Legislature(2003 - 2004)

02/18/2003 08:02 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB  14-PERMANENT FUND ALLOWABLE ABSENCES                                                                                      
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE BILL NO. 14, "An Act  relating to an absence from the state                                                               
while  providing  care  for  a  terminally  ill  grandparent  for                                                               
purposes  of   determining  eligibility  for  a   permanent  fund                                                               
dividend; and providing for an effective date."                                                                                 
Number 1708                                                                                                                     
REPRESENTATIVE  HUGH  FATE,  Alaska  State  Legislature,  as  the                                                               
sponsor  of  HB  14,  explained that  for  years  permanent  fund                                                               
dividend (PFD) exemptions have been  granted for those who attend                                                               
to terminally ill members of  the family.  However, that language                                                               
failed to  include grandparents.  Therefore,  the definition [for                                                               
eligibility]   should   be   amended  such   that   it   includes                                                               
REPRESENTATIVE   BERKOWITZ  inquired   as   to   the  number   of                                                               
individuals that would be impacted by this.                                                                                     
REPRESENTATIVE FATE  answered that  he had no  idea.   In further                                                               
response   to  Representative   Berkowitz,  Representative   Fate                                                               
clarified that  he didn't believe this  legislation would include                                                               
step grandparents, although that could be [changed].                                                                            
REPRESENTATIVE  BERKOWITZ expressed  concern with  not specifying                                                               
retroactivity.   In response  to Chair  Weyhrauch, Representative                                                               
Berkowitz explained  that he is addressing  a procedural question                                                               
because the preferred  course is for legislation  to move through                                                               
the other  body unchanged so  that the legislation won't  have to                                                               
return to the House for adoption of changes from the other body.                                                                
REPRESENTATIVE   BERKOWITZ  returned   to  the   issue  of   step                                                               
grandparents  and suggested  moving  to a  broader definition  of                                                               
family  rather  than specifying  [to  which  family members  this                                                               
would apply].                                                                                                                   
Number 1972                                                                                                                     
CHAIR  WEYHRAUCH pointed  out  that an  individual  could have  a                                                               
terminal illness and years could  pass before the individual dies                                                               
from that illness.   He posed a situation in  which an individual                                                               
who leaves  the state to care  for a grandparent with  a terminal                                                               
illness  ends up  being gone  for five  years.   He asked  if the                                                               
relative  would need  to  obtain a  note  from the  grandparent's                                                               
physician  substantiating that  the  relative is  caring for  the                                                               
terminally  ill grandparent.   He  asked  how extended  illnesses                                                               
would be dealt with.                                                                                                            
REPRESENTATIVE FATE said it would  be up to the physician because                                                               
terminal  illness  and  terminal  disease  are  juxtaposed.    He                                                               
explained that there  are chronic diseases that  are terminal and                                                               
may last  over a  10-year period.   The  physician treats  such a                                                               
chronic disease  and thus it  isn't immediately  terminal because                                                               
there is a time line.                                                                                                           
CHAIR  WEYHRAUCH  asked whether  the  Department  of Revenue  has                                                               
adopted any regulations for paragraph (7).                                                                                      
REPRESENTATIVE FATE answered that he did not know.                                                                              
Number 2148                                                                                                                     
CHAIR  WEYHRAUCH   asked  if  Representative  Fate   intends  for                                                               
"terminally ill"  to be considered  a few  months or less  than a                                                               
REPRESENTATIVE  FATE  clarified  that  a terminal  illness  of  a                                                               
grandparent is no different than that  of any other member of the                                                               
family.   With  regard to  the step  grandparents, Representative                                                               
Fate  said that  perhaps  the language  should  be broadened  [to                                                               
include step grandparents].                                                                                                     
Number 2261                                                                                                                     
REPRESENTATIVE  SEATON asked  if  an entire  family would  remain                                                               
eligible for the  PFD in the situation in which  an entire family                                                               
moves out of state to care for a terminally ill grandparent.                                                                    
REPRESENTATIVE  FATE   emphasized  that   including  grandparents                                                               
wouldn't change  the regulations,  which cover  who can  care for                                                               
the terminally  ill individual.  This  legislation merely expands                                                               
that list  to allow an  individual to  care for a  terminally ill                                                               
REPRESENTATIVE SEATON  inquired as to the  current coverage under                                                               
the regulations.                                                                                                                
REPRESENTATIVE   BERKOWITZ  said   that   he   wants  a   broader                                                               
