Legislature(2013 - 2014)CAPITOL 106
01/29/2013 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB1 | |
| HB52 | |
| HB1 | |
| HB52 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 1 | TELECONFERENCED | |
| *+ | HB 52 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 52-PFD ALLOWABLE ABSENCE
8:37:10 AM
CHAIR LYNN announced that the next order of business was HOUSE
BILL NO. 52, "An Act relating to allowable absences from the
state for purposes of eligibility for permanent fund dividends;
and providing for an effective date."
CHAIR LYNN announced that he would change the usual order that
the committee hears bills to accommodate a person calling from
Japan to testify.
8:37:34 AM
BRIAN ROSS stated that he is a life-long resident of Alaska. He
referred to a letter he wrote to the legislature, [dated January
28, 2013, included in the committee packet], in support of HB
52. He said he has been working to remove the 10-year rule that
applies to the permanent fund dividend (PFD) and Alaska career
military personnel. He relayed that he has been involved in
court cases and appeals all the way to the Alaska Supreme Court,
but he has been continually denied the PFD. He expressed hope
that his personal story and his thoughts on how the 10-year rule
unfairly penalizes those in the military will convince [the
legislature] to support HB 52. He said, "I want to be able to
point out that the testimony I provide today is [in] no way
endorsed by the [U.S.] Department of Defense or constitutes an
endorsement by the Marine Corps; ... I'm testifying as a private
citizen, too."
8:39:38 AM
REPRESENTATIVE ERIC FEIGE, Alaska State Legislature, sponsor,
introduced HB 52. He noted that similar bill language made it
most of the way through the process in the 27th Legislative
Session as House Bill 190. He said a few years ago, the
legislature received an e-mail from Lieutenant Commander Tiko
Crofoot, a Navy Seal currently active in the fight against
terrorism worldwide and an Alaskan who has been stationed
outside of Alaska for his entire military career. Like the
previous testifier, Lt. Commander Crofoot is a career military
officer who has been an Alaska resident from the beginning of
his career and is running up against the statutory 10-year
limitation in receiving a PFD, even with an allowable absence
away from the state.
REPRESENTATIVE FEIGE said the state cannot single out a
particular class of people to receive one benefit or another.
He explained that the proposed legislation focuses on a person's
intent to return to Alaska after an allowable absence.
Currently, he related, there are 16 allowable absences in
statute for which the Permanent Fund Division assumes that the
recipient intends to return to Alaska after the first five
years. He said those allowable absences fall under certain
categories: service to the nation or the state in the case of
military service; being the spouse of a military member; leaving
the state for medical reasons or to take care of a sick
relative; and being out of state for education purposes. Under
HB 52, a person would have to prove he/she intends to return to
Alaska in order to qualify for a PFD beyond the current
allowable absence period. He said the proposed legislation
would incorporate current regulation into statute, which would
give more specific direction to administrative law judges for
the appeals process. Further, it would remove the 10-year limit
on being able to receive a dividend because of an allowable
absence, which, for example, would make it possible for someone
to pursue a military career and continue to receive the benefits
that all Alaska residents receive in the form of the PFD.
[The committee returned to HB 52 later in the hearing.]
HB 52-PFD ALLOWABLE ABSENCE
8:46:35 AM
CHAIR LYNN returned the committee's attention to HB 52.
8:46:36 AM
MICHAEL PASCHALL, Staff, Representative Eric Feige, Alaska State
Legislature, presented HB 52 on behalf of Representative Feige,
sponsor. He gave a PowerPoint presentation to illustrate how
allowable absences have been handled by the state since the
inception of the PFD. He said as of 1982, the PFD had six
specific allowable absences, [including] the ability of the
commissioner to establish an allowable absence by regulation.
In 1997, there were four allowable absences added to statute,
the ability of the commissioner to add allowable absences
through regulation remained in statute, and the definition of a
state resident was adjusted, incorporating other portions of
Alaska statute. He noted that AS 01.10.055 pertains to a
standard condition of residency in the state.
