Legislature(1995 - 1996)

01/24/1995 08:05 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                        January 24, 1995                                       
                           8:05 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Jeannette James, Chair                                         
 Representative Scott Ogan, Vice Chair                                         
 Representative Joe Green                                                      
 Representative Ivan Ivan                                                      
 Representative Brian Porter                                                   
 Representative Caren Robinson                                                 
 Representative Ed Willis                                                      
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 None                                                                          
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 * HB 4: "An Act relating to absences from the state for purposes            
 of determining residency under the permanent fund                             
 dividend program; and providing for an effective date."                       
                                                                               
   HEARD AND HELD                                                              
                                                                               
 * HJR 3: Proposing an amendment to the Constitution of the State            
 of Alaska prohibiting the imposition of state personal                        
 income taxation, state ad valorem taxation on real                            
 property, or state retail sales taxation without the                          
 approval of the voters of the state.                                          
                                                                               
   HEARD AND HELD                                                              
                                                                               
 * HB 42: "An Act relating to absentee voting, to electronic                 
 transmission of absentee ballot applications, and to                          
 delivery of ballots to absentee ballot applicants by                          
 electronic transmission, and enacting a definition of the                     
 term `state election' for purposes of absentee voting."                       
                                                                               
   PASSED OUT OF COMMITTEE                                                     
                                                                               
 * HB 70: "An Act relating to treatment of permanent fund dividends          
 for purposes of determining eligibility for certain                           
 benefits; and providing for an effective date."                               
                                                                               
   HEARD AND HELD                                                              
                                                                               
 * HB 81:"An Act relating to the preservation of public facilities            
 and to appropriations for annual maintenance and repair,                      
 periodic renewal and replacement, and construction of                         
 public facilities."                                                           
                                                                               
 SCHEDULED BUT NOT HEARD                                                     
 (* First public hearing)                                                      
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 REPRESENTATIVE PETE KOTT                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 432                                                    
 Juneau, AK  99801                                                             
 Telephone: 465-3777                                                           
 POSITION STATEMENT:  Sponsor of HB 4                                          
                                                                               
 TOM WILLIAMS, Director                                                        
 Permanent Fund Dividend Division                                              
 Department of Revenue                                                         
 PO Box 110460                                                                 
 Juneau, AK  99811                                                             
 Telephone: 465-2096                                                           
 POSITION STATEMENT:  Provided information                                     
                                                                               
 JUDY ERICKSON                                                                 
 319 Seward Street, #4                                                         
 Juneau AK  99801                                                              
 Telephone: 586-3118                                                           
 POSITION STATEMENT:  Supported HB 4                                           
                                                                               
 REPRESENTATIVE JOHN DAVIES                                                    
 Alaska State Legislature                                                      
 Capitol Building, Room 422                                                    
 Juneau, AK  99801                                                             
 Telephone: 465-4457                                                           
 POSITION STATEMENT:  Supported HB 4 and suggested amendments                  
                                                                               
 REPRESENTATIVE TERRY MARTIN                                                   
 Alaska State Legislature                                                      
 Capitol Building, Room 502                                                    
 Juneau, AK  99801                                                             
 Telephone: 465-3783                                                           
 POSITION STATEMENT:  Sponsored HJR 3 and HB 42                                
                                                                               
 JACK CHENOWETH, Attorney                                                      
 Legislative Legal Services                                                    
 130 Seward Street, Suite 409                                                  
 Juneau, AK  99801                                                             
 Telephone:  465-2450                                                          
 POSITION STATEMENT:  Provided information                                     
                                                                               
 DAVID KOIVUNIEMI, Acting Director                                             
 Division of Elections                                                         
 240 Main Street, 4th Floor                                                    
 Juneau, AK  99801                                                             
 Telephone: 465-4611                                                           
 POSITION STATEMENT:  Provided information                                     
                                                                               
 STAN RINGMAN, Legislative Aide                                                
 Representative Scott Ogan                                                     
 Capitol Building, Room 409                                                    
 Juneau, AK  99801                                                             
 Telephone:  465-3878                                                          
 POSITION STATEMENT:  Commented on HB 42                                       
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 4                                                                 
 SHORT TITLE: PERMANENT FUND DIVIDEND                                          
 SPONSOR(S): REPRESENTATIVE(S) KOTT                                            
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 01/06/95        21    (H)   PREFILE RELEASED                                  
 01/16/95        21    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        21    (H)   STA, JUD, FIN                                     
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
                                                                               
 BILL:  HJR 3                                                                
 SHORT TITLE: VOTER APPROVAL FOR NEW TAXES                                     
 SPONSOR(S): REPRESENTATIVE(S) MARTIN, Rokeberg, Bunde                         
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 01/06/95        16    (H)   PREFILE RELEASED                                  
 01/16/95        16    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        16    (H)   STA, JUD, FIN                                     
 01/19/95        86    (H)   COSPONSOR(S): BUNDE                               
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 42                                                                
 SHORT TITLE: ABSENTEE VOTING & USE OF FAX                                     
 SPONSOR(S): REPRESENTATIVE(S) MARTIN                                          
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 01/06/95        31    (H)   PREFILE RELEASED                                  
 01/16/95        31    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        31    (H)   STA, JUD, FIN                                     
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB 70                                                                
 SHORT TITLE: END PERMANENT FUND DIVIDEND HOLD HARMLESS                        
 SPONSOR(S): REPRESENTATIVE(S) KOTT, Green                                     
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 01/06/95        39    (H)   PREFILE RELEASED                                  
 01/16/95        39    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        39    (H)   STA, JUD, FIN                                     
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
                                                                               
 BILL:  HB  81                                                               
 SHORT TITLE: PRESERVATION OF PUBLIC FACILITIES                                
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 01/13/95        42    (H)   PREFILE RELEASED                                  
 01/16/95        42    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        42    (H)   STA, TRA, FIN                                     
 01/24/95              (H)   STA AT 08:00 AM CAPITOL 102                       
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 95-1, SIDE A                                                             
 Number 000                                                                    
                                                                               
 The House State Affairs Committee was called to order by CHAIR                
 JEANNETTE JAMES at 8:05 a.m.  Members present at the call to order            
 were Representatives James, Green, Ivan, Porter, Robinson and                 
 Willis.  Chair James stated there was a quorum present and                    
 introduced Representatives John Davies, Terry Martin and Pete Kott.           
                                                                               