definition,  because under  Representative Seaton's  hypothetical                                                               
situation  children would  be taking  care of  great grandparents                                                               
and those [children] wouldn't be  covered [eligible for the PFD].                                                               
This addition  still wouldn't cover situations  in which children                                                               
take  care  of terminally  ill  great  aunts or  foster  parents.                                                               
Therefore, Representative  Berkowitz expressed  the need  to take                                                               
care when  defining "family."   If direct  sanguinity is  used in                                                               
defining  "family," then  lots of  people could  be left  out who                                                               
should be included.                                                                                                             
Number 1460                                                                                                                     
REPRESENTATIVE  GRUENBERG pointed  out that,  often, grandparents                                                               
end  up becoming  the  primary custodian  of  grandchildren.   He                                                               
posed a situation  in which a grandchild with  a terminal illness                                                               
may result  in a  grandparent moving  out of  state long  term to                                                               
care for the terminally ill grandchild.                                                                                         
REPRESENTATIVE FATE  informed the committee that  AS 43.23.008 in                                                               
part  specifies that  "an otherwise  eligible individual"  [would                                                               
remain qualified if  the individual was absent].   He pointed out                                                               
that  the Act  already specifies  a time  limitation of  220 days                                                               
[for an absence].                                                                                                               
REPRESENTATIVE SEATON referred  to page 2 [line 14]  and asked if                                                               
the 220-day limitation only applied to settling the estate.                                                                     
REPRESENTATIVE FATE said that the  220-day limitation only refers                                                               
to the settling of the estate.                                                                                                  
REPRESENTATIVE  DAHLSTROM asked  if stepparents  are included  in                                                               
the legislation as it stands.                                                                                                   
REPRESENTATIVE FATE replied no.                                                                                                 
CHAIR   WEYHRAUCH   specified  that   HB   14   would  only   add                                                               
REPRESENTATIVE  BERKOWITZ  inquired  as  to  why  paragraph  (14)                                                               
wouldn't  apply.    He  related that  some  of  his  constituents                                                               
regularly complain  that they aren't  given exemptions  for being                                                               
stationed in the Antarctic.                                                                                                     
Number 2689                                                                                                                     
PAUL  DICK, Acting  Director, Permanent  Fund Dividend  Division,                                                               
Department   of  Revenue,   explained  that   before  1988,   the                                                               
department  defined   absences  by  regulation.     In  1988  the                                                               
legislature defined  what absences  were allowable  under statute                                                               
for  purposes  of  maintaining  the PFD.    Therefore,  Mr.  Dick                                                               
characterized this as  a legislative prerogative.   He noted that                                                               
this statute was amended a few years ago.                                                                                       
REPRESENTATIVE  BERKOWITZ surmised  that there  is no  discretion                                                               
under paragraph (14), because  the legislature circumscribed that                                                               
discretion elsewhere.                                                                                                           
MR. DICK  clarified that it has  been left to the  legislature to                                                               
define the  terms of  the absences and  the terms  the additional                                                               
[reasons]  for  which individuals  can  be  absent.   In  further                                                               
response,  Mr.  Dick specified  that  those  terms are  under  AS                                                               
REPRESENTATIVE  BERKOWITZ  remarked  that  paragraph  (14)  is  a                                                               
catchall because  it says, "(14)  for any reason  consistent with                                                               
the individual's  intent to  remain a state  resident ...."   The                                                               
aforementioned  language  seems  to  provide  the  division  some                                                               
discretion in  considering someone  who might  not fit  under the                                                               
tight  [provisions in  statute].   He said  that the  legislature                                                               
can't  be expected  to enumerate  every  possible exception,  and                                                               
therefore those  enforcing the rules  should have  the discretion                                                               
necessary in this  area.  "If [paragraph] (14)  is being ignored,                                                               
that's a problem," he said.                                                                                                     
MR.  DICK pointed  out that  paragraph (14)  concludes, "provided                                                               
that the absence or cumulative  absences do not exceed" 180 days.                                                               
Those that  are absent for [no  more than] 180 days  and maintain                                                               
residency and intend  to [continue to] do so  receive a dividend.                                                               
Mr. Dick explained  that the allowable absences  are for absences                                                               
over  180  days,   and  those  provisions  are   defined  by  the                                                               
legislature.  Mr. Dick informed  the committee that last year the                                                               
division had 140 people fall  under this terminally ill category.                                                               
Under  the   assumption  of  200   [people  falling   under  that                                                               
