Legislature(2003 - 2004)

04/06/2004 08:01 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 547-PFD: DELAY PAYMENT FOR ALLOWABLE ABSENCES                                                                              
                                                                                                                                
Number 0147                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH announced that the  first order of business would                                                               
be  HOUSE BILL  NO. 547,  "An Act  relating to  the dividends  of                                                               
individuals  claiming allowable  absences; and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
Number 0160                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON referred  to  a  [two-page chart]  listing                                                               
allowable absences from  the years 1999 to 2003  [included in the                                                               
committee packet].   He noted some of the amounts  of absences on                                                               
the  chart,  for  categories  such  as  "accompanied,"  "enrolled                                                               
college,"  "active  duty,"  and  "medical."   In  response  to  a                                                               
question from  Chair Weyhrauch, he  confirmed that the  chart was                                                               
prepared by the [Permanent Fund Dividend] Division.                                                                             
                                                                                                                                
Number 0245                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON moved to adopt HB 547 as a work draft.                                                                    
                                                                                                                                
CHAIR WEYHRAUCH objected for discussion purposes.                                                                               
                                                                                                                                
Number 0265                                                                                                                     
                                                                                                                                
SHARON BARTON, Director, Central  Office, Permanent Fund Dividend                                                               
Division, Department  of Revenue (DOR), offered  a brief overview                                                               
of the previously  mentioned chart.  She noted that  the chart is                                                               
an initial  response to  a request  from the  committee to  see a                                                               
breakdown  in the  numbers involved  in  the allowable  absences.                                                               
She  reminded the  committee that  it  had requested  information                                                               
regarding  "behavior patterns  beyond that,"  including how  long                                                               
people are  staying out [of Alaska]  and whether or not  they are                                                               
returning.  She explained that  the division has that information                                                               
stored, but  because of  the age  of its  computers, it  would be                                                               
labor  intensive to  retrieve the  information.   Notwithstanding                                                               
that,  she said  the  division would  carry  out the  committee's                                                               
request  "if it  ends  up being  pivotal  ... to  decision-making                                                               
here."                                                                                                                          
                                                                                                                                
Number 0388                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON offered his  understanding that the request                                                               
had been for the division to  take the applications at "six years                                                               
and  ten years,"  and follow  those  applications to  see if  the                                                               
allowable absences  ended with a  permanent fund  granted without                                                               
allowable absences or [if they were] terminated.                                                                                
                                                                                                                                
MS. BARTON  confirmed that was  true, but clarified that  is what                                                               
would be  "terribly labor intensive for  us to dig out  for you."                                                               
She  illustrated  that  it  would mean  taking  staff  away  from                                                               
important work in order to complete this request.                                                                               
                                                                                                                                
REPRESENTATIVE SEATON  asked if  following a single  year instead                                                               
of two years would cut the work in half.                                                                                        
                                                                                                                                
MS. BARTON answered that it  wouldn't matter.  She specified that                                                               
it's a  matter of  asking the computer  to track  each individual                                                               
applicant through  some 12 million records,  using an inefficient                                                               
system.  Manual  effort would be used to  program each individual                                                               
[search].  She  clarified, "So, it doesn't really  matter how far                                                               
back we go; once we get  into each individual record, [we] can go                                                               
back as far as that record goes."                                                                                               
                                                                                                                                
Number 0505                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM noted  [on the chart] that in  1999, only two                                                               
people were  listed under the category  of "secondary education,"                                                               
and since  then there have  been close to  1,000.  He  asked what                                                               
caused the change.                                                                                                              
                                                                                                                                
MS.  BARTON answered  that she  suspects that's  an error  in the                                                               
data.                                                                                                                           
                                                                                                                                
Number 0569                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH closed public testimony on HB 547.                                                                              
                                                                                                                                
REPRESENTATIVE  SEATON asked  Ms. Barton  if the  fiscal note  is                                                               
accurate,  or if  the division  would be  filing a  more detailed                                                               
one.                                                                                                                            
                                                                                                                                
