03/31/2011 08:00 AM House STATE AFFAIRS

             HB 190-PFD ALLOWABLE ABSENCE: MILITARY                                                                         
                                                                                                                                
9:47:19 AM                                                                                                                    
                                                                                                                                
CHAIR LYNN  announced that the  last order of business  was HOUSE                                                               
BILL  NO. 190,  "An Act  relating  to the  allowable absence  for                                                               
active duty service  members of the armed forces  for purposes of                                                               
permanent fund dividend eligibility."                                                                                           
                                                                                                                                
9:47:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ERIC FEIGE, Alaska  State Legislature, as sponsor,                                                               
introduced HB 190.  He asked  committee members to keep in mind a                                                               
quote  by  Winston  Churchill,  on  the  bottom  of  the  sponsor                                                               
statement  [including in  the committee  packet],  which read  as                                                               
follows:                                                                                                                        
                                                                                                                                
      We sleep soundly in our beds because rough men stand                                                                      
       ready in the night to visit violence on those who                                                                        
     would do us harm.                                                                                                          
                                                                                                                                
REPRESENTATIVE  FEIGE said  a  law was  passed  in 1998  allowing                                                               
Alaskans absent  from the state  for specific  reasons, including                                                               
service in  the military,  to qualify  for the  state's permanent                                                               
fund  dividend   (PFD);  however,  with  the   exception  of  the                                                               
allowable absence to  those serving in U.S. Congress,  a limit of                                                               
10 years  was set.   Representative  Feige opined  that it  is an                                                               
injustice to apply the 10-year rule  to those in the military but                                                               
not  to  those  in  Congress,  and  HB  190  would  correct  that                                                               
injustice.                                                                                                                      
                                                                                                                                
REPRESENTATIVE   FEIGE   directed   attention  to   a   committee                                                               
substitute  (CS)   for  HB  190,  Version   27-LS0564\D,  Kirsch,                                                               
3/28/11,  which  he said  adds  clarification  to the  originally                                                               
proposed exemption.  He said  the bill would specifically address                                                               
those Alaskans  who grow up in  the state and volunteer  to serve                                                               
in the  military, so that  the state  does not penalize  them for                                                               
choosing a career in the military.                                                                                              
                                                                                                                                
9:50:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  the committee  substitute                                                               
(CS) for HB 190, Version  27-LS0564\D, Kirsch, 3/28/11, as a work                                                               
draft.                                                                                                                          
                                                                                                                                
REPRESENTATIVE GRUENBERG objected for the purpose of discussion.                                                                
                                                                                                                                
9:51:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON asked  the bill sponsor to  provide a legal                                                               
memorandum describing  how this issue differs  from the longevity                                                               
bonus issue.   He said he  would like to know  the percentages of                                                               
those with various  allowable absences who return to  Alaska.  He                                                               
said the  legal question relating  to allowable absences  is that                                                               
the more  tenuous the allowable  absence becomes for a  proxy for                                                               
physical  residence,  the more  likely  it  is that  the  federal                                                               
government  will  declare that  the  entire  fund will  become  a                                                               
taxable entity.                                                                                                                 
                                                                                                                                
9:54:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON mentioned a  law suit and  talked about                                                               
some  people  in the  military  claiming  Alaska residency  while                                                               
having no  intention of returning.   She said she would  like the                                                               
bill sponsor  to find out  if the law  suit and the  10-year rule                                                               
are related.                                                                                                                    
                                                                                                                                
9:55:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE clarified  that  the bill  is designed  for                                                               
those  who have  a  record  of being  Alaska  residents prior  to                                                               
joining the armed forces; it really  does not apply to people who                                                               
come from the Outside and get stationed in Alaska.                                                                              
                                                                                                                                
9:56:04 AM                                                                                                                    
                                                                                                                                
TIKO CROFOOT, Lieutenant Commander,  U.S. Navy, testified that he                                                               
has been an Alaska resident since  he was four years old, and the                                                               
only reason he  left Alaska was to attend a  naval academy, after                                                               
which  he has  served with  the  U.S. Navy  for approximately  13                                                               
years.   He said  that because  of the 10-year  rule, he  has not                                                               
received a PFD for the past three  years.  He relayed that he has                                                               
voted in all  Alaska elections [since voting age],  has an Alaska                                                               
driver's license, owns  property in Alaska, and  is part-owner in                                                               
a family business in Alaska.                                                                                                    
                                                                                                                                
LIEUTENANT COMMANDER CROFOOT said  he understands the rules about                                                               
residency as they relate to  keeping the PFD intact and [guarding                                                               
against]  people milking  the  system; however,  he  said he  has                                                               
every intention of  returning to Alaska following  service in the                                                               
military.   He asked the legislature  to change the PFD  rules to                                                               
reflect an intention by the state  not to penalize those who make                                                               
a career choice to serve in the military.                                                                                       
                                                                                                                                
9:58:34 AM                                                                                                                    
                                                                                                                                
BRIAN ROSS,  Lieutenant Colonel,  U.S. Marine Corp,  testified in                                                               
support of HB 190.  He stated that  he was born in Alaska, and he                                                               
related his history with the military.   He said he has an Alaska                                                               
driver's license,  has been  a registered  voter in  Alaska since                                                               
turning 18,  has designated his  residency as Alaska on  his last                                                               
will  and  testament, owns  property  near  Glen Allen,  and  has                                                               
family in  Alaska.   He said  he has  spent at  least 80  days in                                                               
Alaska in the last  five years alone.  He said  he was denied his                                                               
dividend  in 2009  and has  filed  for an  Alaska Superior  Court                                                               
judicial review, as  allowed under Alaska statute.   He asked the                                                               
committee  whether he  is  less  deserving of  a  PFD because  of                                                               
having chosen a  military career, which results  in his exceeding                                                               
the 10-year rule.                                                                                                               
                                                                                                                                
LIEUTENANT COLONEL ROSS  said he chose his  military career eight                                                               
years before  AS 43.23.006 became law.   He stated that  on every                                                               
PFD  application he  has signed  for the  last 20  years, he  has                                                               
sworn that  he intends  to return to  Alaska upon  his retirement                                                               
from the military.  He  said many military personnel change their                                                               
stated  residency  throughout  their  careers in  order  to  take                                                               
advantage of  resident state taxes and  in-state college tuition,                                                               
for  example,  but  he  never  changed  his  home  of  record  or                                                               
residency from Alaska  in his 20 years in the  military.  He said                                                               
he has lived in six states  and one foreign country, but has ties                                                               
only to  Alaska.  He encouraged  the committee to pass  HB 190 to                                                               
allow lifetime  Alaskans who are  military personnel  to continue                                                               
to receive  their PFDs.   He further  requested that the  bill be                                                               
made retroactive to 2009.                                                                                                       
                                                                                                                                
[HB 190 was held over]                                                                                                          
[The  objection  by Representative  Gruenberg  to  the motion  to                                                               
adopt  the committee  substitute  (CS) for  HB  190, Version  27-                                                               
LS0564\D, Kirsch, 3/28/11, as a work draft, was left pending.]