HB 284-PFD ALLOWABLE ABSENCE: FELLOWSHIPS    1:40:23 PM CHAIR DAVIS announced consideration of HB 284. [Before the committee was CSHB 284(FIN).] REPRESENTATIVE HAWKER, prime sponsor, presented HB 284, which resulted from constituent contacts in his and in Representative Beth Kerttula's districts. The original intent of the Permanent Fund Dividend (PFD) language was that it would be only for resident Alaskans, questions quickly arose about the fairness of that to certain Alaskans, specifically students who had embarked upon a university education outside of the state. In response, the legislature passed the "exception to the absence" statutes, saying that a person might be absent from Alaska for specific purposes and still receive a dividend. The very first exception created was for students receiving secondary or post-secondary education on a full-time basis; but in the process of writing regulations interpreting that statute, an inequity was created. While the exception included students outside of Alaska pursuing a secondary or postsecondary education on a full-time basis, the regulators interpreted that to mean that students traveling abroad on the prestigious Fulbright Scholarship did not qualify. REPRESENTATIVE HAWKER said the Fulbright program was created in 1946 in the aftermath of World War II specifically to foster better understanding among peoples of nations. A student who was awarded a Fulbright Scholarship was allowed to sit in a reserved seat at a foreign university and participate fully in the courses, but did not have to enroll. The [PFD] regulations stated that, in order to qualify for the out of state student exemption, one had to be "enrolled". REPRESENTATIVE HAWKER said that they had worked with the Department of Revenue, Permanent Fund Division, to find a remedy by amending the regulations. Both sides became frustrated with the legal quagmire of that attempt however, so they hoped to correct it in statute. This bill added language so a person would have an allowable absence if he/she was participating for educational purposes in a student fellowship sponsored by the United States Department of Education or the United States Department of State. SENATOR COWDERY asked whether members of the military serving outside the state qualified to receive a dividend. REPRESENTATIVE HAWKER responded "absolutely" that they needed only to have the intent to return to Alaska [after their tour of duty]. SENATOR COWDERY asked how the Permanent Fund interpreted the status of people serving in the Peace Corps and asked if there were representatives of the Permanent Fund available to speak to that. REPRESENTATIVE HAWKER answered yes, they did have representatives of the Permanent Fund Dividend Division on hand; but he noted that language expanding the allowable absences to Peace Corps volunteers was included a year ago as the 14th exception to the residency requirements. SENATOR ELTON asked if it would be appropriate to bring an amendment while the sponsor was at the table. CHAIR DAVIS asked Senator Elton if he would mind waiting until she had heard testimony on the bill. SENATOR DYSON encouraged Chair Davis to allow Senator Elton to announce what his amendment would do so that people could comment on that as well. SENATOR ELTON explained that this amendment would extend to Vista Volunteers the same exception under the law as had been extended to the Peace Corps, people working in the maritime industry and others. 1:49:54 PM DEMIAN ASA SCHANE, representing himself from Juneau, said he had provided written testimony but wanted to put a face to that testimony. He went to Iceland the previous year on a Fulbright exchange. There he developed a program he felt would be of interest to both Iceland and Alaska; he studied the policies and regulations behind preventing escapes of farmed fish in fishing operations, which he knew was an important issue here. SENATOR DYSON said he assumed Mr. Schane was in favor of the bill. MR. SCHANE answered that he was, and that he appreciated the efforts of Representative Hawker and Miss Debbie Richter in getting this done. 1:51:30 PM DEBBIE RICHTER, Director, Permanent Fund Dividend Division, Department of Revenue came forward to answer questions. SENATOR DYSON complemented Ms. Richter on the job she does and asked if she could speak to the potential dangers of continuing to expand the exceptions. MS. RICHTER responded that as more allowable absences were introduced, the division's workload increased. She said they were advised by counsel that to enlarge the list of allowable absences was OK to a certain point; but beyond that point it became difficult to qualify or disqualify people for eligibility. The question that needed to be asked when adding an exception was whether it could be defined clearly enough to support fair eligibility determinations. SENATOR DYSON asked if Representative Hawker's exception was sufficiently easy to define. MS. RICHTER answered that it was. SENATOR DYSON opined that a talented college athlete who took a year sabbatical from his studies to train for a world competition would not qualify because the existing law specified that the absence must be for education. MS. RICHTER agreed. SENATOR DYSON asked Ms. Richter what the legal guys had told her about how to know when they were reaching that precipice. SENATOR COWDERY asked how the number of checks issued compared to the current population of the state. MS. RICHTER answered that they had sent out 632,000 PFD checks, approximately 10,000 of them to people who did not reside in the state at that time. SENATOR COWDERY asked if felons were eligible. MS. RICHTER answered "No." During the year they were sentenced or incarcerated they were not eligible; after that they were. SENATOR COWDERY asked if there was a citizenship requirement. MS. RICHTER said a person must have filed for citizenship in order to qualify. ROBB M. KULIN, Anchorage, said he was a former Fulbright scholar to Italy and a strong proponent of the bill. CHAIR DAVIS asked if the sponsor of the bill would like to speak to Senator Elton's amendment. SENATOR THOMAS moved amendment 1. CHAIR DAVIS objected for discussion purposes. REPRESENTATIVE HAWKER said he had seen this amendment