MS.  BARTON confirmed  that more  work needs  to be  done on  the                                                               
fiscal  note  because  the  one before  the  committee  was  done                                                               
quickly for the last hearing.                                                                                                   
                                                                                                                                
Number 0608                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  said it bothered  him that  approximately $7                                                               
million is  being given  away and  Ms. Barton  had said  that the                                                               
division has an inefficient computer system with which to work.                                                                 
                                                                                                                                
MS.  BARTON said  she  thinks  the inefficiency  is  a result  of                                                               
different pieces of [the computer  system] being built at various                                                               
times  and not  working well  together.   She indicated  that the                                                               
division has submitted  a request for funds to  change the system                                                               
to a more cohesive one.  She offered details.                                                                                   
                                                                                                                                
REPRESENTATIVE HOLM  asked how the  processing of  permanent fund                                                               
dividend (PFD) checks is paid for.                                                                                              
                                                                                                                                
MS.  BARTON  replied that  the  division's  operations are  fully                                                               
funded out  of the PFD  fund.   In response to  another question,                                                               
she relayed that  updating the division's computer  system is now                                                               
the department's number one priority, as well as her own.                                                                       
                                                                                                                                
Number 0860                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  offered his understanding  that "this  assumes a                                                               
$50,000 expenditure ... in 2005."   He noted that the fiscal note                                                               
does not clarify "what that would be going for."                                                                                
                                                                                                                                
MS. BARTON  confirmed that is  the assumption and  explained that                                                               
it was  the staff's  quick estimate at  the programming  costs if                                                               
the  research was  handled  as  a special  project  - a  one-time                                                               
event.   She explained that the  division is working on  what the                                                               
cost would  be "if  we weave  it in to  this upgrade  we're doing                                                               
right now."  She added, "We believe  we can hone it down from the                                                               
$50,000."                                                                                                                       
                                                                                                                                
CHAIR WEYHRAUCH  asked if  one possible impact  of passage  of HB
527 would be  a decline in the applications and  payments, and if                                                               
that would be reflected in the fiscal note.                                                                                     
                                                                                                                                
MS. BARTON surmised  that there would be  an indeterminate amount                                                               
of people  who, because  of the bill,  would be  discouraged from                                                               
filling out an application for a  PFD because they know that they                                                               
will  not  be  coming  back  to  Alaska.    Out  of  the  625,000                                                               
applications  received   every  year,  she  said,   the  division                                                               
probably won't notice a change in workload.                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH asked  what kind  of authorization  the division                                                               
would need to print on the  checks the total amount of PFD checks                                                               
that are mailed to out-of-state addresses.                                                                                      
                                                                                                                                
MS. BARTON responded that the division  could do that as a matter                                                               
of procedural policy; it does  not need statutory authority to do                                                               
so.  The [lack of] room on  the check would be a limiting factor,                                                               
although the division could find room.                                                                                          
                                                                                                                                
Number 1006                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  noted that there is  a discrepancy between                                                               
the number of checks mailed and  the amount of money sent [out of                                                               
state], and asked why.                                                                                                          
                                                                                                                                
MS.  BARTON answered  that  some  of the  people  who would  have                                                               
applied for the  allowable absence PFD check  would have returned                                                               
to Alaska  and received  the check  at their  home address.   She                                                               
confirmed that  another reason  could be  that they  are students                                                               
and the check was mailed to their parents' Alaska address.                                                                      
                                                                                                                                
Number 1061                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL, regarding checks  that are mailed out [of                                                               
state], asked  how the division  is presently set up  to discover                                                               
fraudulent applications.                                                                                                        
                                                                                                                                
