Legislature(2011 - 2012)CAPITOL 106
04/12/2011 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB93 | |
| HB216 | |
| HB182 | |
| HB190 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 93 | TELECONFERENCED | |
| += | HB 182 | TELECONFERENCED | |
| *+ | HB 216 | TELECONFERENCED | |
| += | HB 190 | TELECONFERENCED | |
| *+ | HB 77 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 190-PFD ALLOWABLE ABSENCE: MILITARY
9:19:39 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."
9:20:11 AM
The committee took an at-ease from 9:20 a.m. to 9:22 a.m.
9:23:24 AM
REPRESENTATIVE ERIC FEIGE, Alaska State Legislature, presented
HB 190 as sponsor.
9:23:46 AM
The committee took a brief at-ease.
9:24:29 AM
REPRESENTATIVE GRUENBERG removed his objection, which was left
pending on 3/3/11, to the motion to adopt the proposed committee
substitute (CS) for HB 190, Version 27-LS0564\D, Kirsch,
3/28/11, as a work draft. There being no further objection,
Version D before the committee.
9:25:03 AM
REPRESENTATIVE FEIGE said the main change incorporated into
Version D is in language on page 2, lines 1-5. He said that
language accounts for individuals who began receiving the
permanent fund dividend (PFD) as dependents, left the state as
dependents of active duty military members, and later joined the
military. In the original bill version, the people in that
category would have been eligible for the PFD, even though they
had not really satisfied the intent of the bill, which is to
cover those who are Alaska residents when inducted into the
military.
9:26:54 AM
REPRESENTATIVE GRUENBERG moved to adopt Amendment 1, labeled 27-
LS0564\D.1, Kirsch, 4/4/11, which read as follows [original
punctuation provided]:
Page 2, following line 5:
Insert a new bill section to read:
"* Sec. 2. The uncodified law of the State of
Alaska is amended by adding a new section to read:
PERMANENT FUND DIVIDEND APPLICATIONS.
Notwithstanding permanent fund dividend application
procedures or deadlines, an individual who qualifies
for a dividend for 2009, 2010, or 2011 because of the
amendment to AS 43.23.008(c) made in sec. 1 of this
Act, may apply for the dividend by January 1, 2015.
The Department of Revenue shall prepare a form for
applications under this section."
Renumber the following bill section accordingly.
Page 2, following line 11:
Insert a new bill section to read:
"* Sec. 4. The uncodified law of the State of
Alaska is amended by adding a new section to read:
RETROACTIVITY. Section 1 of this Act is
retroactive to January 1, 2009."
REPRESENTATIVE JOHANSEN objected.
REPRESENTATIVE GRUENBERG spoke to Amendment 1. He offered his
understanding that during the last hearing on HB 190, the
committee heard two members of the military testify that they
had not been able to obtain dividends for 2009 and 2010 because
they were "caught in this gap." He asked how many people would
be covered by Amendment 1.
9:28:13 AM
MICHAEL PASCHALL, Staff, Representative Eric Feige, Alaska State
Legislature, on behalf of Representative Feige, estimated that
less than 100 people would be affected by Amendment 1.
REPRESENTATIVE GRUENBERG asked the bill sponsor if [Amendment 1]
would adequately address the issue.
REPRESENTATIVE FEIGE answered yes.
9:29:13 AM
REPRESENTATIVE JOHANSEN removed his objection. There being no
further objection, Amendment 1 was adopted.
9:29:25 AM
REPRESENTATIVE KELLER moved to adopt Amendment 2, labeled 27-
LS0564\D.2, Kirsch, 4/11/11, which read as follows [original
punctuation provided]:
Page 2, following line 5:
Insert a new bill section to read:
"* Sec. 2. AS 43.23.008 is amended by adding a new
subsection to read:
"(e) If insufficient documentation is available
to establish the nature of an absence, as required
under (c)(1) and (2) of this section, the department
may waive the requirement of those paragraphs."
Renumber the following bill section accordingly.
REPRESENTATIVE JOHANSEN objected for the purpose of discussion.
