Legislature(1993 - 1994)
03/03/1994 01:30 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 364 An Act relating to allowable absences from the state for purposes of eligibility for permanent fund dividends; and providing for an effective date. HB 364 was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Revenue dated 2/14/94. HOUSE BILL 364 "An Act relating to allowable absences from the state for purposes of eligibility for permanent fund dividends; and providing for an effective date." REPRESENTATIVE JIM NORDLUND stated that HB 364 proposes to add two additional allowable absences to the definition of a state resident for the purposes of determining eligibility for permanent fund dividends. Those exemptions would be service in the United States Merchant Marines and service in the commissioned corps of the United States Public Health Service (PHS). He believed that both of the circumstances are substantially similar to the already existing exemption for military service and that they should be granted the same exemption status. Under federal law, the PHS Commissioned Corps are designated as one of the seven "uniformed services" of the Armed Forces. The rank structure is identical or similar to that of the US Navy. PHS officers wear military uniforms and are issued military ID cards. They also receive the same pay and allowances, medical and dental care, Veteran's Administration benefits, life insurance, and voting rights as other branches of the Armed Forces. They are subject to military flight, base and exchange privileges and they are subject to the same obligations. Currently, there are a total of 532 active duty PHS officers who claim Alaska residence. Of that total, 191 are assigned to duty stations outside Alaska. Representative Nordlund added that the United States Merchant Marines are overseen by the maritime Administration (MARAD). MARAD is charged by the President of the United States with the responsibility of developing and maintaining a merchant marine capable of meeting America's defense and commercial trade requirement. Representative Nordlund stated that there has been a superior court decision issued which applies to this legislation. The court ruled that Public Health Service 2 employees are treated the same as military and should also be eligible for the Permanent Fund Dividend (PFD). THOMAS WILLIAMS, DIRECTOR, PERMANENT FUND DIVISION, DEPARTMENT OF REVENUE, stated that the Division has received from the Public Health Service, a list of individuals who have claimed Alaska residency. He added that 625 individuals are claiming Alaska residency as of December, 1992. Of those, 124 were no longer in active duty in the Public Health Service and there are 200 who are claiming Alaska residency who are stationed outside the State. Mr. Williams pointed out that under the current allowable absence provision, the Commissioner has the authority to add allowable absences as authorized by the Legislature. The Commissioner has to date, declined to add merchant mariners or PHS officers. He added, through the court case, the plaintiffs are asking for the same treatment as the military receives. Mr. Williams discussed the status of individuals serving in the Merchant Marines. Current statutes allow an individual to maintain an eligibility period for the dividend up to half of that period being one hundred eighty days and they can work a temporary job during that time. Representative Hanley asked if the International Guard personnel were to receive the PFD. Mr. Williams stated, that they are on active duty and are considered armed forces. Representative Hanley remarked that Merchant Marines are often employed by private companies and he felt they should be designated by a different class. Discussion followed among Committee members regarding the number of active duty PHS officers connected with Alaska and the similarities between PHS officers and the Armed Service Officers. Representative Therriault stated that the permanent fund dividend should be available for those persons who are residents of the State and who live in Alaska. JOE JOSEPHSON, (TESTIFIED VIA TELECONFERENCE), RETIRED SENATOR, ATTORNEY, ANCHORAGE, spoke in support of the legislation. He stated that he represented the plaintiff, reiterating that PHS officers receive essentially all benefits accorded military members. They are subject to analogous obligations. The PHS Commissioned Corps is distinguishable simply because it's purpose differs from that of the other Federal Uniformed Services. He referenced a case regarding Captain McCarthy, stating that to date one superior court judge has held the distinction under the status quo unconstitutional. 3 (Tape Change, HFC 94-47, Side 1). Representative Hanley understood that for thirteen years, PHS officers were treated as military and that they were allowed to be absent, although this provision has changed. Mr. Williams noted only twelve dividends were issued in 1991. The Department has been denying PHS officers the PFD. Co-Chair Larson outlined the number of provisions which would allow a person to be outside the State and continue to receive their PFD check. He suggested that the Department reexamine criteria used to determine if an individual should be exempt or not. Co-Chair Larson indicated his concern that a person could be absent on vacation and continue to receive the PFD check. Mr. Williams advised that the only instances where an individual could have been absent for more than 180 days, and that part of that time was for vacation, would be if that person already had a fully allowable absence in conjunction with that vacation. Co-Chair Larson stressed that most persons, following their first year out of the State, would be eligible for the PFD check. Mr. Williams reiterated that there is a 180 day limitation in order to qualify for fully allowable absences. He pointed that out these decisions are determined by the Legislature and then the Department implements the decisions. Representative Parnell asked if the Supreme Court upholds the lower court decision, would Merchant Mariners also be eligible to receive the PFD. Mr. Williams replied that if the Department loses at the Supreme Court level, under current law, a regulation would be adopted making PHS a fully allowable absence. There is no case before the Department at this time regarding the Merchant Mariners. Representative Foster MOVED to report HB 364 out of Committee with individual recommendations and with the accompanying fiscal note. HB 364 was reported out of Committee with "no recommendation" and with a zero fiscal note by the Department of Revenue dated 2/14/94.