MS. BARTON  answered that the  division has just  reorganized its                                                               
"fraud  unit" and  has reestablished  working relationships  with                                                               
fraud enforcement  people across the  state, as well as  with the                                                               
federal government.   She revealed that the  division is probably                                                               
most successful  discovering fraud through tips  from the public.                                                               
She  stated that  the division  gets  hundreds of  tips from  the                                                               
public  and investigates  each one.   Additionally,  the division                                                               
performs focused audits.   For example, all  applications with an                                                               
out-of-state postmark are audited,  as well as those applications                                                               
submitted  by people  who  have refused  jury  duty because  they                                                               
claimed not  to be residents of  the state.  Ms.  Barton reported                                                               
the findings  of the fraud investigator  for the past year.   She                                                               
noted  that  the office  of  the  inspector general  in  Seattle,                                                               
Washington, has  agreed to  take all  of the  division's identity                                                               
theft cases, of which there are presently three.                                                                                
                                                                                                                                
Number 1217                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL  said he  is trying to  decide:   "Is this                                                               
huge policy call worth the effort of those very, very few?"                                                                     
                                                                                                                                
Number 1250                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH   asked  if  the   identity  theft   arose  from                                                               
electronically generated applications, or paper [applications].                                                                 
                                                                                                                                
MS. BARTON answered she doesn't have that information.                                                                          
                                                                                                                                
Number 1330                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  turned attention to [Section  1, subsection (a)]                                                               
of the bill, which read as follows:                                                                                             
                                                                                                                                
     *Section  1.  AS  43.23  is amended  by  adding  a  new                                                                  
     section to read:                                                                                                           
          Sec. 43.23.009.  Dividends of individuals with                                                                      
     allowable  absences.     (a)     Notwithstanding  other                                                                  
     provisions   regarding   payment  of   dividends,   the                                                                    
     dividend  of  an individual  who  was  absent from  the                                                                    
     state  during  the qualifying  year  as  allowed in  AS                                                                    
     43.23.008(a)(1)-(8) or (10)-(13) shall  be paid to that                                                                    
     individual  on  the  first  subsequent  year  that  the                                                                    
     individual is eligible for  a dividend without claiming                                                                    
     an  allowable absence  under AS  43.23.008(a)(1)-(8) or                                                                    
     (10)-(13).   A  dividend  that has  not become  payable                                                                    
     under  this  subsection  may  not   be  paid  under  AS                                                                    
     43.23.005(h).                                                                                                              
                                                                                                                                
CHAIR WEYHRAUCH  - noting that  currently, [paragraph (9)]  of AS                                                               
43.23.008(a) pertains to members of  the United States Congress -                                                               
brought attention to a possible  Amendment 1, to insert [existing                                                               
paragraph  (9) of  statute] in  Section 1,  thus having  the bill                                                               
apply  to paragraphs  (1)-(13)  of the  current  statute.   Chair                                                               
Weyhrauch explained  that he thinks  it would be unfair  to treat                                                               
members of the U.S. Congress differently.                                                                                       
                                                                                                                                
REPRESENTATIVE GRUENBERG  stated opposition  to Amendment 1.   He                                                               
indicated that he had been on  a naval ship and he considers that                                                               
part  of  the United  States.    He  said  he thinks  an  Alaskan                                                               
congressman's turf in  Washington, D.C., is part of  the state of                                                               
Alaska.                                                                                                                         
                                                                                                                                
REPRESENTATIVE SEATON noted that he  has received 17 e-mails that                                                               
have raised concerns about the bill,  and 15 e-mails that were in                                                               
favor of it.   One of the e-mails in  support expressed the point                                                               
of view that everyone should be treated equally.                                                                                
                                                                                                                                
Number 1448                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH stated  he understands Representative Gruenberg's                                                               
point, but  thinks of this issue  as a policy statement  and thus                                                               
looks at the  definition of what would be considered  part of the                                                               
state a little more tightly.  He  said, "It looks fair, to me, to                                                               
treat them like everybody else,  including those who have to care                                                               
for a  dying family member  or going  to school or  the military;                                                               
once  they  come  back,  they'll   receive  a  large  payment  of                                                               
dividends that indicate their leave out of the state."                                                                          
                                                                                                                                