9:29:43 AM
REPRESENTATIVE FEIGE said the language gives flexibility to the
division to waive the requirements proving eligibility in the
three years prior to induction into military service, in
situations where information now required was not at one time
collected by the division.
9:31:12 AM
REPRESENTATIVE P. WILSON asked if, under Amendment 1, the
division would have to pay dividends retroactively to someone
who had collected a dividend for three years, 20 years ago, then
went into the service and "is still there."
REPRESENTATIVE FEIGE answered no.
REPRESENTATIVE P. WILSON questioned when the PFD program began.
REPRESENTATIVE FEIGE answered [1982].
REPRESENTATIVE GRUENBERG pointed to the adopted Amendment 1,
which shows that there would be limited retroactivity to January
1, 2009.
REPRESENTATIVE KELLER asked if the bill sponsor intends to allow
the division to waive the requirements without proof that the
criteria of Section 1(c)(1) and (2) are met.
REPRESENTATIVE FEIGE responded that the intent is not to leave
it wide open, but rather to give reasonable discretion to the
division. In response to Representative Keller, he said he
would have no objection to an amendment specifying that a waiver
would be allowed if the division first determines that the
requirements of Section 1(c)(1) and (2) had been met.
9:35:22 AM
REPRESENTATIVE GRUENBERG said he thinks Representative Keller is
right not to want to allow the division to offer waivers
[without guidelines]. He suggested that if there is
insufficient documentation to establish the nature of absence
under c(1) and (2) of this section, then the Department of
Revenue may want to adopt regulations allowing alternative
proof. He said he would like time to draft the wording of an
amendment to Amendment 2.
9:36:35 AM
REPRESENTATIVE P. WILSON said one possible scenario is that a
person may throw away documentation, thinking that he/she does
not qualify, but the division feels that the person's absence
was because of service in the military and waives the
requirements of c(1) and (2).
9:37:11 AM
REPRESENTATIVE JOHANSEN asked the bill sponsor if he is
confident that the regulatory agency will create the appropriate
regulations.
REPRESENTATIVE FEIGE responded that he thinks it would be
clearer if it was set out in statute. He said the requirements
of (c)(1) and (2) do not address whether a person has received a
PFD check. He suggested one way to determine a person's
eligibility is whether or not that person received a PFD.
9:39:16 AM
REPRESENTATIVE SEATON asked for clarification as to who would
qualify under this waiver.
REPRESENTATIVE FEIGE answered that it would apply to someone who
is an Alaska resident at the time of induction into the military
and serves in the military as a career. Regarding (c)(1) and
(2), he reiterated, "Being able to prove where you were 20 years
ago can be somewhat problematic, and the division does not have
that information because it was not required on permanent fund
applications at that time."
REPRESENTATIVE SEATON expressed concern that there may be a
loophole in which someone may be able to reestablish his/her
residency without coming back to the state and remaining for a
year when he/she had at some point in that process officially
changed his/her residence.
9:42:36 AM
MR. PASCHALL directed attention to language on page 1, lines 5-
8, which read as follows:
(c) An otherwise eligible individual who has
been eligible for the immediately preceding 10
dividends despite being absent from the state for more
than 180 days in each of the related 10 qualifying
years is only eligible for the current year dividend
if the individual was absent 180 days or less during
the qualifying year.
MR. PASCHALL indicated that the intent of the bill is to address
only those individuals who had "limited out on the 10 years."
9:43:35 AM
REPRESENTATIVE KELLER moved to adopt Conceptual Amendment 1 to
Amendment 2, as follows:
On line 5 of Amendment 2:
Delete "waive the"
Insert "adopt regulations to establish methods of
alternative compliance"
REPRESENTATIVE KELLER said he thinks Conceptual Amendment 1 to
Amendment 2 would tighten the language of Amendment 2 and put
the public process "out on the table."
REPRESENTATIVE KELLER, in response to the committee aide,
restated Conceptual Amendment 1 to Amendment 2, as follows:
On line 5 of Amendment 2:
Delete "waive the"
Insert "adopt regulations to establish
alternative compliance determination"
REPRESENTATIVE KELLER reiterated that this is a conceptual
amendment.
