Legislature(2009 - 2010)CAPITOL 106

04/14/2009 08:00 AM House STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 225(STA) Out of Committee
Moved CSHB 205(STA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HB 205-PERMANENT FUND DIVIDEND FOR DECEASED                                                                                   
9:47:47 AM                                                                                                                    
VICE CHAIR SEATON  announced that the last order  of business was                                                               
HOUSE  BILL NO.  205,  "An  Act relating  to  the permanent  fund                                                               
dividend  of an  otherwise qualified  individual who  dies during                                                               
the qualifying year; and providing for an effective date."                                                                      
REPRESENTATIVE GRUENBERG  moved to  adopt the  proposed committee                                                               
substitute (CS)  for HB 205, Version  26-LS0780\R, Cook, 4/11/09,                                                               
as a work draft.                                                                                                                
VICE CHAIR SEATON objected for discussion purposes.                                                                             
9:49:13 AM                                                                                                                    
PAUL GRASSI,  Staff, Representative Harry Crawford,  Alaska State                                                               
Legislature, on behalf of  Representative Crawford, prime sponsor                                                               
of HB 205, described the changes  proposed in Version R.  He said                                                               
the first change  was language added stipulating  that the person                                                               
who  dies during  the qualifying  year  would also  have to  have                                                               
qualified for a  dividend for the year  immediately preceding the                                                               
qualifying year.   The second  change stipulates that  the person                                                               
must have been  a resident of Alaska for at  least 180 days prior                                                               
to his/her death.  Mr. Grossi continued as follows:                                                                             
         The third change is a requirement that they be                                                                         
      physically present in the state or ... exempted from                                                                      
     the requirement under [AS] 43.23, I believe it's 008.                                                                      
9:50:36 AM                                                                                                                    
REPRESENTATIVE WILSON directed attention  to the language on page                                                               
2,  line 4,  which  read, "Notwithstanding  AS  43.23.011".   She                                                               
asked whether  that statute allows  an Alaska resident  a medical                                                               
VICE  CHAIR SEATON  requested the  committee focus  on the  three                                                               
changes that would be made through Version R.                                                                                   
9:52:46 AM                                                                                                                    
REPRESENTATIVE GRUENBERG noted that in  a letter [included in the                                                               
committee packet],  Mr. Grossi  writes that on  page 1,  line 14,                                                               
"and  (a)(5)"  was  inserted;  however,   Version  R  shows  "and                                                       
MR. GROSSI  said the  notation in his  letter is  a typographical                                                               
error and the correct notation is "and (a)(6)".                                                                             
9:53:31 AM                                                                                                                    
MR. GROSSI  reviewed the intent of  Version R.  He  said the idea                                                               
for the bill was brought to  the attention of the bill sponsor by                                                               
two widows whose  husbands died in November and  did not qualify.                                                               
He  said it  turns  out  there are  others  who have  experienced                                                               
similar  situations,  and Senator  Meyers  is  presenting a  bill                                                               
which mirrors HB 205.                                                                                                           
9:54:42 AM                                                                                                                    
REPRESENTATIVE  PETERSEN,  regarding  the  180  days,  asked  Mr.                                                               
Grossi to confirm that a person  who dies just after the 180 days                                                               
- "if  they make it  until the end of  June" - would  qualify for                                                               
the dividend.                                                                                                                   
MR. GROSSI responded, "I believe that is correct."                                                                              
9:55:25 AM                                                                                                                    
VICE CHAIR  SEATON noted that the  person would not have  to have                                                               
been in the state for 180  days, because the language states that                                                               
he/she must maintain  residency - it does not say  he/she must be                                                               
physically located in the state.                                                                                                
MR. GROSSI responded as follows:                                                                                                
     No,  ... section  3  does require  [the  person to  be]                                                                    
