Legislature(1993 - 1994)

02/10/1994 05:00 PM MLV

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  Number 106                                                                   
                                                                               
  HB 364 - PFD PROGRAM/ALLOWABLE ABSENCES                                      
                                                                               
  REPRESENTATIVE MULDER welcomed Representative Jim Nordlund,                  
  Prime Sponsor of HB 364, to the committee and asked him to                   
  present the bill.                                                            
                                                                               
  Number 108                                                                   
                                                                               
  REPRESENTATIVE NORDLUND stated that HB 364 adds service in                   
  the Public Health Service (PHS) and in the U.S. Merchant                     
  Marine to the list of allowable absences for eligibility for                 
  permanent fund dividends.  He stated that he sponsored this                  
  bill at the request of constituents, one of which is a                       
  Merchant Mariner and one who is a member of the Public                       
  Health Service, because he believes that these people are                    
  entitled to the exemptions.  Representative Nordlund stated                  
  that members of the Public Health Service are commissioned                   
  officers, much like military personnel, and are required to                  
  leave the state on assignment against their will for duty                    
  assignments.  He said, due to the nature of their job,                       
  Merchant Mariners cannot be physically located in the state                  
  because their job requires them to be on their ship.  He                     
  said that his intention is to ensure that these people who                   
  are domiciled in the state are still considered eligible                     
  when they are required to be at sea for more that six                        
  months.                                                                      
                                                                               
  REPRESENTATIVE NORDLUND also added that there was a recent                   
  Superior Court decision that stated that PHS commissioned                    
  officers should be eligible for statutory allowable absences                 
  under the permanent fund dividend program.                                   
                                                                               
  REPRESENTATIVE NORDLUND stated that even if this bill does                   
  not pass, he thought the court would order the payment of                    
  these PHS officers.  Representative Nordlund then said that                  
  he would be happy to answer any questions.                                   
                                                                               
  REPRESENTATIVE NAVARRE asked what the position of the                        
  Department of Revenue was.                                                   
                                                                               
  REPRESENTATIVE MULDER replied that Tom Williams from the                     
  Permanent Fund Dividend Division would present the                           
  department's position.                                                       
                                                                               
  REPRESENTATIVE MULDER stated that he saw that there would be                 
  532 members of the PHS who would be affected and asked how                   
  many Merchant Mariners would be affected.                                    
                                                                               
  REPRESENTATIVE NAVARRE answered that there were                              
  approximately 191.                                                           
                                                                               
  REPRESENTATIVE NORDLUND said that number is hard to                          
  determine and the Department of Revenue would probably have                  
  a problem with this and stated further that when you count                   
  the number that apply and meet the requirements for the                      
  dividend program the number would not be that high.  He said                 
  that there were 14,000 Merchant Mariners nationwide.                         
                                                                               
  Number 146                                                                   
                                                                               
  REPRESENTATIVE MULDER asked if there was an active component                 
  of Merchant Mariners in Alaska.                                              
                                                                               
  REPRESENTATIVE NORDLUND answered that there is no chapter of                 
  Merchant Mariners in the state and that he thought it was a                  
  national service that did not isolate by state.                              
                                                                               
  REPRESENTATIVE MULDER asked if the likely scenario would be                  
  the following:  an Alaskan joins the Merchant Marine and                     
  ends up traveling around the world and not like military,                    
  who sometimes are assigned here, then become residents and                   
  are eligible for the dividend program.                                       
                                                                               
  REPRESENTATIVE NORDLUND replied that this is the intent, but                 
  probably there is nothing to prohibit someone who is in the                  
  Merchant Marine from moving to Alaska and then becoming                      
  eligible for the dividend program, much like the military.                   
                                                                               
  Number 155                                                                   
                                                                               
  REPRESENTATIVE NORDLUND stated that he had an amendment that                 
  he would be willing to offer that may have some                              
  constitutional questions.  He said that it is not his intent                 
  to allow someone who just maintains a mailbox address in                     
  Alaska and is actually domiciled in San Francisco from                       
  benefitting from the program. Representative Nordlund said                   
  that his intent is to provide eligibility for people who are                 
  domiciled in the state except when they are at sea and that                  
  he would be open to any way to clarify that.                                 
                                                                               
  REPRESENTATIVE MULDER stated that it is very difficult to                    
  stipulate what you have to have to establish residency in                    
  Alaska.  Representative Mulder stated that it was a policy                   
  question of whether Merchant Mariners should be considered                   
  in the same manner as any other branch of military service.                  
                                                                               