category], the cost would be a $.52 differential.                                                                               
REPRESENTATIVE SEATON  asked if  some people  have applied  for a                                                               
PFD while caring for a grandparent  [and absent for more than 180                                                               
days] and were turned down.                                                                                                     
MR. DICK  said that he didn't  have that information in  front of                                                               
REPRESENTATIVE SEATON  inquired as  to the definition  of "care".                                                               
He also inquired as to whether  an entire family could [be absent                                                               
from the  state] to care for  a grandparent or parent  [and still                                                               
receive a PFD].                                                                                                                 
MR. DICK  said that  it couldn't  be an  entire family  under the                                                               
current  statutes  because the  child  would  [be] caring  for  a                                                               
grandparent, which isn't covered currently.                                                                                     
REPRESENTATIVE  SEATON  surmised then  that  the  effect of  this                                                               
legislation is to allow the entire  family to [be absent from the                                                               
state  to care  for someone]  and  qualify for  the PFD,  because                                                               
passage of this  legislation would allow individuals  to care for                                                               
parents and grandparents.                                                                                                       
MR.  DICK  said he  believes  that  the aforementioned  would  be                                                               
addressed in regulation.  However,  he related his belief that an                                                               
individual  would  take care  of  a  grandparent rather  than  an                                                               
entire family.   Therefore, he  indicated that the  committee may                                                               
want to specify that in the statute.                                                                                            
MR.  DICK, in  response to  the definition  of "care",  explained                                                               
that when  a person claims  this absence on the  PFD application,                                                               
the person is required to submit a form ...[tape change].                                                                       
TAPE 03-10, SIDE B                                                                                                            
REPRESENTATIVE  FATE  pointed  out  that  Section  1(a)  of  this                                                               
legislation refers  to "an otherwise  eligible individual  who is                                                               
absent  from  the   state  during  the  qualifying   year".    He                                                               
emphasized  that  the  language  refers to  an  "individual"  not                                                               
"individuals",  which   he  thought  would  be   defined  by  the                                                               
grandparent.   Therefore,  Representative  Fate wasn't  concerned                                                               
with a family [being absent from the state to care for someone].                                                                
Number 2961                                                                                                                     
REPRESENTATIVE GRUENBERG  turned to  the second paragraph  of the                                                               
fiscal  analysis,  which  says,   "The  Permanent  Fund  Dividend                                                               
Division generally  accepts a  doctor's statement  in determining                                                               
if the relative is terminally ill  ...."  He indicated he thought                                                               
that answers  Chair Weyhrauch's earlier  question with  regard to                                                               
how to determine an individual  is terminally ill.  The amendment                                                               
to this  statute focuses  on the  terminally ill  individual, not                                                               
the  individual going  out-of-state to  provide care,  he pointed                                                               
out.     He   surmised  that   this  legislation   would  include                                                               
grandchildren  as  other  eligible  individuals.   To  that  end,                                                               
Representative Gruenberg noted that in  many cases, adults who go                                                               
out of state to provide care  to a terminally ill [relative] take                                                               
their minor children with them.   Therefore, the problem would be                                                               
that the caregiver would be  covered, but the children would not,                                                               
and thus  the adult caregiver  would receive his/her PFD  but the                                                               
children  would not.   He  asked if  the aforementioned  would be                                                               
MR. DICK replied  yes and confirmed that the  statute speaks only                                                               
to  the caregiver.    Mr.  Dick clarified  that  the only  people                                                               
covered under  the current statute  and who would continue  to be                                                               
covered would be the caregiver not the caregiver's dependents.                                                                  
REPRESENTATIVE FATE  interjected that he didn't  intend to change                                                               
the law but only to expand  the statute to include the individual                                                               
who provides care for their terminally ill grandparent.                                                                         
Number 2764                                                                                                                     
REPRESENTATIVE  BERKOWITZ  pointed  out  that  the  statute  says                                                               
"providing  care"   and  sometimes  the  best   care  comes  from                                                               
children.   Representative Berkowitz related his  belief that the                                                               
statute is  sufficiently vague  so as  to incorporate  the notion                                                               
that care can come in many different forms.                                                                                     
REPRESENTATIVE FATE remarked,  "I think in this  instance you may                                                               
be right, but I think we're talking about medical care."                                                                        
REPRESENTATIVE  BERKOWITZ interjected  that  the statute  doesn't                                                               
refer to medical care.                                                                                                          