REPRESENTATIVE GRUENBERG asked Representative Keller to repeat
the part of the proposed language of Conceptual Amendment 1 to
Amendment 2, following "adopt regulations to establish".
REPRESENTATIVE KELLER filled in: ..."alternative methods of
determination".
REPRESENTATIVE GRUENBERG asked, ..."alternative methods of"...?
REPRESENTATIVE KELLER replied, ..."compliance". He explained
that that means compliance with the requirements in (c)(1) and
(2).
9:45:28 AM
REPRESENTATIVE GRUENBERG suggested an alternative fix that would
read: "adopt regulations to establish the requirement of those
paragraphs."
REPRESENTATIVE KELLER moved to amend Conceptual Amendment 1 to
Amendment 2, so that Amendment 2, as amended, would read as
follows:
Page 2, following line 5:
Insert a new bill section to read:
"* Sec. 2. AS 43.23.008 is amended by adding a new
subsection to read:
"(e) If insufficient documentation is available
to establish the nature of an absence, as required
under (c)(1) and (2) of this section, the department
may adopt regulations to establish the requirement of
those paragraphs."
Renumber the following bill section accordingly.
[The motion to amend Conceptual Amendment 1 to Conceptual
Amendment 2 was treated as adopted.]
CHAIR LYNN asked if there was any objection to [Conceptual
Amendment 1, as amended, to Conceptual Amendment 2]. There
being none, it was so ordered.
REPRESENTATIVE JOHANSEN removed his objection to the motion to
adopt Amendment 2, [as amended]. There being no further
objection, Amendment 2, as amended, was adopted.
9:46:36 AM
REPRESENTATIVE SEATON noted that at the last bill hearing he had
requested an opinion from Legislative Legal and Research
Services regarding "the discrimination between ... a three-year
residency requirement versus a one-year residency requirement."
He explained that this relates to a case that determined it is
illegal to discriminate based on longevity of residency.
9:47:21 AM
MR. PASCHALL responded, "Their synopsis of that is ... [that] it
could be [a legal problem]; ... there's no definitive answer."
REPRESENTATIVE SEATON expressed concern that by including
discriminating between one-year and three-year residencies, the
proposed legislation would be trying to overturn a [1982] U.S.
Supreme Court decision from Zobel v. Williams. He stated:
With the data that we have that shows that residents
that are gone for a long period of time - 10 years -
return in very low numbers, that an extended duration
does not give us a[n] adequate proxy for physical
residency; it puts the permanent fund [corporation]
itself at risk of being declared taxable by the
[Internal Revenue Service] (IRS). And so, I think we
are on very shaky ground as far as the risks that we
are willing to take to say that people can take their
career and 20 years out of the state and still receive
their permanent fund dividend. That extension could
be extremely costly to all the citizens of the state.
9:50:06 AM
MR. PASCHALL noted that there was an attorney present to address
Representative Seaton's concern. He indicated that
Representative Seaton had asked for some statistics, which he
related as follows:
The number ... for 2-5 years of absence is 19; for 6-
10 is 15; for 11-19 is 30; and for 20-plus years is
16; and those were members in the armed forces that
had a 10-year absence.
MR. PASCHALL, in response to questions from Representative
Johansen, confirmed that the legal opinion was received from
Legislative Legal and Research Services in March [2011], and he
apologized that the committee was not in possession of a copy.
In response to a follow-up question, he said the next committee
of referral is the House Finance Committee.
9:51:17 AM
REPRESENTATIVE JOHANSEN said he would like to help out the
people in the military, but not at the expense of challenging an
Alaska Supreme Court case decision and putting the Permanent
Fund Division at risk.
9:52:12 AM
DAN BRANCH, Senior Assistant Attorney General, Commercial/Fair
Business Section, Civil Division (Juneau), Department of Law,
said he thinks the committee already grasps that a
classification is made in order to create an exception to a rule
for a particular group of people. The government that does this
creates a question regarding whether constitutional rights will
be violated. He said one question related to this issue is
whether the rights of people who won't benefit from this
proposed Section would be violated. He mentioned the
constitutional rights of people to travel and the privileges and
immunities clause.