  Number 169                                                                   
                                                                               
  TOM WILLIAMS, DIRECTOR OF THE PERMANENT FUND DIVIDEND                        
  DIVISION, DEPARTMENT OF REVENUE, stated that the Department                  
  of Revenue does not support any expansion of allowable                       
  absences.  He stated that there is a challenged court                        
  decision by Judge Dana Fabe that did not conclude that PHS                   
  were military, because they are not classified as such by                    
  federal law, but PHS does have a lot of similarities to the                  
  uniformed military services.  He said that he did not                        
  believe that they are transferred out against their will,                    
  but there is the opportunity to transfer and there have been                 
  agreements by PHS officers where they are guaranteed to come                 
  back to Alaska.  Mr. Williams stated that the court decision                 
  stated that PHS officers should be treated similar to the                    
  military and be allowed to remain eligible when they are                     
  absent because of their similarities to the military.  The                   
  court has remanded the specific cases in the suit back to                    
  the department to make other determinations.                                 
                                                                               
  MR. WILLIAMS said that the department originally determined                  
  that they were not eligible because their absence was not                    
  allowable in statute.  Now, they are remanded back to                        
  determine eligibility based on all factors, after which they                 
  will go back to the court.  Mr. Williams stated that the                     
  department has spoken with the Attorney General's Office                     
  about the appeal of this case once it is finalized.  He said                 
  that the PHS includes mostly physicians and some engineers                   
  that do serve often side-by-side with military personnel,                    
  but not in all cases.                                                        
                                                                               
  With respect to Merchant Mariners, MR. WILLIAMS said that                    
  his investigation has shown that there is no Merchant Marine                 
  corps like the Coast Guard or the Navy.  He said that                        
  nongovernment owned commercial vessels make up the Merchant                  
  Marine of the United States and that the Coast Guard issues                  
  cards to qualified Merchant Mariners.  Mr. Williams stated                   
  that anyone who was issued a Merchant Marine card and was                    
  serving at sea under the auspices of that card would qualify                 
  for an allowable absence.  He said that it is really not                     
  affiliated with the military and is a commercial service and                 
  raises the question of what basic private employment jobs                    
  should be considered an allowable absence.                                   
                                                                               
  MR. WILLIAMS said that the department proposed some                          
  regulations related to working out-of-state.  Under the                      
  current regulations, if you accept a job out-of-state and it                 
  is not for one of the fully allowable absences, you do not                   
  retain eligibility for the permanent fund program.                           
                                                                               
  MR. WILLIAMS explained that the department had proposed                      
  regulations concerning accepting part-time employment                        
  out-of-state that stipulated an individual could remain                      
  eligible if they maintained a physical home here at all                      
  times. He said that these regulations were designed to take                  
  care of construction workers or those who had to leave the                   
  state during a slow period and most often left their family                  
  here.  Upon advice of the Department of Law, these                           
  regulations would be constitutionally questionable because                   
  it faces an economic test, namely, someone may not be able                   
  to financially maintain a home here.  Consequently, these                    
  regulations were not adopted under the advice of the                         
  Attorney General.                                                            
                                                                               
  MR. WILLIAMS said that administering the program to PHS                      
  officers would not be a problem, because they do have leave                  
  and earnings statements from which they would be able to                     
  determine eligibility.  He said that there would be some                     
  problems or questions that would have to be answered for                     
  determining eligibility for service in the Merchant Marine.                  
  Mr. Williams said that when you look at any allowable                        
  absence, you also look at the "piggyback provision" of the                   
  spouse and children.                                                         
                                                                               
  Number 233                                                                   
                                                                               
  REPRESENTATIVE KOTT asked Mr. Williams if the department                     
  would be neutral or possibly supportive of the inclusion of                  
  the PHS officers, but not so amenable to the Merchant                        
  Marine.  He also asked that if the court decision prevailed,                 
  would the commissioner incorporate this into regulation.                     
                                                                               
  MR. WILLIAMS replied that the department does not support                    
  opening the program to the PHS as opposed to the Merchant                    
  Marine.  He said that the department does not support adding                 
  any additional allowable absences.  Mr. Williams said if the                 
  Supreme Court ruled that Judge Fabe was correct in his                       
  ruling, then the commissioner would go in and add this to                    
  PFD regulations.  He added that he does not believe that                     
  will occur.                                                                  
                                                                               
  Number 250                                                                   
                                                                               
  REPRESENTATIVE KOTT asked if the department knew how many                    
  Merchant Mariners would be included under this provision.                    
                                                                               
  MR. WILLIAMS answered that he had no way to estimate this,                   
  but that they had some cases from Ketchikan in the past.                     
                                                                               