 CHAIR JAMES introduced her staff and described their duties:  Walt            
 Wilcox, Committee Aide; Sam Griswold, Committee Secretary; Barbara            
 Cotting, Legislative Aide, and Myrna McGhie, Legislative Assistant.           
 She announced to the committee that meetings will be held Tuesdays            
 and Thursdays from 8:00 a.m. to 10:00 a.m. or longer, if necessary,           
 and Saturday 10:00 a.m. until noon, as necessary, to allow public             
 testimony for the working public who can only testify on Saturdays.           
                                                                               
 Number 070                                                                    
                                                                               
 CHAIR JAMES outlined guidelines and procedures for committee                  
 members, as well as the requirements for hearing bills.  She stated           
 committee substitutes will be ordered from Legislative Legal                  
 Services through the Chair only, to avoid confusion.  Substitute              
 amendments will require an additional public hearing after a                  
 committee substitute is done.  If there is a very substantive                 
 amendment, within the committee, an additional hearing will have to           
 be noticed.  Major amendments must be submitted to the Chair at               
 least 24 hours before they are to be heard.  She added that                   
 normally bills will be heard in the order listed on the committee             
 calendar to make it expedient for people wanting to testify.  She             
 noted subcommittees on individual bills, assigned as needed by the            
 Chair, will not be chaired by the bill sponsor.                               
                                                                               
 CHAIR JAMES noted for the record the arrival of Representatives               
 Ogan and Willis.                                                              
 HSTA - 01/24/95                                                               
                                                                               
 Number 205                                                                    
                                                                              
 HB 4 - PERMANENT FUND DIVIDEND ELIGIBILITY                                   
                                                                               
 REPRESENTATIVE PETE KOTT, SPONSOR OF HB 4, noted that a similar               
 bill to HB 4 almost passed last year, but died awaiting concurrence           
 the final night of session.  This legislation would remedy a                  
 problem resulting from a court ruling.  That ruling suggests that             
 wives of those eligible to receive the permanent fund, living out             
 of state, are no longer eligible.  It is the piggyback rule.  The             
 wives cannot piggyback on their husband's travel and be considered            
 eligible.  This measure is trying to correct that, and is                     
 retroactive to January 1, 1994, to allow all those last year into             
 the program.  From early indications, the fiscal note will be                 
 approximately $600.  He said a representative from the Department             
 of Revenue was present at the meeting to suggest some changes that            
 he is in agreement with.  Representative Kott said some of the                
 changes were a result of the new 1995 permanent fund application.             
                                                                               
 REPRESENTATIVE JOE GREEN questioned the amount in the fiscal note.            
                                                                               
 REPRESENTATIVE KOTT said the early fiscal note indications, and               
 this still has to come down from the Governor, is $600.  It is an             
 unofficial version awaiting arrival from the Governor's Office.               
                                                                               
 CHAIR JAMES noted that the Governor's Office is having a problem              
 getting geared up to provide fiscal notes.  They are behind,                  
 therefore, she recommended lenience on getting these bills passed.            
 This bill has additional referrals to Judiciary and Finance, so it            
 will not be passing without a fiscal note.  It will be at the will            
 of committee about what we do.                                                
                                                                               
 REPRESENTATIVE KOTT said it was unofficial, but, by June 30, 1995,            
 the division will mail out 1,300 notices to those who were denied             
 in 1994, and that is the $600 mailing and processing cost.                    
                                                                               
 Number 265                                                                    
                                                                               
 REPRESENTATIVE GREEN remarked that the $600 is for mailing, but               
 what about the amount of the money that the permanent fund then is            
 actually giving to how ever many spouses, dependent children and              
 other eligible people.                                                        
                                                                               
 REPRESENTATIVE KOTT estimated the cost for implementing this bill             
 would be about a $2 per person reduction in the dividend check that           
 each individual would receive, and this was not coming from general           
 fund money.  Military spouses and other members who accompanied               
 their husbands out of state were on an eligible absence and were              
 receiving the permanent fund dividend (PFD) check for about eight             
 or nine years before the judge ruled on this.  The original intent            
 of the legislature was not to prohibit those eligible wives or                
 spouses from receiving the dividend check when they were                      
 accompanying their eligible spouse.  Currently, the eligible spouse           
 and eligible children can receive it, but the wife or husband                 
 cannot receive it.  This bill corrects a deficiency in a court                
 ruling that was somewhat inaccurate.                                          
                                                                               
 CHAIR JAMES asked if there were any further questions.   She                  
 introduced Tom Williams, Director, Permanent Fund Dividend                    
 Division, Department of Revenue.                                              
                                                                               
 Number 290                                                                    
                                                                               
 TOM WILLIAMS, DIRECTOR, PERMANENT FUND DIVIDEND DIVISION,                     
 DEPARTMENT OF REVENUE, referred the committee to a handout for his            
 testimony.  He summarized the lengthy document, saying there was              
 court action, which on December 16, 1993, invalidated a regulation            
 allowing spouses to piggyback onto their eligible Alaska resident's           
 absence.  As a result of a change in the law that occurred,                   
 effective January 1992, there was a conflict between a statute and            
 a regulation.  With such a regulation, the regulation falls.  The             
 department asked the legislature to fix that problem last year, and           
 in HB 392 there was language to do that.   HB 392 did not pass in             
 the final minutes of session.  The effect was to make the piggyback           
 absence invalid since January 1, 1992.  It affected 1992, 1993 and            
 1994 applicants.  Virtually all of the 1992 and 1993 applicants had           
 been paid.  Some were remaining in appeals.  When the department              
 got ready to pay those remaining in appeals, if they were denied              
 for another reason and that denial was subsequently overturned,               
 they could not do it they discovered, because the applicants no               
 longer had an allowable absence.  After consulting with the                   
 Attorney General's Office, the division determined they would not             
 go back and assess the 1992 and 1993 applicants that had already              
 been paid.  So, the only people that have been affected from 1992             
 and 1993, were those that had an appeal pending.  That denial had             
 been overturned and they're just waiting to be paid.  They pended             
 those - they did not take any action on them; they held them                  
 awaiting a legislative solution.                                              
                                                                               