MR. BRANCH said all those rights were discussed by the U.S.
Supreme Court during the Zobel v. Williams case, which struck
down the first bill related to the PFD. That bill, he said,
awarded length of residency by increasing the amount of a
dividend by the number of years a person was a resident prior to
application. He said the situation at hand is similar to the
issue in the Zobel v. Williams case, in that the proposed
legislation would essentially award some people who have left
the state for their prior residency in the state, which he said
raises "a really big red flag."
MR. BRANCH said the Department of Law does not like to give
cause for anyone to challenge statute, because it has to then
defend it; however, he said the proposed legislation does raise
concern as to "whether this can withstand constitutionality."
He said one way to consider the constitutionality of proposed
legislation is to think about how hard it would be to defend;
the proposed legislation would be very difficult to defend
"because of the - Zobel connection." He said he has not seen
the analysis by Legislative Legal and Research Services, but
said Legislative Legal and Research Services is careful in terms
of pronouncing legislation constitutional or unconstitutional.
9:56:11 AM
REPRESENTATIVE JOHANSEN urged Mr. Branch to look at the legal
opinion of Legislative Legal and Research Services and give
feedback on it.
9:56:52 AM
CHAIR LYNN remarked that significant issues had been raised, and
spoke of returning to the issue in January 2012.
9:57:40 AM
MR. BRANCH, in response to a request, stated, "There is a
provision in the bill - Section 2 - that would ... allow the
court to sever any [provision] in the bill that would be found
unconstitutional and save what the balance of it would be." In
response to Chair Lynn, he confirmed that a person from the
department who is knowledgeable on this subject would be
available to come before the committee in January.
9:58:31 AM
REPRESENTATIVE GRUENBERG said the three-year/three dividend plan
is an attempt to solve the dilemma of proving that a person in
the military who has been absent from the state for a long time
is indeed a resident of Alaska. The bill attempts to solve this
issue by making the determination based on the length of
residency before the military person left the state. He asked
if that would more likely survive constitutional challenge if
there were legislative finding addressing this unusual problem
and solution. He then asked whether there would be any other
constitutionally permissible way to establish bona fide
residency. He surmised that it is not so much the three
dividends that are of concern, but rather the establishing of
ties to the state.
REPRESENTATIVE FEIGE confirmed that is correct.
10:00:30 AM
MR. BRANCH responded that although findings are always helpful,
the court always looks at the language itself to determine
whether there is a constitutional problem. He offered his
understanding that the bill sponsor is trying to come up with a
way to allow certain people to continue to receive a permanent
fund on the understanding that they are continuing to be and
wish to be considered residents of Alaska.
REPRESENTATIVE GRUENBERG suggested there could be some way to
have these people swear, under penalty of perjury, that they
would come back to Alaska.
MR. BRANCH said that already may be a part of the application
process, but said he thinks some objective standards would be
helpful.
[HB 190 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| 01 HB0216A.pdf |
HJUD 1/30/2012 1:00:00 PM HSTA 4/12/2011 8:00:00 AM |
HB 216 |
| 02 Sponsor_HB216_Regulations.pdf |
HJUD 1/30/2012 1:00:00 PM HSTA 4/12/2011 8:00:00 AM |
HB 216 |
| --11 HB 182 - CS version I 4-11-11.pdf |
HSTA 4/12/2011 8:00:00 AM |
HB 182 |
| --12 HB 182 - CS change explanation version I.pdf |
HSTA 4/12/2011 8:00:00 AM |
HB 182 |
| 01 HB 77 (Version D).pdf |
HSTA 4/12/2011 8:00:00 AM |
HB 77 |
| 02 HB 77 Sponsor Statement.pdf |
HSTA 4/12/2011 8:00:00 AM |
HB 77 |
| 03 HB 77 Sectional.pdf |
HSTA 4/12/2011 8:00:00 AM |
HB 77 |