Legislature(1993 - 1994)
01/24/1994 01:15 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 75 - QUALIFICATIONS FOR PFD'S BY MILITARY Number 020 REP. ELDON MULDER, Prime Sponsor of HB 75, testified that he believed the concerns raised at the last meeting had been worked out, and he presented the committee with a new work draft. He said the work draft codifies a lot of the regulations that were previously being implemented; however, HB 75 reenforces those actions in statute. Rep. Mulder continued by saying it also resolves some of the concerns reflected by committee members about treating everybody equal. REP. MULDER said the bill contains two issues now: resolving the piggyback question and answering the policy question. He stated that the state of Alaska should not be discriminatory towards spouses of non-resident military personnel if they are traveling out-of-state. Number 080 REP. DAVIDSON asked Rep. Mulder if he was fully satisfied that, as far as measuring intent, the Permanent Fund Dividend (PFD) program is adequately addressing through HB 75 the measure of intent to remain an "Alaskan resident." Number 098 REP. MULDER replied yes. Number 100 REP. DAVIDSON asked what the primary basis is for intent to be measured. Number 118 TOM WILLIAMS, Director, Permanent Fund Dividend Division, Department of Revenue, testified that they had reviewed the revised committee substitute and it contained provisions which addressed the piggyback problem. Mr. Williams said there was still language in Section 2 that the department had substantial concerns about which would allow a resident to remain eligible while accompanying a non-resident military member out-of-state. Mr. Williams provided statistics to the committee regarding the amount of money going out-of-state to PFD recipients. He concluded by saying the department still raises concerns about the intent of the program to individuals who maintain their residents here, and Section 3 precludes the department from even considering the residency of a spouse in trying to determine their intent to remain permanently in the state. Number 190 REP. DAVIDSON discussed a scenario whereby a non-resident marries a resident, becomes eligible for the PFD, moves, divorces, and the resident returns. He asked what happens to the non-resident's eligibility. Number 231 MR. WILLIAMS replied that he believes the scenario described was already covered in statute where the individual can remain eligible as long as he or she meets the criteria. He explained the department's concern was over a non-resident marrying a resident, and the family leaves the state. He said currently this would be a nonallowable absence, but under HB 75 it would be allowed. The bigger concern, however, was two non-residents moving into the state and one declaring residency, obtaining eligibility for self and children, and then the whole family leaves the state. Mr. Williams said at that juncture, under HB 75, the individual and children would retain their eligibility for dividends. Number 277 REP. DAVIDSON asked for the department's recommendations for plugging the leak. Number 281 MR. WILLIAMS said he didn't know if there was a way to do so under HB 75. He concluded that the solution would be for both individuals to declare residency, and then under the current laws and regulations they could remain eligible while out-of-state. Number 296 REP. PHILLIPS stated that the department could charge people with fraud if they take the money and are gone with absolutely no intent to return. Number 308 MR. WILLIAMS told the committee that Rep. Phillips was right except the department can only determine intent by an individual's external actions, and HB 75 was directing the department to ignore certain external signs of intent. Number 318 REP. PHILLIPS said it was a matter of weighing the balance: are more people going to be positively affected doing it this way versus the state having to file lawsuits for fraud. Number 323 MR. WILLIAMS said as a practical matter the department wouldn't be filing fraud if an individual leaves with a non- resident because intent could change at any time. He explained that's why the department thinks HB 75 is inconsistent, because there is a likelihood that many of these people say they have the intent to return to Alaska, but they are leaving with a spouse who also doesn't have the intent to return. Number 345 REP. PHILLIPS stated that at the end of a two-year period, if the family has been gone with no external action on their part to return, wouldn't that be a strong determining factor for a fraud suit? Number 350 MR. WILLIAMS replied that intent can change at any time and that the individuals would lose their eligibility if they didn't come home to Alaska in that two-year period. Number 359 REP. GREEN asked if the department required proof that individuals return at the end of two years. Number 366 MR. WILLIAMS replied yes. Number 380 REP. NORDLUND stated that the new list of allowable absences is greatly embellished from what it is now, and asked where the language came from. Number 396 MR. WILLIAMS responded that the allowable absences in HB 75 are currently in regulations, and this moves them into the bill. Number 409 REP. NORDLUND questioned Number 14, which says an individual actively participating in a U.S. athletic team as a nonprofessional is eligible, and he doesn't see that authority in statute. Number 414 MR. WILLIAMS replied that there is a provision in current statutory language that the commissioner may establish eligibility for other reasons by regulations. He said this provision is deleted in HB 75, and the department supports the move. Number 441 REP. KOTT discussed the requirement to return to the state every two years to retain eligibility, and asked if an individual could come back for the sole purpose of retaining the eligibility to receive the PFD, and if so, how long would they have to stay. Number 479 MR. WILLIAMS replied that an individual can come back solely to retain eligibility for PFD, and there is no time length; and it often happens that an individual just comes back, touches Alaska, and leaves. Number 485 REP. PHILLIPS asked at what point in time does it become uneconomical to do that, and do Alaska resident children have to accompany the individual? Number 495 MR. WILLIAMS responded that the children do have to accompany the adult to qualify, but if just the parent comes, that parent is qualified. Number 496 REP. PHILLIPS discussed a situation where an Alaskan gets an appointment to a joint state/federal task force and ends up spending more time in Washington, D.C., than in Alaska. He said there is no provision for the individual to qualify for a PFD and wondered why. She also asked if that had ever come up or a request been made on the matter. Number 506 MR. WILLIAMS replied that there is no provision unless they are a state employee. Number 515 Discussion ensued on the two-year rule. Number 535 REP. DAVIDSON remarked that it would solve a lot of problems if the definition of a resident was a person physically in Alaska without exception. MR. WILLIAMS agreed that it would be easier for the department to administer. Number 562 REP. MULDER remarked that military personnel are serving Alaskans and it would be a punishment to deny them PFD's. The committee discussed eligibility and residency relating to military personnel. REP. PHILLIPS moved for passage of the Committee Substitute for HB 75, the version dated January 21, 1994. There were no objections. REP. PHILLIPS moved or passage of CSHB 75(JUD) with individual recommendations. VICE CHAIR JAMES called for a roll call vote, as follows: Rep. Davidson yes Rep. Green yes Rep. Kott yes Rep. Nordlund yes Rep. Phillips yes Rep. James yes VICE CHAIR JAMES declared CSHB 75(JUD) was moved from committee with individual recommendations. She then brought HB 315 to the table.
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