REPRESENTATIVE  GRUENBERG responded  that  [members  of the  U.S.                                                               
Congress]  represent the  state;  they don't  just represent  one                                                               
person, as  in the  case of  someone caring for  a relative.   He                                                               
offered more examples.   He said, "Frankly, I don't  think any of                                                               
us  do as  much for  the  state as  our congressional  delegation                                                               
does,  and  I think  it's  just  as  symbolic  to give  them  the                                                               
dividend, even if you don't give it to anybody else."                                                                           
                                                                                                                                
Number 1533                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON pointed out  that, currently, the bill does                                                               
not include congressional "staffers" for exemptions.                                                                            
                                                                                                                                
REPRESENTATIVE  GRUENBERG said  the only  people exempted  in the                                                               
bill are  the three  members of U.S.  Congress, and  "they're the                                                               
people who  push the button on  the floor (indisc. -  voice faded                                                               
out)."                                                                                                                          
                                                                                                                                
Number 1579                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL commented  that  given  the longevity  of                                                               
Alaska's  congressional delegation,  its  members  may never  get                                                               
[the PFD].                                                                                                                      
                                                                                                                                
REPRESENTATIVE HOLM remarked  that "you could argue  this on both                                                               
sides."                                                                                                                         
                                                                                                                                
Number 1600                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH withdrew Amendment 1.                                                                                           
                                                                                                                                
REPRESENTATIVE  SEATON emphasized  that the  proposed legislation                                                               
is not  so much  concentrated on  fraud as it  is on  offering an                                                               
incentive  for people  to  return  from outside  the  state.   He                                                               
indicated that the system is the  creation of the state and there                                                               
is nothing  inherently right  or wrong about  it; the  state just                                                               
needs  to  figure  out how  it  wants  to  run  the system.    He                                                               
indicated that  most of  the comments sent  in opposition  to the                                                               
bill were [from  those in] the military or college  students.  He                                                               
said   the  comments   from   the  military   seemed   to  be   a                                                               
misinterpretation   that  the   dividends  would   be  cut   off.                                                               
Representative  Seaton emphasized  that's not  the intent  of the                                                               
bill.  Conversely,  the bill just states that if  a person who is                                                               
out of the state qualifies for  the dividend, he/she will get the                                                               
dividends upon his/her return to the  state.  He pointed out that                                                               
several [e-mails]  from people in  the military state  support of                                                               
that concept.                                                                                                                   
                                                                                                                                
Number 1729                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM noted  that  in  Fairbanks, military  people                                                               
don't have to get a state  license plate, but they receive a PFD.                                                               
He stated that  he finds it bizarre that "we  would allow that to                                                               
happen."     He  characterized   the  bill  as   "an  interesting                                                               
differential," and applauded Representative  Seaton for taking it                                                               
on; however,  he stated that  he is  not convinced that  it's the                                                               
right program to  have for Alaska.  He said  he thinks it [sends]                                                               
a bad message that people  somehow deserve a "welfare check" just                                                               
for being citizens of Alaska."                                                                                                  
                                                                                                                                
REPRESENTATIVE SEATON  referred to a memorandum  from Legislative                                                               
Legal and  Research Services [included in  the committee packet],                                                               
and said  Legislative Legal  and Research  Services was  asked to                                                               
address the  issues regarding due  process and  equal protection.                                                               
He focused  attention on the  end of  the first paragraph  on the                                                               
second page of the memorandum  showing examples of cases in which                                                               
a regulation  permitting absences  from Alaska  - if  the absence                                                               
was no  longer than the  time physically  present in the  state -                                                               
was  upheld.   He  added,  "But apparently  that's  no longer  in                                                               
effect."                                                                                                                        
                                                                                                                                
Number 1856                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  offered  his understanding  that  that                                                               
referred to the  180-day provision - that a person  cannot be out                                                               
of the  state for over half  of the year  - but added that  he is                                                               
not certain of that.                                                                                                            
                                                                                                                                
MS.  BARTON,  regarding  the  length of  time  for  an  allowable                                                               
absence not  exceeding the  time a  person is  a resident  in the                                                               
state, said she  doesn't know if that was ever  a regulation, but                                                               
it is not one now.  She continued as follows:                                                                                   
                                                                                                                                
