SB 117-PFD ALLOWABLE ABSENCE: MILITARY  9:03:05 AM CHAIR WIELECHOWSKI announced the first order of business would be SB 117. This bill would enable Alaskans who join the military and are deployed out of state to continue receiving Permanent Fund Dividend checks while serving in the armed forces. Currently long-term Alaskans who have every intention of returning to the state are denied their PFDs after ten years. CHAIR WIELECHOWSKI asked for a motion to adopt the proposed, version M, committee substitute (CS). SENATOR PASKVAN moved to adopt the proposed CS for SB 117, labeled 27-LS0768\M, as the working document. CHAIR WIELECHOWSKI objected for discussion purposes and asked his staff to provide an overview of the bill. 9:04:13 AM MICHAEL CAULFIELD, Staff to Senator Wielechowski, said that as any Alaskan knows, one of the great benefits of living in the state is the yearly PFD payment. Most would agree that the PFD should not be withheld from those with a legitimate reason to be gone from the state with every intention of returning. Thus, the state has exemptions for residents absent for reasons like school, medical treatment, or military service. These exemptions have a sunset date of ten years, as most people gone for that long do not intend to return to Alaska. However, some jobs require people to be gone from the state for longer than 10 years. One of them is congressional service. Alaska's congressional delegation has to live in Washington D.C. and the statutes allow for them to receive PFDs past that ten-year limit. Another job where Alaskans may not be able to return home for long periods of time is the military. Members of the armed forces can't choose where to be stationed, and if they make a career of the military they may be gone for over ten years. These brave men and women make great sacrifices to protect us all, and the least we can do is to make sure they still receive their PFDs. Senate Bill 117 will provide an exemption for Alaskan soldiers who are gone for over ten years, just like our congressional delegation. MR. CAULFIELD then reviewed the changes in the CS. On page 2, lines 1-5 require that the soldier receiving the PFD was actually in the state for three years prior to joining the military, unless gone for an allowable reason. Lines 6-11 provide a severability clause. 9:06:07 AM CHAIR WIELECHOWSKI noted there is a legal opinion on the constitutionality of the bill. DEBORAH BITNEY, Director, Permanent Fund Dividend Division, Department of Revenue (DOR), said she was available for questions. CHAIR WIELECHOWSKI said he has had several constituents raise this issue with him. Alaskans who are deployed for long periods of time have problems getting their PFD checks. 9:07:39 AM SENATOR KOOKESH joined the meeting. CHAIR WIELECHOWSKI asked how many complaints he's heard. MS. BITNEY answered probably less than 30, but they were extremely loud. SENATOR GIESSEL asked if most were related to military service. MS. BITNEY answered yes, all were from military members. Most people who are gone from the state for that length of time are military. SENATOR GIESSEL asked if Ms. Bitney had any information about people within the military who are absent more than 10 years and who do return to become permanent residents. MS. BITNEY answered they are researching this question. Her initial findings were that 78 people this year reside in Alaska and at some point since 1990 had 10 years or more of absences, and at least one of those years was for military purposes. She said being more specific would require more research. 9:10:20 AM CHRIS POAG, Assistant Attorney General, Department of Law (DOL), PFD Division, said there is a constitutional concern with this bill. There's risk of an unequal protection challenge when a class of residents is broken into new residents and long-term residents. In Sands v. Roe, which involved welfare benefits for California residents, new residents for the first year would receive benefits from the state of origin, not from California. The court said it was unconstitutional to create two classes of residents and distribute benefits unequally. An argument could be made that this bill does something along those lines. PFD allowable absences include up to 180 days so long as the intent to return is maintained. There are 16 special exceptions allowing for absences in excess of 180 days. There has to be some limit, so the legislature imposed a ten year cap on allowable absences. It also created an exemption for members of Congress, their staff, and spouses. 9:14:12 AM After ten years of service or longer, they are likely to return. This bill would create another exemption but splits military allowable absences into two classes. This raises a risk of a challenge similar to Zobel. DOL believes that the legislature sees this as a category of people who are likely to return to the state. DOL would support a lawsuit if the law were to be challenged. Mr. Poag warned that if there is a constitutional challenge, the legislature should make clear that it doesn't want the ten-year rule to go away. CHAIR WIELECHOWSKI opened public testimony. TIKOT CROFOOT said he originally left Alaska to attend the Naval Academy and has been an active duty SEAL for ten years. He is currently preparing for another deployment to Afghanistan. Two years ago he was denied his PDF, and has been denied ever since. He believes that service members and their families are no less deserving than our congressional delegation. The PFD does penalize Alaska service members. MR. CROFOOT said he lived in Alaska since age four, had unbroken Alaska residency for 28 years, has voted in all elections and has an Alaska driver's license. Alaska is listed as his home of record, so the military will pay for him to return to Alaska when he leaves the service, but not to another state. Both his parents have been Alaskan residents since 1974. He owns property in Alaska, and is part owner of a family business in Alaska. He met all PFD requirements for eligibility prior to military service. He met the requirements for his first ten years of military service. Military members deserve the dividend even if they are outside the state. 