 MR. WILLIAMS said 1994 was different.  He explained none of the               
 1994 applications have been paid.  The division had no basis for              
 making that allowable absence since it had been struck down.  The             
 division ended up denying all those that had been absent more than            
 180 days.  Mr. Williams said they looked at those who had been gone           
 less than 180 days and tried to fit them into the general 180-day             
 discretionary absence where they could.  Unfortunately, not many of           
 those people met that requirement.  The total they were required to           
 deny was 2,690 spouses.  There were also some children that were              
 sponsored by those spouses.  These spouses were given the                     
 opportunity to change the sponsorship of those children over to the           
 other Alaska resident.  Some took advantage of that, but not                  
 everybody did.  Consequently, if they did not have an eligible                
 sponsor, the department had to deny them payment.  The intent of              
 the legislation is to retroactively reinstate the piggyback rule to           
 where it was prior to the court ruling.  After discussing the bill            
 with the Department of Law, there is some question as to whether              
 the initial draft actually does that.  There is a conflict between            
 two statutes.  The conflict arises because absences are a component           
 of a definition of state residency.  This legislation takes what              
 was once described as an allowable absence by regulation and moves            
 it into statute.  They drafted a committee substitute that will do            
 what the sponsor has, except it removes all doubt regarding the               
 technical problem.  It removes the allowable absences from the                
 definition of state resident, moves it to a separate section, and             
 defines allowable absence as an eligibility criteria.  That                   
 eliminates the conflict with the provision that says you cannot               
 consider the residency of your spouse as not the principal factor.            
 It still retains the allowable absence provision, and it allows it            
 to reinstate the historically allowable absences that has been on             
 the books since the beginning of the program.  Another difference             
 is that in Section IV of the proposed version, it would ensure that           
 the 1992, 1993 and 1994 applicants are made whole again.  He said             
 that would allow the division to pay those 1992 and 1993                      
 piggybacking spouses that are currently pending.  In Section V, it            
 takes a different approach to an extension of an application                  
 period.  In the original bill there is a provision saying that 1994           
 and 1995 applicants have until September 1 to resubmit an                     
 application if they were affected by this legislation.  The                   
 division believes that piggybacking spouses who applied in the past           
 have already applied for the 1994 dividend, and those applications            
 are on file.   So this is an extension of the appeal deadline up to           
 September 1, as opposed to the reapplication period.  While the               
 division had denied 2,690 applicants, they only received appeals              
 from 1,373 applicants.  Those have been pended.  The other 1,300              
 that have not appealed would benefit by having an extended appeal             
 period.  With regard to 1995, the proposed substitute doesn't have            
 anything to do with them as far as an extended filing period.  The            
 reason for that is contained in the last two pages of the                     
 information before the committee.  He indicated that the division             
 has put an important notice in the 1995 dividend application to               
 spouses absent from Alaska, which is that they should go ahead and            
 apply for the 1995 dividend by the application deadline.                      
                                                                               
 Number 435                                                                    
                                                                               
 MR. WILLIAMS said the fiscal note covers preparing and doing a                
 mailout to those people we want to target, letting them know the              
 law has changed and they can appeal or reapply, whichever the                 
 legislature chooses.  He also referred to a question asked by                 
 Representative Green about the fiscal note, saying they have not              
 included any fiscal impact related to the total amount of the                 
 dividend because, by formula, there is a certain amount that will             
 be distributed.  It doesn't change the amount of dividend payments,           
 it will change who it goes to.  Assuming there were 2,690 people              
 paid, it would calculate to a little over $2.6 million.                       
                                                                               
 Number 465                                                                    
                                                                               
 REPRESENTATIVE GREEN asked if eligibility is automatic for persons            
 from another state who are married to someone in the military, who            
 is an Alaskan resident because of their military service and is               
 then shipped out.                                                             
                                                                               
 MR. WILLIAMS said the piggybacking spouse rule only applies to                
 individuals who accompany an eligible Alaska resident.  It doesn't            
 apply to individuals accompanying a resident from another state.              
 Both spouses have to be Alaska residents and they have to take the            
 steps to initiate their own Alaska residency prior to the                     
 qualifying year.  So for them to get the 1994 dividend, both                  
 spouses would have had to establish Alaska residency through normal           
 means, declaring that they are an Alaska resident registering to              
 vote, prior to the beginning of the qualifying year that would have           
 been prior to January 1, 1993.                                                
                                                                               
 Number 494                                                                    
                                                                               
 REPRESENTATIVE BRIAN PORTER asked how many more eligible people               
 this version of the bill would incorporate in the past and in the             
 future.  There are some applications pending for 1992 and 1993,               
 that the new wording would provide the division a better way of               
 providing money.  He wondered if they could do it anyway with                 
 Representative Kott's version.                                                
                                                                               
 MR. WILLIAMS answered no.  Under Representative Kott's version                
 there is no relief for 1992 and 1993.  That is why they suggested             
 that they make sure it goes back to...effective for 1992 and 1993.            
 He did not how many there are, he did not have a number, but                  
 probably fewer than 100.                                                      
                                                                               
 REPRESENTATIVE PORTER wondered if there were any other categories             
 of individuals who would be eligible under his version, besides the           
 100, as opposed to the original bill.                                         
                                                                               
 MR. WILLIAMS answered "No.  They are not opening it up beyond the             
 piggybacking spouse.  Another important issue is that they included           
 in the committee substitute, a modifier that you must accompany an            
 `eligible Alaskan resident' as opposed to just an `Alaska                     
 resident.'"                                                                   
                                                                               
 Number 520                                                                    
                                                                               
 REPRESENTATIVE SCOTT OGAN asked if moneys have been set aside on              
 the pending applications, and where the revenues will come from if            
 it is not set aside.                                                          
                                                                               
 MR. WILLIAMS said moneys were not originally calculated in to cover           
 that.  It was originally estimated there would be 535,000 payable             
 as of December 31, 1994.  Our actual payables were 531,000.  There            
 should be money there to pay those.  The worse case scenario is               
 that the pending applicants would have to wait until July 1,                  
 because there is a provision under AS 43.23.025 which has the                 
 calculation of the dividend.  Every year you put all the money that           
 is left in one pot, slice off what is necessary to pay prior year             
 dividends, including these, then you calculate the remaining                  
 dividends.  There is a method by which people can be paid, if they            
 can be paid now, because there are sufficient funds in the pot.  He           
 said they would do that just as soon as the legislation passed.  If           
 there was not, they would wait until July 1, at which time there              
 would be, assuming the dividend program continues.                            
                                                                               