     I know  in looking  at these  extended absences  at the                                                                    
     five-year   point  where   we  do   review  them   more                                                                    
     carefully,  we certainly  look at  that as  one factor.                                                                    
     ... If  they were only a  resident of the state  for 18                                                                    
     months and have been gone  for five years, they need to                                                                    
     have  done  many of  the  other  due-diligent kinds  of                                                                    
     things  to  establish  residency and  their  intent  to                                                                    
     return.                                                                                                                    
                                                                                                                                
Number 1926                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  said he would  be interested in  finding out                                                               
what   the  results   would  be   of  getting   a  second   fraud                                                               
investigator.   He  noted  that  the provisions  on  the PFD  are                                                               
rather  specific as  to what  the penalties  are "if  some things                                                               
happen."  He  asked whether any of the checks  sent to fraudulent                                                               
applicants were recovered.                                                                                                      
                                                                                                                                
MS.  BARTON  replied that  the  division  goes after  the  money,                                                               
though, in some  cases, it doesn't press criminal  charges if the                                                               
money  is  paid  back,  but   the  person  loses  the  next  five                                                               
dividends.  She  indicated that it is a little  more difficult to                                                               
retrieve  money from  those  who are  out-of-state.   She  added,                                                               
"And, of course,  to penalize them for  five subsequent dividends                                                               
doesn't mean a thing."                                                                                                          
                                                                                                                                
Number 1991                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG read the numbers,  from 1999 to 2003, in                                                               
the active duty category of the  chart.  He asked if the increase                                                               
was also consistent prior to 1999.                                                                                              
                                                                                                                                
MS.  BARTON  answered  that  she doesn't  know,  but  offered  to                                                               
research it.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG stated  his assumption  that, with  the                                                               
exception of 2001  to 2002, the accompanied  category has "pretty                                                               
steadily  increased, as  well."   He stated  his assumption  that                                                               
"that reflects those folks who are accompanying military folks."                                                                
                                                                                                                                
MS. BARTON  stated that  category is mainly  made up  of military                                                               
spouses  and  families, although  it  also  includes spouses  and                                                               
families of students and of someone  out of the state for medical                                                               
treatment.     In   response  to   a   follow-up  question   from                                                               
Representative Gruenberg,  she stated  that she doesn't  know how                                                               
many  active duty  military people  are  in Alaska  at any  given                                                               
time.                                                                                                                           
                                                                                                                                
Number 2068                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  referred  to  e-mails  in  the  committee                                                               
packet.    He  indicated  that  some  of  the  e-mails  expressed                                                               
opposition to  the fact  that college  students and  others who's                                                               
PFDs  were being  held would  not  be earning  interest on  those                                                               
dividends.  He  shared that another e-mail was in  support of the                                                               
bill because many  high school students choose to  turn down free                                                               
tuition  [to  Alaska's  University  system] in  order  to  attend                                                               
colleges out-of-state and so they  should also wait for their PFD                                                               
checks until they return; however,  the students should receive a                                                               
reasonable amount  of interest on  those checks.   Representative                                                               
Seaton explained that he just wanted  it on the record that those                                                               
comments had been received by e-mail.                                                                                           
                                                                                                                                
REPRESENTATIVE SEATON  noted that some people  had expressed that                                                               
college students often  don't receive a lot of  income, and those                                                               
people suggested  a shorter  time period,  for example,  a "four-                                                               
year grace."                                                                                                                    
                                                                                                                                
Number 2154                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH removed his objection  [to the previous motion to                                                               
adopt HB 547 as a work draft].                                                                                                  
                                                                                                                                
