HOUSE BILL NO. 205 An Act relating to service in the peace corps as an allowable absence from the state for purposes of eligibility for permanent fund dividends and to the period for filing an application for a permanent fund dividend; authorizing the Department of Revenue to issue administrative orders imposing sanctions for certain misrepresentations or other actions concerning eligibility for a permanent fund dividend and providing for administrative appeal of those orders; and providing for an effective date. REPRESENTATIVE LESIL MCGUIRE, Sponsor, provided information on the bill. She noted that similar legislation had been passed out of the House in the last session, but it was not acted upon in the Senate. She explained that in 1982 a list of exemptions were put in place for the Permanent Fund Dividend to recognize that there were true Alaskans that live in and contribute to the State but were forced to be out of the State for limited time periods. She noted that the exemptions were very narrow. She pointed out that for sixteen years Peace Corps volunteers had been given exemptions, added along with the military, since they were in a competitive national program to serve the country. She recalled that the bill had received a wide array of public testimony during its hearing in the House Finance Committee in the last legislature. She emphasized that Peace Corps volunteers received only a small living stipend, and maintained that the dividend made a significant impact on their livelihood. She noted that volunteers could not have any debts, other than student loans. She maintained that the bill recalled the initial intent of 1982. She stated that in 1998, Peace Corps volunteers were removed from the list of exemptions. She maintained that this was a politically motivated action based on biases. She contended that volunteers come from a wide variety of backgrounds and did not represent any one political viewpoint. Representative McGuire proposed that this time in history called for more volunteerism in third world countries. She discussed the skills and services provided by Peace Corps volunteers, which she maintained were equal to the importance of service provided by military personnel. She also pointed out services, such as teaching, provided to the state of Alaska by Peace Corps volunteers when they returned to the state at a rate of roughly 82 percent. She emphasized that these volunteers had been a part of the original list of exemptions. She pointed out that there were on average 32 volunteers per year, which would impact dividend payments by about 3 cents. Representative McGuire also pointed out the real problem of dividend fraud. She stated that although it resulted in a loss of thousands of dollars each year, fraud was not prosecuted since it required a costly jury trial. She noted that Section 4 of the bill established an administrative penalty for dividend fraud. She explained that in the House State Affairs Committee discussion had occurred, which resulted in the implementation of a $3,000 penalty level. Rules of case law require a jury trial once administrative penalties reach a certain threshold. In addition to the penalty, those found guilty of fraud will be denied a permanent fund dividend for five years. She suggested that to impose penalties for fraud would provide a needed deterrent. She concluded that the bill provided a dividend for true Alaskans who participate in a national program, and a penalty for fraudulent applicants. TRACY TOWNSEND, ANCHORAGE, testified via teleconference in support of the bill. As a former peace corps volunteer, he indicated that the bill would encourage peace corps volunteers to return to Alaska. BRIAN BRUBAKER, ANCHORAGE, testified via teleconference in support of the bill. He referred to friends who were volunteers. Representative Foster MOVED to report HB 205 out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTIONS, it was so ordered. HB 205 was REPORTED out of Committee with a "do pass" recommendation and one new zero fiscal note from the Department of Revenue.