REPRESENTATIVE FATE  acknowledged that the presence  of child may                                                               
boost moral, however that's not usually considered care.                                                                        
REPRESENTATIVE BERKOWITZ asked  if there is a  definition of care                                                               
that he could review.                                                                                                           
REPRESENTATIVE FATE  indicated that if  one were to  approach the                                                               
physician, the physician would provide a definition of care.                                                                    
REPRESENTATIVE BERKOWITZ pointed out  that unless that definition                                                               
of care is included in the statutes, it is immaterial.                                                                          
Number 2648                                                                                                                     
CHAIR  WEYHRAUCH related  his  understanding that  Representative                                                               
Fate's intent is simply to add the words "or grandparent".                                                                  
REPRESENTATIVE FATE  agreed and  specified that he  didn't become                                                               
involved in this to modify the entire Act.                                                                                      
CHAIR  WEYHRAUCH said  that, to  him,  it seems  that any  person                                                               
related  in  any  way  would  be  eligible  for  a  PFD  if  that                                                               
individual can  provide any reason  consistent with  their intent                                                               
to remain a state resident.   He noted that the legislature could                                                               
take the  aforementioned discretion  away and  make it  clear and                                                               
certain,  which  he  related  is  always  a  good  thing  to  do.                                                               
However, he said he isn't sure whether HB 14 is the vehicle.                                                                    
REPRESENTATIVE  BERKOWITZ  pointed  out that  the  individual  is                                                               
limited to  180 days within  a calendar  year and thus  the [time                                                               
absent from  the state  for an allowable  absence] could  sum 360                                                               
days if  the time was from  June to January and  January to June.                                                               
He  characterized that  as  somewhat  problematic because  people                                                               
can't schedule  their illnesses to comport  with PFD eligibility.                                                               
Representative  Berkowitz expressed  his  desire  to expand  this                                                               
[Act] to include people providing  care to family members, [while                                                               
recognizing] that  there are all  types of families of  which one                                                               
is direct blood lineage.                                                                                                        
Number 2571                                                                                                                     
REPRESENTATIVE  GRUENBERG  expressed   concern  with  Mr.  Dick's                                                               
earlier answer to  Representative Berkowitz regarding [paragraph]                                                               
(14).   He interpreted Mr. Dick's  earlier answer to be  that the                                                               
division isn't exercising any discretion  at all and not applying                                                               
[paragraph (14)] at all.  He asked if that is correct.                                                                          
MR. DICK answered that he isn't sure.                                                                                           
REPRESENTATIVE  GRUENBERG inquired  as  to the  number of  people                                                               
receiving  dividends under  [paragraph]  (14)  who would've  been                                                               
eligible under any other [paragraph].                                                                                           
MR.  DICK again  answered that  he isn't  sure.   He offered  the                                                               
following example:  There are  8,200 felons and misdemeanants who                                                               
aren't  eligible  for  the  PFD in  another  [paragraph]  of  the                                                               
statute,  although those  individuals were  probably out-of-state                                                               
for less  than 180 days.   Mr. Dick specified that  the intent to                                                               
remain and residency  are always reviewed.   Therefore, those who                                                               
are out-of-state  for less  than 180  days but  move out-of-state                                                               
toward the end of the year aren't eligible for a PFD.                                                                           
REPRESENTATIVE GRUENBERG  asked if felons and  misdemeanants have                                                               
been awarded a PFD under [paragraph] (14).                                                                                      
MR.  DICK   reiterated  that  felons  and   misdemeanants  aren't                                                               
eligible for a PFD under another statute.                                                                                       
REPRESENTATIVE GRUENBERG asked, "Have  you awarded them dividends                                                               
under [paragraph] (14)?"                                                                                                        
MR. DICK replied no.                                                                                                            
REPRESENTATIVE  GRUENBERG  asked  if  the  division  has  awarded                                                               
anyone a dividend under [paragraph] (14).                                                                                       
MR.  DICK  answered  yes  and informed  the  committee  that  the                                                               
division has  given dividends  to persons  outside the  state for                                                               
less than 180 days, so long as those individuals are residents.                                                                 
REPRESENTATIVE  GRUENBERG  asked,  "Have   you  given  anybody  a                                                               
dividend under [paragraph] (14) who  would not have been eligible                                                               
under any other [paragraph], that you can recall?"                                                                              
MR. DICK  explained that if  an individual wasn't  eligible under                                                               
another [paragraph], then  the division would not  have given the                                                               
individual the dividend.                                                                                                        
REPRESENTATIVE  GRUENBERG interjected,  "Then  the  answer to  my                                                               