REPRESENTATIVE  LYNN objected.    He stated  that  he thinks  the                                                               
intent of the bill is good,  but doesn't think the military needs                                                               
"this kind of hassle."  He  noted that [those in the military] go                                                               
where  they are  ordered, and  "they take  Alaska with  them when                                                               
they  go somewhere  else."    He commented  that  there are  many                                                               
students who  are not born  with a  silver spoon in  their mouths                                                               
and can use  every dollar they can get.   He stated that although                                                               
he knows  it is not the  intent of the sponsor,  "we're inferring                                                               
that the military  and students tend to be cheats,  more than the                                                               
rest  of the  population."   He  said he  thinks  these kinds  of                                                               
things  need to  be investigated  on  a case-by-case  basis.   He                                                               
concluded, "We need  to protect the PFD - it's  our obligation to                                                               
do so -  but I'm afraid that  this bill throws the  baby out with                                                               
the bathwater, and I cannot support it."                                                                                        
                                                                                                                                
Number 2246                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  responded, "This  is  a  system that  the                                                               
legislature  designed to  allow  extraordinary absences,"  noting                                                               
that  the  conditions  that are  placed  on  those  extraordinary                                                               
absences  are for  the legislature  to decide.   He  continued as                                                               
follows:                                                                                                                        
                                                                                                                                
     It  doesn't  mean that  anybody  is  cheating; it  just                                                                    
     means that we  are designing a system  that pays people                                                                    
     to be  outside.  And if  that is our intention,  to pay                                                                    
     people to  be gone  from the  state, that  is sometimes                                                                    
     the outcome of what the system  has crept to.  And that                                                                    
     is the  entire purpose  of the bill,  to give  people a                                                                    
     reason to  become and remain ...  physical residents at                                                                    
     the end  of their  extended allowable absence.  ... And                                                                    
     so there  is no  intent and there  is no  action saying                                                                    
     that the  people that  are receiving  extended absences                                                                    
     that we allow  are in any way cheats.   So, I want that                                                                    
     really  clear.   Fraud  is  something  that is  totally                                                                    
     different  than a  system that  we  create that  allows                                                                    
     people to be paid to be gone from the state.                                                                               
                                                                                                                                
REPRESENTATIVE  LYNN said  he understands,  but  stated that  the                                                               
gist of his previous remarks remains.                                                                                           
                                                                                                                                
Number 2314                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG directed  the committee's  attention to                                                               
page 3, lines 2-5, which read as follows:                                                                                       
                                                                                                                                
          (c)  Notwithstanding other provisions, a dividend                                                                     
     that has not become payable  to an individual under (a)                                                                    
     of  this section  is not  subject  to levy,  execution,                                                                    
     garnishment, attachment,  or any  other remedy  for the                                                                    
     collection of debt until  that dividend becomes payable                                                                    
     or is paid to the individual.                                                                                              
                                                                                                                                
REPRESENTATIVE GRUENBERG  said if  he were  a bankruptcy-planning                                                               
attorney, he might want to  use that language to protect somebody                                                               
who doesn't have  a lot of assets  but has a fair  amount tied up                                                               
in dividends.                                                                                                                   
                                                                                                                                
TAPE 04-54, SIDE B                                                                                                            
Number 2343                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG continued as follows:                                                                                  
                                                                                                                                
     That   can  be   utilized  to   sequester  funds   from                                                                    
     creditors, in  a (indisc.)  planning situation,  like I                                                                    
     would  be if  I  were a  JAG  [Judge Advocate  General]                                                                    
     lawyer advising  military who have  some debts  and are                                                                    
     about  to be  transferred  from the  state.   It  could                                                                    
     sequester   a  fair   amount  of   money  from   Alaska                                                                    
     creditors.  And  I haven't really thought  about how to                                                                    
     deal with that.   But if somebody could be  gone for 5,                                                                    
     10, [or]  15 years, that could  be $15,000, ultimately,                                                                    
     that's sequestered from creditors.                                                                                         
                                                                                                                                
REPRESENTATIVE  SEATON clarified  that  it  wouldn't be  somebody                                                               
leaving the state, because he/she  doesn't have any future credit                                                               
for dividends; therefore, it would  only be somebody who has left                                                               
the state and  has had allowable absences, and was  not in Alaska                                                               
for an extended  period of time, but then  declared bankruptcy or                                                               
something else outside of the state.                                                                                            
                                                                                                                                