 REPRESENTATIVE OGAN asked if people's PFD checks will not be                  
 reduced next year, if these pending applications are paid.                    
                                                                               
 MR. WILLIAMS said there is a possibility that will occur.  It will            
 depend on the number of other appeals that are overturned and                 
 whether we come up to that actual 535,000.  It is possible there              
 will be virtually no effect.                                                  
                                                                               
 Number 550                                                                    
                                                                               
 REPRESENTATIVE IVAN IVAN had questions about the committee                    
 substitute.  On page 3 of the proposed committee substitute, the              
 new language inserted reads, "Maintains and demonstrates at all               
 times an intent to return to the state."  He questioned what the              
 division uses as the criteria to show that intent when determining            
 eligibility.                                                                  
                                                                               
 MR. WILLIAMS said first they basically assume that the applicant is           
 honest in telling them they have the intent to return to the state.           
 They will believe them.  They look for indicators that would be               
 inconsistent with that intent.  In fact, they adopted by regulation           
 a series of steps or actions that clearly are inconsistent with the           
 individual's intent.  As long as an individual does not take an               
 action inconsistent with maintaining that intent they will tend to            
 believe them.  They look for indications, such as the individual              
 routinely coming back to the state after an absence, and if they              
 maintain any ties here, or show some sort of connection to the                
 state.  They look for hard evidence to prove out their intent, but            
 they start with the premise that their intent is valid.                       
                                                                               
 REPRESENTATIVE IVAN asked if the language appears in other statutes           
 relating to the permanent fund.                                               
                                                                               
 MR. WILLIAMS assured Representative Ivan that it is consistent with           
 Title I, AS 01.10.055, which generally is the general residency               
 description for the permanent fund.                                           
                                                                               
 REPRESENTATIVE IVAN asked about the appeal period that is in place            
 in retroactive payments to persons who are found eligible for the             
 program.  He asked about constituents who have missed a year, due             
 to the inability to read languages.  Representative Ivan asked if             
 they would still be eligible to get the dividend check they missed            
 the prior year if they failed to submit an application, or it was             
 lost enroute.  He asked how they handle that.                                 
                                                                               
 MR. WILLIAMS said there is no provision for adult individuals who             
 have missed or failed to file an application.  There is a provision           
 in law for children for whom an adult did not file an application             
 to come back within one year of their eighteenth birthday or within           
 one year of emancipation, to file for missed dividends.  If an                
 application was lost in the mail individuals can resubmit an                  
 application by a particular deadline.  They have to provide a                 
 variety of proofs that they did submit a timely application.                  
                                                                               
 REPRESENTATIVE CAREN ROBINSON referred to two of her constituents,            
 whose spouses have gone out to further their education, and they              
 own property in Juneau.  Also, one of the constituents returns to             
 do business.   She wanted to reaffirm that these are the types of             
 people we are trying to get to who are deserving of the PFD.  They            
 clearly show long term residency, own property, and clearly have              
 intent of coming back and only went temporarily to get further                
 education or other kinds of military reasons.                                 
                                                                               
 MR. WILLIAMS agreed.  He said the piggybacking absence applies to             
 any spouse that is piggybacking onto any legitimate absence.  It is           
 not just military.  There are students, our congressional                     
 delegation, and service on the staff.   Military and students are             
 probably the highest category where piggybacking would apply.                 
                                                                               
 Number 615                                                                    
                                                                               
 CHAIR JAMES determined there were no further questions from the               
 committee and no one waiting on the teleconference, so she called             
 Judy Erickson to testify.                                                     
                                                                               
 Number 618                                                                    
                                                                               
 JUDY ERICKSON, BUSINESS OWNER, CAPITAL INFORMATION GROUP, and                 
 Juneau resident.  She gave testimony in support of the bill.   She            
 testified that a personal experience made her aware of this issue             
 when her ex-husband required long-term medical treatment outside of           
 Alaska.  Ms. Erickson explained that her ex-husband and his wife              
 have lived in Alaska for 20 years, they maintain a home in Juneau.            
 They have children whom they try to get down to see him as often as           
 possible, for emotional support.  The financial burden is great and           
 it is important for them to have the dividend.  She wanted to                 
 encourage the committee to change the law on this issue to allow              
 people in this situation to receive the PFD.                                  
                                                                               
 Number 640                                                                    
                                                                               
 CHAIR JAMES asked if there was anyone else from the floor who                 
 wanted to give testimony.                                                     
                                                                               
 REPRESENTATIVE JOHN DAVIES wished to add his voice in support for             
 this particular bill stating that PFD problems are common among his           
 constituents.  He thinks the bill is long overdue and ought to be             
 passed.  He suggested adding two other categories that they might             
 want to consider.  They are included in HB 5 and fit in the                   
 structure of HB 4.  The categories are: (1) Services of Volunteers            
 of the Red Cross; and (2) Services of Volunteer of the                        
 International Executive Service Corps.  It is slightly different in           
 that it is a private nonprofit organization and does things                   
 essentially the same as the Peace Corps, which is an allowable                
 absence.  The Executive Service Corps matches up predominately                
 retired executives in the U.S. with a business in a developing                
 country or foreign country, where our business techniques can help            
 advance the operation of a similar business in another country.  It           
 is by invitation of the other governments.  It functions as the               
 Peace Corps does in principle, but it is directed at making                   
 businesses more productive.  It benefits all of us, because it is             
 international trade and a good thing to do morally.                           
                                                                               
 Number 685                                                                    
                                                                               
 CHAIR JAMES rolled HB 4 over to the next calendar meeting, asking             
 the sponsor for a committee substitute with changes in the original           
 bill.  Representatives Porter and Robinson agreed the bill could              
 not be passed as it was, that changes were necessary.                         
                                                                               
 TAPE 94-1, SIDE B                                                             
 Number 022                                                                    
                                                                               
 CHAIR JAMES stated they should pass bills in the best condition               
 they think they ought to be.  She suggested the bill be brought               
 back with amendments to the original bill so they could see the               
 changes they are proposing, including the suggestions made by                 
 Representative Davies.   The committee would try to get back to it            
 Thursday and pass it.                                                         
                                                                               