MR. PASCHALL relayed that in 1998, statutes were essentially
revamped, but the definition of residency remained the same. He
indicated that allowable absences were reworded to address legal
issues, but said that most of the allowable absences did not
actually change in terms of what they allowed. He said there
were additional items added as allowable absences, including the
eligibility of someone to accompany someone else who is on an
allowable absence. New language was added to statute to clarify
that no one could be absent from the state for more than 180
days unless he/she qualified for one of the current 12 allowable
absences. If an individual claimed allowable absence for
educational reasons, they could only be absent 120 days outside
of that allowable educational allowance. Further, once any of
the other allowable absences ended, an individual covered under
one of them could only be absent for an additional 45 days. In
order to claim an allowable absence, a resident had to be a
resident for six consecutive months before leaving the state.
Mr. Paschal said this was an addition that occurred prior to
1998. Anyone on an allowable absence could only receive that
allowable absence for ten years, except for members of Congress,
their staff, and their families. He pointed out that this
provision did not impact anyone until [2008].
MR. PASCHAL stated that what appears to be an unintended
consequence from the point of view of the sponsor is that
someone in the military serving Alaska loses his/her dividend.
He offered his understanding that there has been only one
individual who qualified for the dividend after the ten years
under AS 43.23.008(c).
8:51:40 AM
MR. PASCHALL said 2012 saw the addition of allowable absences
for those: accompanying an individual serving in the military,
such as a spouse, a minor dependent, or a dependent child;
serving under [foreign or] coastal articles of employment in the
U.S. Merchant Marine; serving as a volunteer in the Peace Crops;
training or competing as a member of the U.S. Olympic Team; and
participating in a student fellowship. Further, Mr. Paschall
related, the definition of "family member" was added.
8:53:15 AM
MR. PASCHALL said under HB 52, the 10-year rule, under Section C
in statute, would be removed.
8:53:43 AM
MR. PASCHALL, in response to Representative Millett, offered his
understanding that members of Congress and their family members
were exempted from the ten-year rule in 1998, when the original
10-year rule was put in place.
8:54:28 AM
MR. PASCHALL said under HB 52, statute would require that the
state assume an individual who has been out of the state for
more than five years does not intend to return to Alaska;
presently that assumption is outlined only under regulations.
He stated that the bill sponsor believes that putting the
requirement in statute will make it more effective.
Furthermore, HB 52 would change from regulation to statute the
30-day rule that requires a person to return to the state. In
response to Representative Keller, he said the sponsor did not
choose to make many significant changes, and the 30-day rule has
to do with an individual who is out of state for a certain
number of days. He deferred to a representative from the
division to offer more specific details. He said the five-year
rule pertains to the original five years in which there are less
requirements for a person to prove his/her intent to return to
the state. In response to Representative Isaacson, he
reiterated that the five-year rule is presently in regulation.
He said with most allowable absences, after five years' time the
person - for example, a college student - should have been able
to return to Alaska. In response to Representative Isaacson, he
indicated that the division would be able to evaluate whether or
not a person, who had continued on to graduate school with plans
to matriculate, had no plans to become a life-long student.
8:57:38 AM
REPRESENTATIVE KELLER directed attention to language on page 3,
line 23, of HB 52, which read, "the department shall consider",
and he asked if that language was taken from regulations. He
questioned whether the legislature should "put some weight on
these."
8:58:10 AM
MR. PASCHALL said HB 52 adopts current regulation, with some
adjustments to "make it a little stronger." He said the
criteria considers how long someone has been absent from the
state compared to the length of time he/she was physically
present in the state. For example someone who was in the state
for 18 years prior to being absent for 5 years might have much
stronger ties to the state than someone who was in the state for
3 years before being absent for 5 years. Another consideration
is the frequency and duration of return trips to the state
beyond the minimum 30-day required days and whether the
individual is making choices that would improve his/her ability
to return to the state versus decisions that keep him/her out of
the state, such as the previous example of the life-long out-of-
state student.
MR. PASCHALL listed the following demonstrations that an
individual has established ties with the state or another
jurisdiction: maintenance of a home; payment of resident taxes;
registration of a vehicle; registration to vote and voting
history; acquisition of a driver's license, business license, or
professional license; and receipt of benefits under a claim of
residency in the state or another jurisdiction. He said the
sponsor and the division envisions a scoring system that could
be used by the division in determining a person's intent to
return to Alaska.