  Number 257                                                                   
                                                                               
  REPRESENTATIVE NAVARRE asked if the general philosophy of                    
  the department was against any opening of the allowable                      
  absence provisions and further asked if the department would                 
  prefer to have it closed to the military.                                    
                                                                               
  MR. WILLIAMS asked for clarification.                                        
                                                                               
  REPRESENTATIVE NAVARRE asked if it was correct that the                      
  department did not want any expansion of the current                         
  allowable absences.                                                          
                                                                               
  MR. WILLIAMS said the department is not supportive of any                    
  expansion, and with respect to PHS, the department does not                  
  see any particularly unique argument that would convince                     
  them to open it up.  He said that members of the PHS have                    
  repeatedly asked the commissioner to adopt a regulation and                  
  the department concluded that there were not enough                          
  similarities to the military that would suggest that it was                  
  warranted.                                                                   
                                                                               
  Number 272                                                                   
                                                                               
  REPRESENTATIVE MULDER stated that during testimony on a                      
  similar bill, the Representative from Kodiak made a                          
  suggestion that perhaps the statutes should be amended to                    
  say that anyone who is gone from the state for longer than                   
  150 consecutive days is not eligible, and the department                     
  liked this idea.                                                             
                                                                               
  REPRESENTATIVE MULDER said that he understood that this                      
  would make it easier for the department.                                     
                                                                               
  MR. WILLIAMS agreed that it would make the program easier                    
  and more equitable to administer.                                            
                                                                               
  Number 278                                                                   
                                                                               
  REPRESENTATIVE NORDLUND stated that he thought that it was                   
  appropriate for the department to speak of how a program may                 
  be easier to administer, but it is up to the legislature to                  
  decide who in eligible for the dividend program.  He stated                  
  that for whatever the reason, it is up to the legislature to                 
  decide this and it has to be based on the merits.                            
                                                                               
  REPRESENTATIVE NORDLUND referenced a statement made by Mr.                   
  Williams that he was not sure if PHS officers did not have                   
  to leave the state against their will.  He said that the                     
  court stated in its decision that PHS officers, like members                 
  of the armed services, serve at the pleasure of their                        
  superior officers and do not have control over where they                    
  are commissioned.                                                            
                                                                               
  REPRESENTATIVE NORDLUND stated that the question of whether                  
  the legislature should allow anybody who is employed outside                 
  of the state to be eligible for the dividend is a valid                      
  concern, but when your job in on a ship in the middle of the                 
  sea where you couldn't possibly be residing in another                       
  state. He said that if in fact these people are residents                    
  and they just happen to be out at sea for more than six                      
  months a year, they should receive the permanent fund out of                 
  fairness.                                                                    
                                                                               
  Number 302                                                                   
                                                                               
  REPRESENTATIVE KOTT stated that out of fairness, every                       
  Alaskan citizen who has an occupation that takes them                        
  out-of-state, whether they be a Merchant Mariner or an                       
  employee of ARCO or BP, should then be included, otherwise                   
  it is discriminating one class of occupations against                        
  another.  Representative Kott said that this was discussed                   
  in the Judiciary Committee and that there are constitutional                 
  questions when you start separating classes.  He stated that                 
  when you are a Merchant Mariner, or ARCO employee, quite                     
  often there is no choice of where you are assigned.                          
                                                                               
  REPRESENTATIVE KOTT proposed an amendment to include all                     
  occupations.                                                                 
                                                                               
  REPRESENTATIVE NAVARRE objected.                                             
                                                                               
  REPRESENTATIVE MULDER asked for a roll call on the amendment                 
                                                                               
  Amendment to HB 364                                                          
                                                                               
  Add to AS 43.23.095 (8)                                                      
       "(J) out-of-state employment."                                          
                                                                               
  ROLL CALL:                                                                   
                                                                               
       Representative Mulder:  No                                              
       Representative Navarre: No                                              
       Representative Kott:    No                                              
                                                                               
  YEAS: 0   NAYS: 3   ABSENT: 2                                                
                                                                               
  The Amendment failed.                                                        
                                                                               
  Number 320                                                                   
                                                                               
  REPRESENTATIVE MULDER asked if there were any further                        
  amendments.                                                                  
                                                                               
  REPRESENTATIVE KOTT stated that he had an amendment that he                  
  would hold at that time                                                      
                                                                               
  Number 323                                                                   
                                                                               
  REPRESENTATIVE NAVARRE moved HB 364 from committee with                      
  individual recommendations and accompanying fiscal note.                     
                                                                               
  Number 325                                                                   
                                                                               
  REPRESENTATIVE MULDER asked if there was any objection.                      
  There being none and HB 364 was moved from committee.                        

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