before. It would add an exemption unrelated to the education exemptions currently in the bill, exempting persons serving as volunteers under the National Community Service Trust Act of 1993, generically referred to as AmeriCorps. He explained that the Peace Corps was for foreign service and the federal government established AmeriCorps for domestic service. Representative Hawker resisted this amendment for 2 very pragmatic reasons that did not imply any comment on the value and importance of the AmeriCorps program. First, every exception to the residency statutes was very controversial. Many legislators, and he included himself in that number, resisted adding to the reasons one could be out of the state; the PFD was meant for in-state residents. That controversy did not touch the exemption for Fulbright scholars, but adding an exemption for the AmeriCorps program could make it difficult to correct the inequity they were attempting to correct with this bill. Second, the VISA program had been discussed previously as a possible exception to the residency requirements in the context of bringing the Peace Corps exception into statute. At that time, the consensus was that while the Peace Corps was a foreign service operation and easy to define, VISTA volunteers could serve anywhere in the United states and indeed there were VISTA volunteers from other states working in Alaska. They might actually be creating conflicting objectives if the idea was to encourage young Alaskans to stay and help in Alaska, but they were incentivized to go work in other states through the maintenance of the Permanent Fund Dividend. He conceded that it was a policy call, but respectfully asked the committee to leave this bill as it was, righting a wrong in what was clearly the intent of the statutes, and bring the VISTA Volunteer exception forward as its own proposition. CHAIR DAVIS set HB 284 aside until Senator Elton returned. HB 284-PFD ALLOWABLE ABSENCE: FELLOWSHIPS  2:21:54 PM CHAIR DAVIS announced the committee would again hear HB 284. SENATOR ELTON moved to adopt Amendment 1. CHAIR DAVIS objected. SENATOR ELTON explained that this amendment would change the title of the bill to include participation in AmeriCorps programs as an allowable absence. The substance of the change in the bill was on page 3, line 2, following 17, inserting "serving as a volunteer under the National Community Service Trust Act of 1993, AmeriCorps." Speaking to the bill, he said that he thought he was responsible for one of the exceptions that allowed Alaskans who have to leave the state to tend for a terminally ill family member to receive a PFD. He recognized that they had to be careful as they added exceptions, not to provide a "Christmas tree" atmosphere in which one good idea was met by a second and a third etc; but he suggested that since this was the last committee of referral that would not happen. He felt members of the AmeriCorps should be extended the same courtesy as had been extended to those volunteering for the Peace Corps. CHAIR DAVIS asked the bill sponsor to speak to Senator Elton's amendment. REPRESENTATIVE HAWKER explained to Senator Elton that he had 2 resistances to including this amendment in the bill. One was perfectly pragmatic, in that he believed it increased the likelihood the bill would fail in that session. The substance of the bill as it existed, limited only to clarifying a regulatory inconsistency, was something that would be universally well- received by the bodies. Any exception clauses, no matter how meritorious, always created great controversy, so he was advocating strongly against introducing any element of discord. Secondly, they researched the history of the Peace Corps amendment and found that the VISTA program was discussed during testimony on that amendment. It was not adopted at that time because the legislative consensus was, since VISA volunteers serve domestically including in Alaska, it made more sense to incentivize those volunteers to stay and work in Alaska. They felt the difference between this and the Peace Corps was that Peace Corps service was not available in the state. 2:28:28 PM He continued to say that the rationale was very consistent with the second existing exception, which allowed persons "(2) receiving vocational, professional, or other specific education on a full-time basis for which, as determined by the Alaska Commission on Postsecondary Education, a comparable program is not reasonably available in the state;" to continue to receive a PFD. REPRESENTATIVE HAWKER summarized by saying that he saw merit to the VISTA provision, but felt that it should be brought forward as a separate, stand-alone provision. CHAIR DAVIS stated that this amendment had failed in 2 other committees; she supported the amendment but was afraid its inclusion would cause the bill not to pass. SENATOR ELTON said he did not disagree on the substance. His preference would be to add this [exception] and subtract 3 or 4 more, because he did not understand some of the priorities in that list of exceptions. For example, he did not understand why a person working as a staffer to one of our congressional delegates should get a dividend without, perhaps, ever having stepped foot in Alaska. He did not understand why someone who committed to volunteerism should be kept out of the dividend system while a person working as a mariner in the merchant marine did qualify. To the sponsor's point that they wanted to encourage Alaskans working in Alaska, it was a good argument, but not one that compelled a previous legislature promoting volunteerism in foreign countries. He stressed that he was not unsympathetic to any of the arguments he had heard against this, and perhaps this amendment could have been coupled with removal of a couple of amendments that were already in law; but he decided that was a sure way to kill it. A roll call vote was taken on Amendment 1. Senators Elton and Thomas voted yea and Senators Cowdery, Dyson and Davis voted nay. Therefore, Amendment 1 failed 2 to 3. 2:34:52 PM SENATOR ELTON moved to report CSHB 284 from the committee with individual recommendations and attached fiscal note(s). There being no objection, CSHB 284(FIN) moved from committee.