     physically  ... present  in  the state.    So, ...  I'm                                                                    
     sorry, that  third change  in the  ... CS  does require                                                                    
        them to be physically [present] unless otherwise                                                                        
MR.  GROSSI,  in  response  to Vice  Chair  Seaton,  offered  his                                                               
understanding that that is shown in  the language on page 2, line                                                               
9:56:21 AM                                                                                                                    
REPRESENTATIVE  PETERSEN   stated  his  belief  that   it  is  an                                                               
allowable absence  for an Alaska resident  to be in the  Lower 48                                                               
to receive medical care.                                                                                                        
MR. GROSSI confirmed that is correct.                                                                                           
9:56:51 AM                                                                                                                    
VICE  CHAIR SEATON  noted that  the bill  merely states  that the                                                               
person has  to have  been a  resident for at  least 180  days; it                                                               
does not  say the person  had to be  present in the  state during                                                               
that time.                                                                                                                      
MR.  GRASSI offered  his understanding  that  any exception  that                                                               
previously exists would be an exception under HB 205.                                                                           
9:59:55 AM                                                                                                                    
REPRESENTATIVE  PETERSEN  said  he   thinks  the  intent  of  the                                                               
proposed bill is to qualify  the deceased person who had remained                                                               
a qualified  resident, with or  without exemptions, for  at least                                                               
180 days before his/her death.                                                                                                  
MR. GROSSI said he believes that is correct.                                                                                    
VICE  CHAIR SEATON  interpreted  that under  HB  205, the  person                                                               
would not have to have been  "physically present in the state any                                                               
of the time" before his/her  death for that entire year, "because                                                               
that's an allowable absence."                                                                                                   
10:02:08 AM                                                                                                                   
CHRIS   POAG,  Assistant   Attorney   General,  Civil   Division,                                                               
Commercial  & Fair  Business Section,  Department  of Law  (DOL),                                                               
clarified the issue as follows:                                                                                                 
     Eligibility requirements are found in [AS 43.23.005],                                                                      
     and ... there's a variety of eligibility requirements.                                                                     
     And this is  s test to determine whether  or not you're                                                                    
     a  bonafide  Alaskan  resident   for  purposes  of  the                                                                    
     dividend.    We're  creating them  because  a  deceased                                                                    
     person  couldn't  apply  to the  department  ...,  they                                                                    
     couldn't   be  a   state  resident   on  the   date  of                                                                    
     application,   and   because  the   allowable   absence                                                                    
     provisions say  you have  to be  absent with  intent to                                                                    
     remain,   we've    created   exemptions    from   those                                                                    
     requirements,  and what  exists is  a requirement  that                                                                    
     you be a state resident  - as state resident is defined                                                                    
     in  the statutes  and the  regulations -  for 180  days                                                                    
     prior to your  death.  So, ...  state residence doesn't                                                                    
     itself require  physical presence; it says  you have to                                                                    
     be here with an intent to  remain or, if you leave, you                                                                    
     have to  be absent with the  intent to return.   And we                                                                    
     do have  a regulation that  further defines what  it is                                                                    
     to  be a  state  resident and  to  maintain your  state                                                                    
     So, you're  correct, Representative Seaton:   in theory                                                                    
     a person could  be gone for that 180  days, die outside                                                                    
     of  Alaska, and  still qualify  under this  bill.   And                                                                    
     certainly, whatever  the will  of the committee  is, we                                                                    
     can  draft it  so that's  not an  intended consequence,                                                                    
     but as  I read this  provision, that's how it  could be                                                                    
REPRESENTATIVE WILSON said she thinks  that is okay, because that                                                               