question is no."                                                                                                                
MR. DICK answered that would be correct.                                                                                        
CHAIR  WEYHRAUCH asked  if military  personnel would  be eligible                                                               
under [paragraph (14)].                                                                                                         
REPRESENTATIVE  GRUENBERG pointed  out  that  the eligibility  of                                                               
military personnel is addressed under another [paragraph].                                                                      
Number 2405                                                                                                                     
REPRESENTATIVE SEATON related  his understanding that individuals                                                               
who leave the state for less  than 180 days would be eligible for                                                               
the PFD under [paragraph] (14).                                                                                                 
MR.  DICK answered  that is  correct  so long  as the  individual                                                               
maintains residency and doesn't  take steps while out-of-state to                                                               
break  residency.   Mr. Dick  informed the  committee that  there                                                               
have been individuals who have  traveled out-of-state and taken a                                                               
job  out-of-state.   However, the  individual ultimately  decided                                                               
that  he/she didn't  want to  stay  and thus  he/she returned  to                                                               
Alaska.   Those  individuals broke  residency, weren't  residents                                                               
for the entire qualifying year, and thus were denied the PFD.                                                                   
REPRESENTATIVE   BERKOWITZ  inquired   as   to   the  number   of                                                               
individuals who  have been  denied a  dividend and  applied under                                                               
[paragraph] (14).                                                                                                               
MR.  DICK   related  his  understanding  that   the  question  is                                                               
attempting  to address  those persons  who aren't  eligible under                                                               
another section of the statute.                                                                                                 
REPRESENTATIVE BERKOWITZ  clarified that  he wants  to understand                                                               
if  there  is  a  catchall   provision  allowing  the  department                                                               
discretion to award dividends  when situations don't specifically                                                               
fit into one of the specified exceptions under AS 43.23.008.                                                                    
MR.  DICK replied  no,  the division  follows  the statutes  very                                                               
Number 2354                                                                                                                     
REPRESENTATIVE BERKOWITZ  noted that there  is a group  of people                                                               
who do not receive their  dividend; many of those people initiate                                                               
an appeal.   Those appeals have  to be done under  the subsection                                                               
of the law,  he said.  He requested information  as to the number                                                               
of those appeals  that were launched under [paragraph]  (14).  Of                                                               
those  appeals launched  under [paragraph]  (14),  how many  were                                                               
granted, he asked.                                                                                                              
MR. DICK  corrected his earlier statement  regarding the children                                                               
of  those who  travel out-of-state  to provide  care to  the sick                                                               
relative.  He  stated that under [paragraph]  (13) those children                                                               
would be covered.                                                                                                               
CHAIR WEYHRAUCH  commented that  this legislation  is interesting                                                               
because  it  raises tangential  issues  which  may give  rise  to                                                               
larger omnibus legislation addressing  many of the aforementioned                                                               
concerns.  However,  he related that he isn't sure  whether HB 14                                                               
is the  vehicle for  those.   He said  he believes  the immediate                                                               
need is  to address [the  inclusion] of grandparents and  thus he                                                               
noted  his desire  to  take  action on  this  [legislation].   He                                                               
offered  to  work with  the  members  of  the committee  and  the                                                               
division to address  the concerns in a larger  context in another                                                               
piece of legislation.                                                                                                           
REPRESENTATIVE BERKOWITZ pointed out  that the proposed amendment                                                               
would  also  fit  well  in [paragraph]  (8)  of  [AS  43.23.008].                                                               
Furthermore, if those issues can  be addressed by a definition of                                                               
"family"  [and] "guardian",  then  [the  committee] could  ensure                                                               
that  the   intent  of   Representative  Fate's   legislation  is                                                               
The committee took an at-ease from 9:08 a.m. to 9:17 a.m.                                                                       
REPRESENTATIVE BERKOWITZ moved  to report HB 14  out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
REPRESENTATIVE BERKOWITZ  announced that his  recommendation will                                                               
be to  amend the legislation.   He expressed the need  to correct                                                               
the  definition  of  "family"  in  [paragraph]  (7)  as  well  as                                                               
[paragraphs] (6)  and (8), which  seem to include  parallel lists                                                               
of individuals.                                                                                                                 
CHAIR WEYHRAUCH asked  if there was any objection  to the motion.                                                               
There  being no  objection, HB  14  was reported  from the  House                                                               
State Affairs Standing Committee.                                                                                               

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