Legislature(1993 - 1994)

03/03/1994 01:30 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                 
            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                 
  employees  are treated the same  as military and should also                 
  be eligible for the Permanent Fund Dividend (PFD).                           
  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                 
  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                 
  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.                                                 
  (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.                                         

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