Legislature(1995 - 1996)
03/21/1995 03:35 PM Senate STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SSTA - 3/21/95
HB 4 PERMANENT FUND DIVIDEND ELIGIBILITY
CHAIRMAN SHARP brings up HB 4 as the next order of business before
the Senate State Affairs Committee and calls the first witness.
Number 441
ROD MOURANT, Aide to Representative Pete Kott, prime sponsor of HB
4, gives background information on HB 4. Mr. Mourant mentions the
court case which disallowed "piggybacking", and states HB 4 would
make piggybacking a statutorily allowable absence. Mr. Mourant
states allowable absences are for medical reasons, educational
reasons, military service, vocational, professional, and special
training not available in state, and for service in congress or the
peace corps. He knows one woman who is being denied a dividend
while she accompanies and cares for her husband who is undergoing
cancer treatment out of state. Mr. Mourant also knows a fourth-
generation Alaskan who has been denied a dividend while he
accompanies his wife, who is out of state attending school. He
informed the committee that HB 4 passed the house unanimously.
Number 486
SENATOR LEMAN asks Mr. Mourant if this bill is the same as
Representative Parnell's bill last year.
REPRESENTATIVE PETE KOTT, prime sponsor of HB 4, responds HB 4 is
virtually identical. He stated the bill passed both houses last
year, but the house was unable to concur with an amendment made in
the senate, and so the bill died.
Number 492
CHAIRMAN SHARP comments he is caused heartburn by military people
who satisfy the residency requirement and become eligible for a
dividend, and then come back for one day on a military transport
plane just to satisfy the dividend requirement after they are
transferred out of state. He has a problem with people who weren't
eligible for a dividend when they went in the military continuing
eligibility after they leave the state. Chairman Sharp knows the
Soldiers & Sailors Relief Act requires that anyone in the military
cannot lose a benefit because of military service. But he is not
sure, if it is a benefit they did not have when they joined the
service, that the benefit would necessarily have to follow them
forever.
Number 510
REPRESENTATIVE KOTT states he completely agrees with the chairman's
comments; there are a number of abuses with the permanent fund
dividend program. He spent twenty-two years in the military, and
certainly insured that he stayed in the state. But there are a
number of other individuals out there who are probably cheating the
system, not to cast any negative aspersions on anyone. In
addition, there are probably a lot of other individuals who come to
the state and collect dividends while here, but do not intend to
stay indefinitely. Representative Kott informs the committee that
last year there was an attempt to establish a program within the
Department of Revenue. This program would have set up an escrow
account for people eligible for dividends who were residing out of
state, and after these people had returned to the state and
maintained residency for one year, they would have received the
money owed them. That became a little unmanageable though; there
were a couple of snags. But that is one way to address that
particular issue.
Number 535
SENATOR DONLEY asks what is new in Section 2.
MR. MOURANT responds the new structure in Section 2 is at the
request of the Permanent Fund Dividend Division. No provisions are
being changed, other than paragraph (8) under Section 2.
SENATOR DONLEY asks Mr. Mourant to confirm that paragraph (7) is in
existing statute.
MR. MOURANT replies paragraph (7) is currently in statute.
SENATOR DONLEY asks if anyone has raised the possibility of adding
a military service exception regarding the home of record of an
individual when they entered the military.
Number 549
REPRESENTATIVE KOTT is not aware of anyone in the legislature
attempting to address that particular matter.
SENATOR DONLEY asks Representative Kott how he would feel about
that. The military personnel still in state would still be
eligible.
REPRESENTATIVE KOTT thinks it is something that could be looked
into, but it might also get into the issue of equal protection.
You have out-of-state military personnel, but you also have
students and other categories, and you would have to address that
group as a whole, rather than single out one class. He thinks the
legality of that would have to be addressed.
Number 561
SENATOR DONLEY thinks there is a rational distinction between the
classes of the military and students. He thinks the state could
meet a federal test.
Number 567
REPRESENTATIVE KOTT is not sure; there is also the Soldiers and
Sailors Relief Act that has to be taken into consideration as well.
MR. MOURANT adds that service in congress is also an allowable
absence. It does not state "service to the Alaska delegation in
congress." There are individuals who have maintained their
residency in Alaska, who work for other states' delegations in
congress who are eligible for a dividend.
Number 570
SENATOR DONLEY says that those people all established residency in
Alaska first, before they began their service in congress.
CHAIRMAN SHARP thinks they probably were residents before they
became engaged in an exemption.
TAPE 95-12, SIDE B
SENATOR RANDY PHILLIPS asks Mr. Mourant if Alaska residents who
work for other states' delegations in congress are really eligible
for a dividend.
MR. MOURANT replies he assumed they were eligible, but he sees that
a representative from the Permanent Fund Dividend Division is
shaking her head "no." He apologizes: they are eligible to vote in
this state.
SENATOR DONLEY says it appears paragraph (8) affects two classes of
people: the spouse who married an eligible recipient in Alaska, and
the spouse who married the eligible recipient after the recipient
left Alaska.
MR. MOURANT responds the spouse, or "piggybacker", must be
independently eligible, on their own merits. A spouse cannot be
eligible simply because they are married to a recipient with an
allowable absence.
CHAIRMAN SHARP comments he had a constituent who was a life-long
Alaskan who was denied a dividend because she married a military
person who wasn't eligible, and they had never even left the state.
The chairman asks about the potential cost of the bill. He asks if
anyone will be eligible, or if only people who applied for
dividends and were denied will be eligible.
Number 560
WENDY HUGHES, Dividend Appeals Unit, Permanent Fund Dividend
Division, Department of Revenue, replies there were 2,690 people
who were denied a dividend. As of December 31, there 1,373 people
who had appealed. So it would be just those additional people who
had not appealed in a timely manner who would be allowed to appeal
before September 1.
CHAIRMAN SHARP asks if the bill would include piggybacking
children.
MS. HUGHES responds the bill does not include piggybacking
children, because the court ruling regarding piggybacking only
affected spouses; it did not affect piggybacking children.
CHAIRMAN SHARP asks Ms. Hughes if most people affected by this bill
are military, or if there are students involved too.
MS. HUGHES believes about 40% are probably military, and 40%-45%
are probably students.
CHAIRMAN SHARP asks Ms. Hughes if she knows how many people qualify
under the military service allowable absence.
MS. HUGHES replies she does not know offhand, but could get that
information for the committee.
CHAIRMAN SHARP asks if the department keeps track of allowable
absences applied for and paid by paragraphs (1)-(6) in HB 4.
MS. HUGHES responds the department does keep track of that.
CHAIRMAN SHARP asks that the information be provided to the
committee.
Number 528
SENATOR LEMAN asks if the department keeps track of the military
personnel who say they intend to return to Alaska when they retire,
and those who actually do return to Alaska when they retire.
MS. HUGHES replies the department does not keep track of that.
SENATOR LEMAN asks if there is any way that information could be
tracked.
MS. HUGHES thinks that would be pretty exhaustive to attempt. The
other consideration is those who discontinue filing, even though
they might keep their residency, simply because they don't meet the
two-year physical presence requirement. They might not be dropping
simply because they didn't intend to return. So the department
really doesn't have any numbers on that.
CHAIRMAN SHARP announces HB 4 will be held until Tuesday's meeting
so that the committee can review information it has requested from
the Department of Revenue.
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