need an additional
fiscal note for staffing. She said that as Representative
Holland alluded to, Amendment 3 would split the process up and
this may require some additional "manpower." She said the
division would need more time to evaluate and report on any
impact to the bill's fiscal note.
4:34:52 PM
MR. NYE said that he has looked extensively into this issue and
while he found that the proposed method may technically work, it
is not the solution that Representative Prax was looking for.
He said that this would provide Alaskans with an "all or
nothing" approach to donating to the GF and the intent is to
find a solution to the federal income tax that would allow for
donations in increments. He said that from what he found, such
a solution does not seem to exist. He said the bill sponsor
intended to "veer away" from this path.
4:35:39 PM
REPRESENTATIVE HIMSCHOOT asked why an Alaskan would bother to
establish eligibility if they did not want to receive a
dividend. She said that she was unsure how many people would do
this.
4:36:16 PM
REPRESENTATIVE HOLLAND responded that he knew many individuals
that would like to use the dividend to pay for things. He
talked about the legal ways for someone to give the dividend
back. He said someone would have to be motivated to help pay
for a particular state or all state services. He acknowledged
that there was uncertainty to the mechanics of this and it may
not be aligned with the bill sponsor's intent.
REPRESENTATIVE HOLLAND [moved to withdraw] Amendment 3, noting
appreciation for its consideration but acknowledged that it
would not address "what the sponsor is wanting to do."
CHAIR CARRICK noted, [there being no objection], Amendment 3 was
withdrawn. She remarked that a lot of Alaskans may be unaware
that the dividend is subject to federal tax, including the
donations. She said that this is a worthwhile issue to look at.
CHAIR CARRICK ascertained there was no further discussion on HB
11.
4:38:22 PM
REPRESENTATIVE STORY moved to report HB 11, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes and to authorize Legislative Legal Services to make
any necessary technical and conforming changes. There being no
objection, CSHB 11 (STA) was reported out of the House State
Affairs Standing Committee.