9:00:34 AM
REPRESENTATIVE HUGHES suggested consideration be given to those
who have never been a resident of another state, because they
essentially would be "without a home state" when "they hit that
10-year mark under the current law."
9:01:29 AM
MR. PASCHALL clarified, "This isn't residency in Alaska; it's
residency for the purposes of a permanent fund dividend. So,
they don't become a nonresident after 10 years." Regarding
Representative Hughes' suggestion, he said he thinks the
division would have the authority to consider whether someone
had ever been a resident of another state as part of its
criteria, but it may be necessary to consider the equal
protection clause in the Constitution [of the State of Alaska].
REPRESENTATIVE HUGHES said she wondered about "that very same
thing."
9:02:23 AM
MR. PASCHALL said the last criteria under HB 52 would address
employment and career choices and provide some flexibility to
the division in that regard.
9:02:55 AM
REPRESENTATIVE ISAACSON directed attention to language shown in
the PowerPoint, which read: "(5) the priority that the
individual gave the state on an employment assignment preference
list, including a list used by military personnel;" He asked,
"Does the military give the dream list to the state?"
MR. PASCHALL offered his understand that that is correct or that
the individual has to provide some type of documentation to the
division. He deferred to the division for further clarification
of its procedures.
REPRESENTATIVE ISAACSON questioned whether the language would
create an expectation by some military members that they could
have documentation given to them by the U.S. Department of
Defense (DoD) that the DoD might not release.
MR. PASCHALL said this language is already in regulations, and
he does not think putting it into statute would cause a problem
for the division in terms of verification.
9:03:59 AM
REPRESENTATIVE HUGHES observed that it was contact from military
personnel that instigated the proposed legislation. She asked,
"Is there any other type of area ... that might be impacted by
this change to get beyond that 10-year mark other than
military?"
MR. PASCHALL answered that he does not want to speculate too
much, because what is being considered here is not "whether they
are on an allowable absence," but "whether they are likely to
return to the state." He said that the sponsor does not want to
exclude a particular criterion "for that purpose." He said
there also have been questions about equal protection as it
relates to exclusions. He related that the Alaska Supreme Court
case, Ross v. State, "did change that ... a little bit," but
said, "... we didn't feel like we wanted to go back and make
changes to fill and raise that question."
REPRESENTATIVE HUGHES asked if those who reached the 10-year
mark in the past and have maintained their residency would,
under HB 52, be able to apply for the 2013 PFD.
MR. PASCHALL directed attention to Section 4 of the proposed
legislation, which addresses application for the 2013 PFD for
certain individuals. He said those who are ineligible because
of the 10-year rule, which would be repealed under HB 52, would
have 90 days from enactment of the proposed legislation to
apply.
REPRESENTATIVE HUGHES asked for clarification that someone who,
for example, reached the 10-year mark in 2008, but would
otherwise be eligible, would be eligible to apply during that
90-day period.
MR. PASCHALL answered that that is the intent of the proposed
legislation.
9:06:51 AM
REPRESENTATIVE HUGHES said she had not previously understood
that. She declared a conflict of interest, because HB 52 could
result in direct benefit to her adult son who is active military
and hit his 10-year mark in 2009.
9:07:18 AM
MR. PASCHALL, in response to Representative Isaacson, said the
exclusion for members of Congress, their staff, and their
families, has applied to only one individual. In response to a
follow-up question, he said the number of military personnel who
could be affected by HB 52 may be slightly over 100.
9:08:06 AM
REPRESENTATIVE ISAACSON directed attention to the following
language in the PowerPoint: "(6) whether the individual made a
career choice or chose a career path that does not allow the
individual to reside in or return to the state." He asked, "By
doing this, does this allow us to actually expend more money
than we're anticipating to give folks who have the idea that
they're coming back another 10 years to collect the permanent
fund [dividend] only to find them retiring at their last duty
station and not returning anyway?"
MR. PASCHALL stated that the intent under HB 52 is that over
time it would become increasingly more difficult for an
individual to show his/her intent to return. He said a person
who has been in the military for 18 years should have some
reason to return to Alaska and should be able to illustrate that
reason. For example, the person may have purchased a retirement
home in the state. He said the focus under HB 52 is for the
division to look for proof that a person intends to come back to
the state.
