Legislature(1995 - 1996)

03/21/1995 03:35 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 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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