9:20:55 AM MR. CROFOOT said he has heard people say that military members are trying to milk the system by trying to receive the dividend when they have resided in Alaska for very little time. It actually costs him more to return to Alaska each year than he receives from the dividend. He returns because Alaska is his home. He urged the committee to support career military members who intend to return to the state. 9:22:04 AM CHAIR WIELECHOWSKI said Mr. Crofoot was a big reason why the bill was brought forward. SENATOR PASKVAN asked when he expected to retire. MR. CROFOOT said he will be eligible after 20 years, but regardless of when he retires, he will return to Alaska. 9:23:27 AM TRACY ROSS said she was calling on behalf of her husband, Lt. Colonel Brian Ross, who deployed to the Philippines and is currently stationed in Okinawa. Alaskan residents who are career military deserve equal protection under the law and should be allowed to receive PFDs despite extended absence. Brian was born in Alaska in 1972, and left in 1990 to attend the Naval Academy. For the last 18 years he has served around the world. He has always been registered to vote in Alaska. All his vehicles have been titled, registered, and licensed in Alaska. He has significant physical ties to Alaska; his parents and two brothers live in Alaska. He owns cabins and land near Glenallen. Their family has made dozens of trips to Alaska totaling over 80 days in the past five years. MS. ROSS said her husband was first denied a PFD in 2008. Nothing in his status had changed other than passing the arbitrary ten year cap. He has filed a superior court judicial review of his rejection. If he is not an Alaskan resident, then where is his home? His home of record and state of legal residence is the state the federal government expects him to return home to. His home of record is Alaska. In 20 years of military service he has never changed his home of record. Despite living in six states and one foreign country, he has always maintained paper and physical ties to Alaska. MS. ROSS said that her husband intends to return to Alaska to live permanently once he retires. Lifetime Alaskans and career military personnel should continue to receive PFDs. 9:29:23 AM RIC DAVIDGE, Anchorage, said he holds a number of leadership positions in veteran organizations in Alaska. The Alaska Veterans Political Action Committee and the Alaska Veteran's Foundation have been asking for changes to the PFD status, especially the ten year rule and the 72 hour rule because of the cost of returning Alaska to maintain resident status. Indications of intent to return should be considered. These people were Alaskans prior to service and intend to be upon their return. The bottom line is; why are there no exemptions for military service as opposed to members of Congress, their staff and spouses. At least, he said, recognize the service and commitment of service members who intend to return. His son spent four years active duty in Iraq as well as 8 years military service. A number of times he had to assist his son to return to Alaska for the 78 hour requirement. 9:32:10 AM LISA KIRSCH, Attorney, Legislative Legal Services, said she was available for questions. CHAIR WIELECHOWSKI asked her to talk about her legal analysis of the bill. MS. KIRSCH said she couldn't really add much to what Mr. Poag said. The crux of the problem is the three year residency requirement within the bill. This splits a class of residents into two groups, which creates an equal protection problem. 9:34:16 AM CHAIR WIELECHOWSKI said he did not intend to move the bill today; he wants to work through the constitutional issues. There was some very compelling testimony. Perhaps home of record could be included as an indication of eligibility. SENATOR GIESSEL asked if this would automatically make the military members' children eligible. 9:35:45 AM MS. BITNEY said yes, the children are eligible if the military member is the sponsor. CHAIR WIELECHOWSKI asked her to comment on the issue of "home of record." MS. BITNEY responded any declaration of residency other than Alaska automatically disqualifies the applicant. SENATOR PASKVAN asked if there has been any constitutional analysis of an exemption for those out of state while working for a private company. MS. BITNEY answered it would not be considered an allowable absence if someone was out of state for private employment purposes. SENATOR KOOKESH said the distinction is that military personnel are told where to live. MS. BITNEY answered that was essentially correct. 9:38:17 AM CHAIR WIELECHOWSKI closed public testimony and announced he would hold SB 117 in committee.