CS FOR HOUSE BILL NO. 536(MLV) "An Act relating to applications for permanent fund dividends by certain individuals serving in the armed forces, and to payment of certain 2003 and 2004 dividends; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Wilken commented that this bill, version 23-LS1796\C, is sponsored by the House Rules Committee, at the request of the Special Committee on Economic Development. He stated that this bill "would allow members of the armed services who received hostile fire and imminent danger pay during the FY 03 and FY 04 application period an extension to their 90-day application period." He noted that a zero fiscal note accompanies the bill from the Department of Revenue. JON BITTNER, Staff to Representative Cheryll Heinze, the Chair of the Special Committee on Economic Development, stated that this legislation would basically provide members of the armed forces who "are in war zone situations" an extension on their Permanent Fund Dividend (PFD) application period. Continuing, he noted that the legislation was developed at the request of the PFD Division, Department of Revenue, after they received appeal letters from Alaska military personnel who served in war in Iraq during the FY 03 and FY 04 PFD application periods. He stated that due to inoperable communication systems these people were unable to access or remit their PFD applications. Therefore, he stated, this bill would provide military personnel a 90-day extension, once they are out of a war zone situation and in an area that would provide them the ability to access and submit required PFD paperwork. He noted that the bill contains retroactive language that would allow those "who served in the last Iraqi and Afghanistan war" to file for their PFD dividends. Mr. Bittner stated that the bill would also allow the Commissioner of the Department of Revenue to further accommodate the filings of war zone military personnel who were unable to file, due to war related injuries, within the specified 90-day period once they recovered and were able to provide proof of reasonable cause. Senator Olson asked the number of applications that might be pending. Mr. Bittner replied that, while Alaska has approximately 14,000 active armed service members, the number who might qualify under this legislation, is undetermined. He noted that the PFD Division does not currently analyze whether pending military applications were war-zone related. Senator Hoffman asked therefore whether the PDF Division would seek out these individuals or whether it would be incumbent for the applicant to notify the Division, were this legislation adopted. Mr. Bittner responded that the Division would notify those Alaskans to whom this legislation would apply. Senator Hoffman, noting that the annual dividend formula calculation is determined by the total number of applications received, asked the funding source for the additional dollars that would be required for these applicants. Mr. Bittner responded that the PFD Division director has indicated that this would not be "a problem" as the number of qualifying applicants is expected to be minimal. Senator Hoffman continued his questioning, as he noted, while the Permanent Fund consists of millions of dollars, these applicants would not have been factored into the dividend amount formula. Mr. Bittner deferred to the Division to provide the answer. SHARON BARTON, Director, Permanent Fund Dividend Division, Department of Revenue, testified via teleconference from an offnet site, and informed the Committee that the Division would calculate the number of active duty personnel who might qualify under this legislation. This projection, she stated, would then be factored into the following year's dividend formula "and held in reserve in the Permanent Fund Dividend Fund." She noted that reserves have already been set aside pending additional information. Senator Hoffman inquired as to where the funds to support FY 03 dividend payments would be derived. Ms. Barton responded that the Division has "a rough projection," and that reserves have already been established. She assured the Committee that the numbers would not be so many as to "cause a problem." Senator Bunde moved to report the bill from Committee with individual recommendations and accompanying fiscal notes. There being no objection, CS HB 536(MLV) was REPORTED from Committee with zero fiscal note #2, dated May 6, 2004, from the Department of Revenue.