is  not different  than  the exemptions  allow  currently.   Many                                                               
times the reason  a resident is Outside is because  he/she is ill                                                               
and is getting treatment unavailable in Alaska.                                                                                 
10:04:32 AM                                                                                                                   
MR.  POAG, in  response  to  Representative Gruenberg,  confirmed                                                               
that [HB  205] stipulates that  the otherwise  qualified resident                                                               
would  have to  have lived  for  at least  180 days  of the  year                                                               
before dying in order to qualify for that year's dividend.                                                                      
REPRESENTATIVE GRUENBERG said he tends to support that.                                                                         
10:05:12 AM                                                                                                                   
MR.  POAG,   in  response  to  a   question  from  Representative                                                               
Petersen, said a death certificate  is proof positive of the date                                                               
of death.                                                                                                                       
VICE  CHAIR  SEATON  remarked  that he  thinks  the  wording  [in                                                               
Version R] has  changed significantly from the  purported need of                                                               
the bill.                                                                                                                       
REPRESENTATIVE  GRUENBERG  said  someone  could be  on  a  cruise                                                               
beginning January  1, for five  months, and could be  planning to                                                               
return to Alaska, but  dies on the cruise.  He  said he thinks HB
205 is humane and is "intended to cover those people, too."                                                                     
10:08:32 AM                                                                                                                   
MR. POAG  stated that there  are fairly rigorous  requirements in                                                               
regulation related to maintaining  residency, which the Permanent                                                               
Fund Dividend Division  takes seriously.  If any  steps are taken                                                               
that "severs  the residency," the  person would not  be eligible.                                                               
He said  there is also  statute which  includes what is  known as                                                               
"the touch-down  requirement," which requires the  person to have                                                               
spent at least  72 hours in the  state in the last two  years.  A                                                               
physical presence  requirement is  currently not  in HB  205, but                                                               
could be  added by  the committee;  however, there  currently are                                                               
provisions  in existence  to require  the individual  to maintain                                                               
his/her state residency.                                                                                                        
10:09:21 AM                                                                                                                   
VICE CHAIR  SEATON asked  what it  takes for  a person  to remove                                                               
his/her state residency.                                                                                                        
MR. POAG  replied that the answer  to that is found  in 15 A.C.C.                                                               
23  143, which  has  a  general provision  as  to guidelines  for                                                               
maintaining residency.   Some reasons  for losing  that residency                                                               
include:   claiming  a nonresident  motor vehicle  tax exemption;                                                               
accepting  full-time employment  in another  state; filing  for a                                                               
part-year  resident income  for property  tax returns  in another                                                               
state;  naming a  claim of  homestead property  tax exemption  in                                                               
another  state;  receiving  an   education  from  another  state;                                                               
disclosure  in a  court proceeding  an affidavit  indicating that                                                               
the person is  resident in [another] state; and  executing a will                                                               
of residency in another state.                                                                                                  
VICE  CHAIR SEATON  concluded  that basically,  a  person has  to                                                               
declare that he/she has permanently  changed residency.  He asked                                                               
how many  people would have  qualified under this  provision this                                                               
last year.                                                                                                                      
10:11:17 AM                                                                                                                   
MR.  POAG   offered  his  understanding  that   the  fiscal  note                                                               
discloses  the  annual number  of  deaths  during the  qualifying                                                               
year,  and  projects a  number  of  anticipated participants  who                                                               
would  qualify, which  he  said he  thinks is  "in  the realm  of                                                               
VICE  CHAIR SEATON  confirmed  that the  fiscal  note shows  that                                                               
approximately 1,700 people would qualify per year.                                                                              