 Number 065                                                                    
                                                                               
 CHAIR JAMES brought the meeting back to order after a five minute             
 break and asked the record to reflect that Representative Ivan Ivan           
 was still out.                                                                
 HSTA - 01/24/95                                                               
 Number 104                                                                    
                                                                               
 HJR 3 - VOTER APPROVAL OF NEW TAXES                                         
                                                                               
 CHAIR JAMES went to the next bill on the agenda, which was HJR 3,             
 and called REPRESENTATIVE TERRY MARTIN who is sponsoring the bill             
 to the table to make his presentation.                                        
                                                                               
 REPRESENTATIVE TERRY MARTIN, SPONSOR OF HJR 3, gave a history of              
 taxation in the U.S. and stated the importance of allowing voters             
 to decide on taxation.  His sponsor summary for HRJ 3 is as                   
 follows, for the record:                                                      
                                                                               
 Proposing an amendment to the Alaska Constitution to require                 
 the approval by the state's voters for the imposition of state                
 income tax, state ad valorem tax on real property, or state                   
 retail sales taxation.                                                        
                                                                               
 "HJR 3 is intended to prevent exorbitant and disproportionate                
 taxes from harming Alaskan residents.  Taxation, whether                      
 income, property, or retail merchandise is not the answer to                  
 increasing state revenues.                                                    
                                                                               
 Need for Legislation                                                       
                                                                               
 "The State of Alaska currently ranks first in state tax                      
 revenue per $100 of personal income, and ranks third for local                
 tax revenue per $100 of personal income.  Although oil and gas                
 taxes contribute to a large portion of the state tax ranking,                 
 the local burden clearly depicts the high level of taxes                      
 Alaskans suffer.  States such as Florida and Nevada prohibit                  
 their legislature from enacting a personal income tax, while                  
 the Colorado Legislature passed a 1992 law requiring voter                    
 approval for any permanent tax increase.  Five states have                    
 constitutional mandates preventing specific taxes, while 10                   
 states require a `super majority' of their legislature to pass                
 various taxes.                                                                
                                                                               
 "These advances in the elimination of unwarranted taxation are               
 indicative of the national trend.  In Alaska, voters are                      
 extremely apprehensive about new and elevated taxes.  The                     
 general viewpoint has been to work in conjunction with the                    
 legislature, rather than to grant them full autonomy over                     
 taxation.  HJR 3 would transfer the final authority of                        
 statewide taxation from the legislature to the citizenry."                    
                                                                               
 Number 195                                                                    
                                                                               
 CHAIR JAMES reported for the record that Representative Ivan Ivan             
 returned shortly after Representative Martin began speaking.   She            
 then asked if there were any questions.                                       
                                                                               
 REPRESENTATIVE GREEN testified in support of the bill.  He said he            
 supported the bill strongly from a fiscally conservative point of             
 view.  His concern is about how the action of the various bodies              
 delegate their responsibility as taxing authorities.  The                     
 legislature is the one empowered to do taxing and they, in turn,              
 give this back to the people.  He asked how this works in other               
 states, if there have been problems, and if the people have                   
 empowered or instigated a tax again through popular vote.                     
                                                                               
 REPRESENTATIVE MARTIN explained that other states have reinstated             
 a tax through popular vote.   Legislators are elected as their                
 representatives, but it is a sharing of responsibilities that is              
 happening now.  We need to go back to the people for certain                  
 things, and give the people a voice to change the constitution or             
 to speak to the legislators through the petition process.  People             
 are becoming concerned, nationwide as well as citywide and                    
 statewide, that the government has too much money.   We have to put           
 restraints on it and listen to the people.                                    
                                                                               
 REPRESENTATIVE GREEN asked if people in other states that have                
 enacted legislation like this, where the state requires public                
 approval of taxes, have increased taxes or imposed a tax by popular           
 vote.                                                                         
                                                                               
 REPRESENTATIVE MARTIN referred to the tax revolt under the Jarvis             
 Amendment in California, which had been very effective in                     
 controlling California's wild spending.  There were other taxes               
 accepted in San Diego when people decided to tax themselves for               
 more education.  The state of Colorado recently followed the                  
 revolution of the Jarvis Act in California and put heavy                      
 restrictions on their state legislators on the capping of tax.                
 People will vote to reinstate taxes when it becomes necessary.                
                                                                               
 REPRESENTATIVE GREEN said his concern is that we in Alaska will               
 have to impose a tax at some future time, once spending is brought            
 under control.  He wondered if we move this legislation, if the               
 people would vote to reinstate a tax.                                         
                                                                               
 Number 308                                                                    
                                                                               
 REPRESENTATIVE ROBINSON had two concerns.  From what she has seen             
 is that in Alaska it has been just the opposite.  We not only have            
 imposed an income tax, we have also come back and repealed an                 
 income tax.  It was an act of the legislature.  Historically, the             
 legislature has acted responsibly regarding this issue, which is              
 our constitutional duty, so she asked why Representative Martin               
 perceived a problem and why he thought we need to move on this one.           
 Her second question was about another fear she has.  The fear is              
 being caught in a crisis and just being on hold about whether the             
 public would agree that we were in a crisis and would vote to tax             
 themselves.  For example, if oil dropped to $8 a barrel, it would             
 be the legislature's responsibility to keep the state functioning             
 and to keep a responsible budget while just hoping for voters'                
 approval and they would tax themselves.                                       
                                                                               
 REPRESENTATIVE MARTIN commented that fear is the driving force of             
 the legislature, one way or the other.  Legislators fear the public           
 voice every two years when running for election.  If it came to a             
 revenue crisis he felt there were other options available to the              
 legislature before taxing.  Taxing may take a year or two years to            
 get started; by then, government is stopped.  He said, "Do we have            
 guts enough to cap the dividends for one year or two years?"  If we           
 capped it this year at $1,000 per person, you would have $227                 
 million for the 1996 budget available to you.  Representative                 
 Martin felt that, when we talk about fear, we need to ask in what             
 way are we fearful of the public.  To make his point, he said,                
 "Will they cut my head off because I capped the dividends or would            
 they cut my head off because I allowed them to vote on taxes?"                
                                                                               
 Number 371                                                                    
                                                                               
 REPRESENTATIVE PORTER said that his concern is timing.  One of the            
 major chores of this legislature is to attempt to set up a long-              
 range fiscal plan, which will require a vote of the public because            
 of the Constitutional Budget Reserve issue and the spending                   
 limitation, and to try to get something for a five-year period                
 rather than something changeable every two years.  He wondered if             
 that process would be somewhat frustrated if this and that process            
 were going on simultaneously.                                                 
                                                                               