REPRESENTATIVE GRUENBERG concurred.                                                                                             
                                                                                                                                
Number 2292                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL noted  that  what first  appealed to  him                                                               
regarding  the bill  was  "the  draw to  bring  people back  into                                                               
Alaska to  receive their benefit";  however, the more  he thought                                                               
about the practical  "outplay" of the bill, the  more problems he                                                               
had  with  it.   He  said  he appreciates  Representative  Lynn's                                                               
comments.   He stated  that the  check distribution  would almost                                                               
become  "a banking  of  sorts," where  money has  to  be held  in                                                               
account for people.  He indicated  that he is not certain whether                                                               
he  wants that  [additional work]  given to  the [division].   He                                                               
suggested  that   the  intended   consequences  may   be  getting                                                               
outweighed  by the  unintended consequences.   He  also mentioned                                                               
that there might  be an inherent unfairness.  He  noted that less                                                               
than 5 percent of [Alaska's]  overall population has been outside                                                               
of the  state with allowable  absences.  He estimated  that about                                                               
1-2 percent  may be military.   He stated that he  knows there is                                                               
fraud, but said he doesn't know  that it would be worth "having a                                                               
big bureaucratic system and delayed recipients for all that."                                                                   
                                                                                                                                
REPRESENTATIVE  LYNN  said  Alaska   has  no  problem  attracting                                                               
military to the state with or without "this program."                                                                           
                                                                                                                                
REPRESENTATIVE   SEATON  offered   his  understanding   that  the                                                               
division already had an accounting system for holding checks.                                                                   
                                                                                                                                
MS. BARTON stated that the  division currently has to account for                                                               
18-year-old filers [whose  parents or guardians did  not file for                                                               
their PFDs] and  for estates [where someone has died].   She said                                                               
she doesn't think [HB 547]  will create a huge accounting burden.                                                               
She  explained  that  the  applications  will  be  processed  and                                                               
pended, so  in any given  year, the  division will know  what the                                                               
possible liability  is and  those funds will  be retained  in the                                                               
fund until such time as they can be released.                                                                                   
                                                                                                                                
MS.  BARTON, responding  to previous  remarks regarding  possible                                                               
interest  on [the  withheld dividend]  monies, said  the division                                                               
would  have  to think  through  the  process she  just  described                                                               
differently if interest were a part of the equation.                                                                            
                                                                                                                                
Number 2053                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  offered his  understanding that  as the                                                               
bill is  currently written,  the interest  would remain  with the                                                               
fund.                                                                                                                           
                                                                                                                                
MS.  BARTON said  that's correct.    In response  to a  follow-up                                                               
question  from Representative  Gruenberg,  she said  she did  not                                                               
know how  much that would  be per  year, but offered  to research                                                               
that.                                                                                                                           
                                                                                                                                
REPRESENTATIVE LYNN  said, "It would seem  to me that if  we were                                                               
... paying interest on money  being withheld, this interest would                                                               
belong to the  person that this money would  eventually belong to                                                               
when they return  to the state, rather than to  the state.  You'd                                                               
be  getting interest  on somebody  else's money  - a  pretty good                                                               
deal."                                                                                                                          
                                                                                                                                
Number 2018                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH said, "All right, there's  a motion on HB 547 and                                                               
an  objection."   [Although  the motion  pending  was whether  to                                                               
adopt  HB  547  as  a  work  draft,  the  committee  treated  the                                                               
following roll call  vote as if it pertained to  a motion to move                                                               
the bill from committee.]                                                                                                       
                                                                                                                                
A roll  call vote  was taken.   Representatives  Gruenberg, Holm,                                                               
Seaton, and Weyhrauch voted in  favor of HB 547.  Representatives                                                               
Coghill  and  Lynn voted  against  it.    Therefore, HB  547  was                                                               
reported out of  the House State Affairs Standing  Committee by a                                                               
vote of 4-2.                                                                                                                    
                                                                                                                                

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