10:12:07 AM                                                                                                                   
REPRESENTATIVE  GRUENBERG asked  if  Version R  conforms to  "the                                                               
bill that is hopefully going to be on the floor today."                                                                         
CHRISTINE  MARASIGAN, Staff,  Representative Kevin  Meyer, Alaska                                                               
State Legislature, confirmed that is correct.                                                                                   
VICE CHAIR SEATON,  after ascertaining that there was  no one who                                                               
wished to testify, closed public testimony.                                                                                     
10:13:22 AM                                                                                                                   
VICE CHAIR  SEATON removed his  objection to the motion  to adopt                                                               
the proposed  committee substitute (CS)  for HB 205,  Version 26-                                                               
LS0780\R,  Cook,  4/11/09, as  a  work  draft.   There  being  no                                                               
further objection, Version R was before the committee.                                                                          
10:13:44 AM                                                                                                                   
VICE CHAIR SEATON  stated that he has a problem  with [Version R]                                                               
because  it  would  "tremendously"   expand  the  bill  from  its                                                               
original intent.  He reiterated his previous points.                                                                            
REPRESENTATIVE WILSON  said she feels that  qualifications should                                                               
be the same whether  a person is alive or has  died, and she said                                                               
she likes the bill.                                                                                                             
10:15:41 AM                                                                                                                   
VICE CHAIR  SEATON clarified  that the problem  with the  bill is                                                               
that "you  don't know whether  these people would  have qualified                                                               
or not,  ... because  they could  have been gone  for 185  days -                                                               
they only had to be here for  180 days - that doesn't qualify you                                                               
for a permanent fund dividend."                                                                                                 
REPRESENTATIVE  WILSON  pointed  out  that  that  is  a  five-day                                                               
VICE CHAIR SEATON continued:                                                                                                    
     That is  if you were  just starting from  the beginning                                                                    
     of the year.  I mean,  you could have been here a month                                                                    
     and have left  ... - or two months and  left - and then                                                                    
     ... four ... or six  months later not having been here.                                                                    
     But  you still  maintained that  residency because  you                                                                    
     didn't declare a  residency in another state.   So, you                                                                    
     could  have left  in February  and  never returned  and                                                                    
     died  ... six  months later,  and that  still qualifies                                                                    
     for a permanent fund dividend.                                                                                             
10:17:20 AM                                                                                                                   
MR. GROSSI said  he thinks that one indicator  that residency had                                                               
been  established  would be  whether  or  not the  individual  in                                                               
question had received a dividend  in "the year immediately before                                                               
the qualifying year."                                                                                                           
REPRESENTATIVE GRUENBERG commented that  when dealing with people                                                               
who die, the people who are helped are their widows and orphans.                                                                
10:18:23 AM                                                                                                                   
REPRESENTATIVE  WILSON moved  to  report  the proposed  committee                                                               
substitute (CS)  for HB 205, Version  26-LS0780\R, Cook, 4/11/09,                                                               
out  of  committee,  with   individual  recommendations  and  the                                                               
accompanying  fiscal  notes.   There  being  no  objection,  CSHB
205(STA)  was  reported from  the  House  State Affairs  Standing                                                               

Document Name Date/Time Subjects
01 HB0225A.pdf HFIN 3/11/2010 9:00:00 AM
HSTA 4/14/2009 8:00:00 AM
HB 225
01 HB 205.pdf HSTA 4/14/2009 8:00:00 AM
HB 205
02 HB 225 Sponsor Statement.doc HFIN 2/8/2010 1:30:00 PM
HFIN 3/11/2010 9:00:00 AM
HSTA 4/14/2009 8:00:00 AM
HB 225
03 HB 225 Sectional Analysis.doc HFIN 2/8/2010 1:30:00 PM
HSTA 4/14/2009 8:00:00 AM
HB 225
04 HB225-DOA-DGS-04-10-09.pdf HSTA 4/14/2009 8:00:00 AM
HB 225
02 HB 205 Sponsor Statement.PDF HSTA 4/14/2009 8:00:00 AM
HB 205
03 Sectional HB 205.PDF HSTA 4/14/2009 8:00:00 AM
HB 205
04 Support.PDF HSTA 4/14/2009 8:00:00 AM
05 empire art.pdf HSTA 4/14/2009 8:00:00 AM
06 letter from l mason.pdf HSTA 4/14/2009 8:00:00 AM
07 letter from k neher.pdf HSTA 4/14/2009 8:00:00 AM
05 HB225-DOC-OC-04-13-09.pdf HFIN 3/11/2010 9:00:00 AM
HSTA 4/14/2009 8:00:00 AM
HB 225
08 email from m smith.pdf HSTA 4/14/2009 8:00:00 AM
09 email from m kajikawa.pdf HSTA 4/14/2009 8:00:00 AM
10 4-11-09 Draft CS for HB 205 Version R.pdf HSTA 4/14/2009 8:00:00 AM
HB 205
11 HB205-DOR-PFD-04-13-09.pdf HSTA 4/14/2009 8:00:00 AM
HB 205