 REPRESENTATIVE MARTIN said that when talking about a five-year plan           
 this could be part of it.  We could have it on the ballot for the             
 next election to show the people are willing to talk about taxing.            
 If asked about tax for education, they may pass it with ease.  If             
 the legislature taxes the people on income tax without giving them            
 a voice they rebel, but give them a voice and they will cooperate.            
 Part of the plan for future funding is to allow the voice of the              
 people to be heard.                                                           
                                                                               
 Number 415                                                                    
                                                                               
 REPRESENTATIVE PORTER said he would be more comfortable if there              
 were limitations put on interest groups being able to lobby one way           
 or another on the public.  It often comes down as money for                   
 advertising, in that kind of situation, not with the real will of             
 the people.                                                                   
                                                                               
 Number 419                                                                    
                                                                               
 REPRESENTATIVE IVAN presented a question to Representative Martin             
 about his bill where it compares Alaska to other states in the                
 Lower 48.  It states that Alaska ranks first in state revenue for             
 $100 for personal income and third for local tax revenue.                     
 Representative Ivan asked how much of these figures are paid by oil           
 companies and other resource users, and how much is paid by                   
 individuals for local or state taxes.  When looking at the                    
 situation as it is today, and trying to see our future, and what we           
 have to deal with in order to come up with a fiscal plan, these are           
 facts that he felt he needed to know to go with Representative                
 Martin in this process.                                                       
                                                                               
 REPRESENTATIVE MARTIN said it is good to find out what is happening           
 in other states of democracy and republican form of government.  He           
 explained that is why the National Council of State Legislators               
 (NCSL) was able to give them this important information.  The                 
 information shows that on the state level we are number one, and on           
 the local level we are number one.  On the state level everyone is            
 equal:  $12.80 per $100 tax that someone is paying for us now,                
 mostly the oil companies.  That is between 80 percent and 85                  
 percent.  It is down now to about 80 percent because of productions           
 decrease and so on.  When we come to property tax, the overall is             
 $6 per $100 that the average Alaskan pays; but it varies from                 
 community to community, for some have a sales tax but low property            
 tax.  Some have high property tax and no sales tax.  Other                    
 communities like the North Slope Borough from Valdez and Fairbanks            
 that can have a high mill rate on the pipeline, which takes the               
 money directly out of state revenues and gives it to local                    
 government that other areas don't have the access to, but that                
 property tax decreased to what might be a local property tax.  The            
 average is $6.00 by the national foundation:  It is strictly an               
 average.  If people were asked to pay a tax because of a decrease             
 in oil production, a new 3 percent or 4 percent of this total cost            
 of government, he thinks the people will pay the tax if they know             
 it is going for a specific purpose.                                           
                                                                               
 REPRESENTATIVE ROBINSON asked Representative Martin if this bill              
 passes the House and Senate, if another bill would have to be                 
 passed to say it must go to the vote of the people with a plan.               
                                                                               
 REPRESENTATIVE  MARTIN said yes, this could be part of the future             
 plan.  Once the people have been given the right to have a voice in           
 the future financing of the state, then we can go to them with our            
 total package for the next five or ten years.                                 
                                                                               
 REPRESENTATIVE ROBINSON reaffirmed that there would have to be                
 another bill passed by the legislature before we could pursue any             
 taxation.  She also pointed out that there is no fiscal note, and             
 this bill would clearly need a fiscal note.                                   
                                                                               
 REPRESENTATIVE MARTIN said the Administration is having difficulty            
 catching up with everything, and asked if he could introduce                  
 through the committee to accept a typical $2,200 fiscal note for              
 any ballot question.  It wouldn't be any more than that.                      
                                                                               
 Number 506                                                                    
                                                                               
 CHAIR JAMES asserted that it would be a two-part process.  This               
 bill is a request for a constitutional amendment.   For this bill             
 to pass it needs to pass with a two-thirds (2/3) vote in both                 
 houses.   Then it would go to the public for them to vote as to               
 whether or not they wanted to have this authority to decide on                
 these issues.  That is the first issue, and that is the issue                 
 before this committee.  This does not have anything to do with                
 whether or not we want to tax.  Pending the decision by the people            
 on this bill that would be what we would do when we want to impose            
 a tax.  CHAIR JAMES agreed with Representative Porter that the                
 Senate, the House and the Governor, support the formation of a                
 long-range planning commission to establish goals for a five year             
 period, and that is going to take a constitutional amendment.  It             
 is very specific in the constitution that you cannot commit another           
 legislature, and legislatures only last two years.  This committee            
 or this legislature cannot put anything into any specific form,               
 which says they must do something.  If the public tells us this is            
 what they want us to do, and the five-year plan should be put out             
 for the vote of the people, then it would behoove the legislature             
 to do it whether or not they are compelled by the constitution to             
 do it.  They would be responding to the people's needs.  Further,             
 CHAIR JAMES said she trusts the people too, and it is never a                 
 mistake to ask the people what to do.  It is difficult to have the            
 thumb on the pulse of the people without asking them specifically             
 to vote for a specific issue.  She said, if they are wrong, or they           
 as legislators do not think they understand something, it behooves            
 them to make the public understand.  It is important that everyone            
 is on the same plane.                                                         
                                                                               
 REPRESENTATIVE ROBINSON asked if they could still go to the people            
 and ask their opinion, as an advisory vote, without this bill.                
                                                                               
 REPRESENTATIVE JAMES explained that whenever they go to the people            
 for a vote when it is not a constitutional mandate, what they are             
 asking is an advisory vote.  They can go forward and do what the              
 people said or not.  It is just an advisory vote.                             
                                                                               
 REPRESENTATIVE MARTIN said the experience with the advisory vote is           
 that the legislators do not listen to the people.  It is a gimmick            
 in the history of this state to kill an issue.  The legislature               
 does not follow through on the advice of the people.                          
                                                                               
