4/5/95 HB 4 PERMANENT FUND DIVIDEND ELIGIBILITY  CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to order at 1:38 p.m. The first order of business before the committee was CSHB 4 (STA) title am, sponsored by Representative Kott. ROD MOURANT, legislative aide to the sponsor of HB 4, explained the measure as follows. CSHB 4(STA) title am reinstates a previous policy allowing the spouses who accompany residents out of state for allowable absences to be eligible to receive a permanent fund dividend while out of state. The spouse must also qualify as an Alaska resident prior to leaving the state. This policy was changed as the result of the Zyler vs. the State of Alaska case in 1993. In 1992, 25 individuals were denied permanent fund dividends under the changed policy, in 1993, 200 individuals were denied, and in 1994 approximately 1300 individuals were denied. Allowable absences include college and vocational training, medical treatment, and military duty. The bill allows for the retroactive payment of the cases denied as a result of the Zyler case. The administrative cost estimated by the Department of Revenue is $600 to process the appeals files. Number 067 SENATOR ADAMS asked how an applicant would comply with the language, "maintains and demonstrates at all times an intent," on page 3, lines 10-11. He asked if proof of voter registration would fulfill that requirement. MR. MOURANT responded voter registration by itself is not a sole indicator of residency of any state. He clarified that intent to return to Alaska is already in regulation; the bill would place that requirement in statute. Number 097 SENATOR ADAMS asked what the cost of paying the permanent fund dividends, denied since 1992 because of the Zyler case, would be. He commented there are times when in-state residents have been denied permanent fund dividends because they missed the filing deadline by one or two days. He suggested those people also be allowed to re-apply. MR. MOURANT was unable to provide the information but offered to calculate those costs. SENATOR TAYLOR noted the fiscal impact would be on the Permanent Fund, not the General Fund. MR. MOURANT stated the Permanent Fund Division has adequate funds to cover the retroactive payments. Number 120 SENATOR TAYLOR shared Senator Adams' concern about other people who are denied their dividends unfairly and about the department's system of acknowledging receipt of the applications. He suggested creating a hearing board to review such cases. He commented the department appears to go to extraordinary efforts to make sure certain people do not get their dividends, especially military spouses. SENATOR TAYLOR also commented the objective standards for allowable absences has been deleted in Section 3. MR. MOURANT explained that at the department's request, the allowable absence section of statute was renumbered and restructured and appears in Section 2. Number 164 MIKE McGEE, Chief of Permanent Fund Dividend Operations, stated the department supports CSHB 4(STA) title am. He clarified the allowable absences that the bill is designed to reinstate were established in 1982, but were excluded because of the Zyler case. The changes on page 3, section 3, separate the residency definition from allowable absences, as that is part of the conflict in the Zyler case. Regarding the receipt of application issue discussed by Senator Taylor, Mr. McGee noted the applicant is sent a receipt card to verify receipt of the application. The department has announced that applicants who do not receive the receipt card by April 15 should notify the department. SENATOR TAYLOR stated the problem is that the department does not know who did not apply therefore does not know who to notify. MR. McGEE indicated if an applicant determines they did not receive a receipt card after the filing deadline, but have certain proofs that they filed, they can request to reapply until September. Number 200 SENATOR ADAMS asked for the department's interpretation of Section 3, lines 10-11. MR. McGEE replied that language defines a state resident in conjunction with AS 01.10.055. SENATOR ADAMS asked whether the bill requires a resident to be a registered voter. MR. McGEE responded a person does not have to be a registered voter to be a resident. SENATOR ADAMS asked if the spouse of an applicant in the military in North Carolina could be a registered voter in North Carolina, and still qualify for a permanent fund dividend. MR. McGEE clarified if an applicant files from outside the state, that person must fill out a supplemental schedule which requires the disclosure of actions that may be inconsistent with being a resident. If a person registers to vote in another state, thereby declaring residency in another state, that person would become ineligible for a permanent fund dividend. Number 236 SENATOR ADAMS noted the filing deadline keeps changing and asked how many Alaskans, from rural or urban communities, have missed the filing deadline. MR. McGEE estimated there are 2100 unsolicited late file applications per year. SENATOR ADAMS felt those applicants should be accounted for in this bill. SENATOR ADAMS asked what the total cost of paying the retroactive dividends specified in CSHB 4 (STA) title am would be if the bill passes. MR. McGEE replied the amount would differ each year. MR. McGee asserted this bill corrects a conflict between the statutes and regulations, determined by a court decision. The issue of filing deadlines is a different one. Number 274 SENATOR MILLER referred to Section 3, and stated although he agrees with what the bill does, statute should not follow regulations; and Section 3 does just that. MR. McGEE noted AS 01.10.055 contains that language. SENATOR MILLER commented different statutes pertain to residency. Number 294 SENATOR ELLIS asked if the Permanent Fund Division investigates applicants to determine if they are registered to vote outside of Alaska. MR. McGEE replied the Permanent Fund Division is able to match records with the Department of Defense and among state agencies, however it would not be practical to match records with other states. They do verify information on a case-by-case basis, if an applicant appeals a denial. SENATOR ELLIS asked about the fiscal impact of the retroactive payments made under CSHB 4(STA) title am on future dividends. MR. McGEE indicated there are only a few individuals that would be served by the retroactive clause, and that cost would not have any impact on future dividends because there is enough money in the fund now from overestimates based on the projected number of eligible individuals for those years. SENATOR ELLIS requested information from the division on the exact number of applicants affected by the retroactivity clause, and the cost of those payments. Number 339 SENATOR MILLER questioned if spouses of college students are the largest group that have been denied, and spouses of military personnel are the second largest. MR. McGEE replied affirmatively, and clarified there are 677 spouses of college students, and 292 military spouses that have been denied. SENATOR ADAMS asked about the effect of Section 6. MR. McGEE stated that is to make the provisions in the bill consistent in statute, during the years applicants were denied because of the court decision. SENATOR ADAMS noted he wanted to review the possibility of including late filers in the bill. Senator Taylor announced the bill would be held over.