9:10:11 AM
REPRESENTATIVE ISAACSON noted that some states require that a
person register his/her vehicle with that state. He asked how
that might affect the division's decision, when that person also
may not own a home in Alaska. He questioned whether this may be
getting too complicated for the division.
MR. PASCHALL responded that the division is already using "these
items" through regulation, and the intent of the proposed
legislation is to give the division "the opportunity to score
these items." The idea is to give the division the opportunity
to develop something that is more objective and less subjective
in the evaluation process. Regarding vehicle registration, he
offered his understanding that no member of the military on
active duty is forced to change his/her car registration or
residency.
CHAIR LYNN offered his understanding that the bill sponsor was
nodding his head in the affirmative.
REPRESENTATIVE ISAACSON clarified, "Not change their state of
residency, but they may be required to change their vehicle
registration." He said that happened to him.
9:12:14 AM
REPRESENTATIVE MILLETT remarked that under HB 52, the burden of
proof would be on the applicant.
MR. PASCHALL responded that is correct. He said the division's
responsibility is in ensuring that the documents provided by the
applicant have not been falsified.
9:12:56 AM
REPRESENTATIVE HUGHES noted that there is a zero fiscal note.
She questioned whether the workload of the division would be
increased under HB 52, and asked how many people would be
impacted on an annual basis "if they don't prove that they'd
fall off the rolls as far as eligibility."
MR. PASCHALL reiterated that the division is already using most
of these criteria; however, he stated, "They sometimes lose on
an administrative appeal." He indicated the reason for changing
regulations to statute is "so that they're stronger in their
presence once it goes to an appeal." He said approximately
13,000 people "in a given year" are beyond the five-year
[allowable absence period]. In response to a follow-up
question, he said one of the things that cannot be determined is
how many people will end up not returning to the state.
9:15:21 AM
REPRESENTATIVE GATTIS referred to the aforementioned language in
the PowerPoint: "receipt of benefits under a claim of residency
in the state or another jurisdiction;" She offered her
understanding that according to this language, a military person
living in another state could become a resident of that state
for "homestead exemption purposes" and still qualify for the
PFD.
MR. PASCHALL clarified that anyone who takes any benefits by
claiming residency in another state would lose his/her
eligibility to receive the PFD. The PFD program is for
qualified residents of Alaska, he said.
REPRESENTATIVE GATTIS noted that her husband is an international
airline pilot, and "there was a time that the PFD was not
allowed to him because he's gone for 180 days a year or more."
She expressed appreciation that the bill sponsor is attempting
to "tighten it up for those that are intending to continue being
residents and coming back." In response to the chair, she said
the issue was cleared up so that her husband is now able to
receive the PFD.
9:17:58 AM
REPRESENTATIVE KELLER expressed appreciation to the sponsor for
bringing the proposed legislation forward. He again directed
attention to language on page 3, line 23 [text provided
previously], and asked if it is specific enough. He expressed
unease about the subjective nature of the criteria we're laying
out. He said he can see that the division may be comparing one
person's coming back to the state 20 times versus someone else's
coming back 3 times. He said he would like to hear from
Legislative Legal and Research Services that the proposed
legislation would not result in litigation for the state.
9:19:49 AM
HILLARY MARTIN, Attorney, Legislative Legal and Research
Services, Legislative Affairs Agency, to Representative Keller's
stated concern, said she thinks the [division] would have to
consider "all of these factors" when looking at an application.
She said she is not sure how much tighter the language could be.
9:21:00 AM
CHAIR LYNN, after ascertaining that there was no one else who
wished to testify, closed public testimony.
9:21:20 AM
The committee took an at-ease from 9:21 a.m. to 9:23 a.m.
9:23:24 AM
REPRESENTATIVE KELLER remarked that the House State Affairs
Standing Committee is the only committee of referral for HB 52
before it is heard on the House floor.
9:23:34 AM
REPRESENTATIVE KELLER moved to report HB 52 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 52 was reported out of the
House State Affairs Standing Committee.