 CHAIR JAMES commented on the language of the bill.  Her concern was           
 that it is brief.  Even though constitutional amendments are                  
 intended to be brief, they are not intended to put law in the                 
 constitution, but rather philosophy.  Yet for establishing a state            
 tax on personal income, the question is very basic; there is not              
 anything said in this bill that would indicate that we would need             
 to ask about any gross increases in that tax.  If the people voted            
 on it, and it becomes part of our constitution that says if we want           
 to establish a state tax on personal income, we must first ask the            
 people.  So if we ask the people, then if the legislature puts a 1            
 percent tax on our income and they say yes, then the following year           
 decide to increase it, this amendment does not preclude the                   
 legislature from raising taxes.  She wondered if the bill is                  
 sufficient to do what they intend it to do.                                   
                                                                               
 REPRESENTATIVE MARTIN hopes it is.  The intent is that any                    
 increases in personal taxes would go to the people for a vote.  If            
 we put on a 2 percent sales tax for the state, and say it would               
 bring in $200 million, then if two years down the line the                    
 legislature decided it needs another $100 million for something,              
 then the people would have the chance to vote on that increase.               
 This is personal taxes.  We don't interfere with business taxes,              
 commercial taxes, oil taxes or severances.                                    
                                                                               
 CHAIR JAMES brought up the legislature's ability to authorize                 
 agencies to put on fees.  This legislation is turning the decision            
 on whether or not to have income tax over to the people and taking            
 it out of our courts.  She asked Representative Martin to comment             
 on that.                                                                      
                                                                               
 REPRESENTATIVE MARTIN commented that we should stay out of that,              
 because the people would show very clearly that they might not want           
 to pay more fees.                                                             
                                                                               
 CHAIR JAMES said we as a legislature, an authorizing body,                    
 authorize fees and now we have no control over what happens to the            
 fees.  The language of this bill does not preclude the legislature            
 from raising the taxes.                                                       
                                                                               
 REPRESENTATIVE MARTIN said we do have the right to control fees in            
 this state, in all agencies, whether it be for motor vehicle plates           
 or for all kinds of services.  The legislature, on behalf of the              
 citizens, has that control.                                                   
                                                                               
 REPRESENTATIVE PORTER said that, for the record, the wording:                 
 "prohibiting any imposition of state income tax, ad valorem                   
 taxation on real property, or retail sales tax without approval of            
 the voters."  He wanted to make clear that we are not by-passing              
 this, by prohibiting boroughs or municipalities.                              
                                                                               
 Number 621                                                                    
                                                                               
 REPRESENTATIVE MARTIN said that is a whole other issue.  This is              
 strictly to the state.                                                        
                                                                               
 Number 638                                                                    
                                                                               
 JACK CHENOWETH, LEGISLATIVE LEGAL SERVICES, testified that the                
 changes in the rate after the tax is in place is not clear.  If you           
 want the voters to be able to say yes or no to a change of rate in            
 any of these taxes, this has to be in the bill.  It should be                 
 stated, and increases and decreases must be stated also, or the               
 courts will get on it.                                                        
                                                                               
 REPRESENTATIVE MARTIN said because he feels the people should have            
 that right he would go by his suggestion.                                     
                                                                               
 Number 670                                                                    
                                                                               
 CHAIR JAMES asked if anyone wished to make any amendments.  She was           
 not comfortable moving the bill without the changes to make it                
 clearer.  Constitutional amendments must be clear enough to                   
 understand.  She did not feel comfortable moving it out of                    
 committee in this condition.                                                  
                                                                               
 REPRESENTATIVE MARTIN agreed to do a committee substitute.                    
                                                                               
 CHAIR JAMES said the committee will carry it over until February 2,           
 1995.                                                                         
 HSTA - 01/24/95                                                               
 Number 693                                                                    
                                                                               
 HB 42 - ABSENTEE VOTING BY FAX                                              
                                                                               
 REPRESENTATIVE MARTIN presented HB 42, regarding absentee voting by           
 fax.  He said it is important for Alaska to get up to date with the           
 concept of encouraging more people and making it possible for them            
 to vote in the process of elections.  We have more people per                 
 capita in any given day and any given week, having to travel within           
 the state, much less outside.  We learned through the Gulf War how            
 easy it would be for Alaska citizens to vote by fax.                          
                                                                               
 TAPE 95-2, SIDE A                                                             
 Number 000                                                                    
                                                                               
 REPRESENTATIVE MARTIN said they had to change the word even though            
 it is called the "Fax Bill" and we are now talking about electronic           
 media, because there are other ways of getting the message through            
 to request information.  So, the latest bill, over the last two               
 years, has changed the word "fax" to use the word "electronic                 
 transmission."  It will allow the division of elections to use                
 whatever is modern and available.  The whole purpose of this bill             
 is to encourage more participation in the voting process.  It is              
 estimated that maybe 20 percent of the people decide to vote in the           
 last week, because they had to leave their district.  By faxing,              
 they can request an absentee ballot.                                          
                                                                               
 Number 110                                                                    
                                                                               
 REPRESENTATIVE PORTER commented that the amendment seems to                   
 eliminate on page 2, section C, "promptly after receiving absentee            
 ballot that has been complete and returned under this section, the            
 director shall acknowledge receipt of the completed ballot by                 
 electronic transmission to the voter."  This would say the division           
 does not have to notify the voter that his fax was received.  He              
 wondered if that was the intent.                                              
                                                                               
 REPRESENTATIVE MARTIN said that it eliminates the voting.                     
                                                                               
 REPRESENTATIVE GREEN commented that it only eliminates the fact               
 that it has been received.  Basically, what the division needs, but           
 he just hoped to open it up and use electronic means for voting.              
                                                                               
 Number 135                                                                    
                                                                               
 DAVID KOIVUNIEMI, ACTING DIRECTOR OF ELECTIONS, stated first that             
 they have taken a neutral stand on this bill.  They are leaving it            
 up to the legislature.  Regarding Representative Porter's question            
 regarding the request to remove the notification of a received fax,           
 it was simply economic.  He did not have a fiscal note, but he has            
 been in contact with Representative Martin's office to determine              
 the costs.  What the fiscal note is will be dictated by what is               
 included or excluded in this bill.  The cost of faxing to Japan is            
 $2.04; to Saudi Arabia, $3.66; to Germany, $1.04.  If they receive            
 an application by mail soon enough, they send a postcard to                   
 acknowledge receipt of an absentee application.  In 1992, they sent           
 10,212 absentee ballots for the primary and 36,588 for the general            
 election.  If they sent them priority mail it would have come to              
 $140,000.  First class mail is $14,976.  He said that priority                
 mail, at the present rate, is ten times more and there isn't much             
 better service.                                                               
                                                                               
 CHAIR JAMES said she received a number of complaints from her                 
 district about the length of time it took for them to get their               
 ballots back.  Mail may have been the problem.  Faxes could be a              
 solution.  There was a problem about how to inform the voters if              
 their ballot was counted.                                                     
                                                                               
 MR. KOIVUNIEMI said the Administration procedures will account for            
 all ballots by number.                                                        
                                                                               
 CHAIR JAMES said to put the onus on the voter to mail the ballot              
 after faxing.   More people will be able to vote, so there will be            
 an increase in postage.                                                       
                                                                               
 Number 311                                                                    
                                                                               
 REPRESENTATIVE GREEN asked how to safeguard against fraud.                    
                                                                               
 MR. KOIVUNIEMI said there is no method of guaranteeing anything,              
 but the Administration will require voters to fill out a ballot and           
 require information on the envelope, just like they do now.  There            
 will still be a witnessing requirement on a separate form.  If                
 there is a challenge, they can go back to check signatures and                
 compare the registration and sworn statement.  There are some                 
 things they cannot control.  Mr. Koivuniemi said he would provide             
 a fiscal note.                                                                
                                                                               
 Number 375                                                                    
                                                                               
 STAN RINGMAN, LEGISLATIVE AIDE, REPRESENTATIVE OGAN, wished to add            
 a comment about mailing.  He said that priority mail is a postal              
 service marketing gimmick.  What you are buying is two pounds of              
 first class mail service.  It receives no different handling than             
 first Class mail service.  You are only buying more than you need,            
 generally, if you are under two pounds.  It would be a good way to            
 save the state some money.  There would be no difference in service           
 to the absentee voters.                                                       
                                                                               
 Number 399                                                                    
                                                                               
 MR. CHENOWETH, testified that this bill does not apply to municipal           
 elections or to Rural Education Administrative Area (REAA)                    
 elections.  This bill does not apply to things committed from this            
 list.  If there is a need for this kind of faxing in conjunction              
 with those elections, it needs to be built into the bill.  Special            
 federal elections are not embraced in this bill either.  Another              
 thing, for the record, is based on a Montana rule.  In judiciary              
 the right of privacy came up.  Article 5, Section 3 deals with                
 right of secrecy, picked up from the Hawaii constitution.  Language           
 draws from there.                                                             
                                                                               
 Number 493                                                                    
                                                                               
 REPRESENTATIVE MARTIN said that during the Gulf War, the Department           
 of Defense was also concerned about confidentiality.  Since then              
 the Supreme Court and U.S. Justice Department have ruled that the             
 confidentiality should not be of concern when a person may be                 
 denied the right to vote.                                                     
                                                                               
 Number 520                                                                    
                                                                               
 CHAIR JAMES asked if anyone would be interested in submitting this            
 amendment to this bill.                                                       
                                                                               
 REPRESENTATIVE ROBINSON moved to accept the amendment brought                 
 forward, which is:  Page 2, lines 14 through 16, that we delete all           
 materials.  Second would be page 3, line 11, that we delete                   
 "priority mail" and insert "the most expeditious mail service."  On           
 page 3, line 15 through 16, delete the "most expeditious mail                 
 service" and insert "the."                                                    
                                                                               
 CHAIR JAMES asked if there was any objection.  There being no                 
 objection, the amendment to HB 42 was passed.                                 
                                                                               
 REPRESENTATIVE PORTER asked a question regarding Section III, page            
 2, about the days for receiving absentee ballots.  If they are                
 mailed they must be received seven days before; if they're faxed              
 they must be received four days before. If they're mailed they must           
 provide for the allowance of simultaneous registration.                       
                                                                               
 MR. KOIVUNIEMI said this bill does not tinker with the thirty-day             
 registration requirement.                                                     
                                                                               
 Number 608                                                                    
                                                                               
 REPRESENTATIVE GREEN moved and asked unanimous consent that HB 42             
 move out of committee.                                                        
                                                                               
 There being no objection, the bill was moved.  CHAIR JAMES said               
 they will do a committee substitute.                                          
 HSTA - 01/24/95                                                               
 Number 620                                                                    
                                                                               
 HB 70 - END PERMANENT FUND DIVIDEND HOLD HARMLESS                           
                                                                               
 CHAIR JAMES said she would like to go on to HB 70 briefly and get             
 the sponsor statement so she could carry it over to the next                  
 meeting date.                                                                 
                                                                               
 REPRESENTATIVE PETE KOTT, SPONSOR OF HB 70, testified that this               
 measure would add a few dollars to the permanent fund dividend                
 check.  At the present time, a recipient of welfare who receives a            
 Permanent fund dividend (PFD), fails to qualify for continued                 
 welfare benefits and depending on the circumstance, the                       
 disqualification could last up to four months.  Generally, it is              
 one month.  Welfare benefits are then made to the individual, under           
 what is known as the hold-harmless program.  That program is funded           
 by deducting that amount necessary for the welfare benefits from              
 everyone else's PFD check.  This year it was in the excess of $41.            
 The amount has grown of the years - it started off at a little over           
 $6.  Over the course of time, the entire program has cost every               
 other Alaskan about $240.  The Department of Health and Social                
 Services has eight full-time employees that administer this                   
 particular program.  HB 70 would eliminate this hold-harmless                 
 program.  It would mean that PFD checks would be treated as                   
 ordinary income for purposes of determining welfare eligibility,              
 and this is the same way that income is treated by the Internal               
 Revenue Service.  It also means that PFD recipients would not                 
 continue to fund a program that allows individuals to receive that            
 money while they are still on welfare.  Representative Kott's                 
 belief is that it is a step self-sufficiency, and accomplishing               
 welfare reform.  There is no fiscal note associated with it.  They            
 do not know what the fiscal ramifications would be.  All they know            
 is that there are about eight individuals who work toward this                
 particular end in the Department of Health & Social Services.                 
                                                                               
 CHAIR JAMES asked for questions, and the committee agreed to                  
 reserve questions for a later period.   She said the bill will be             
 held over to Thursday, January 31, 1995.                                      
 ADJOURNMENT                                                                   
                                                                               
 CHAIR JAMES adjourned the meeting at 10:25 a.m.                               
                                                                               
                                                                               

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