Legislature(1995 - 1996)
02/07/1995 08:05 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HSTA - 02/07/95 HB 32 - PFD ADMINISTRATIVE PROCEEDINGS Number 391 MELINDA GRUENING, Legislative Assistant to Representative Joe Green, the prime sponsor of HB 32, said that because of one of his constituents who had been waiting two years for his Permanent Fund Division (PFD) Representative Green began investigating the problem. He thought two years was entirely too long for anyone to wait on appeals. When he contacted the Permanent Fund Dividend Division, he found out the number of appeals pending were directly related to the high number of appeals filed. A number of these, he discovered, could be considered frivolous appeals. HB 32 addresses the problem of the huge number of appeals after a person has been denied a PFD, and the time it takes to file those appeals. MS. GRUENING commented as of January 1995, there were 9,704 appeals pending. This is the highest number since the PFD program's inception. The statistics received from the Department of Revenue show there are some people who have waited longer than two years. Processing such a large number of appeals is costly, and the time delays are unfair to persons with legitimate claims to appeal. Currently, there are 10 permanent full-time employees in the PFD division, and three appeals officers in the commissioner's office working on processing appeals. They are reorganizing the appeals officers in the commissioner's office, so there will be one person full time in the commissioner's office. MS. GRUENING said part of the problem is that it only costs a 32- cent stamp to file an appeal, so people tend to automatically file an appeal when they are denied. Many people who are not qualified clearly file for an appeal; some who were out of state, or they missed the deadline. The denial rate was 64 percent last year, and in previous years the rate has been even higher. HB 32 would implement a $25.00 filing fee for individuals protesting the denial of their PFD application. The department will adopt a regulation that will allow an indigent individual to be exempt from this fee. The filing fee would be refundable if the applicant's appeal is successful, and it would be non-refundable if the denial is not overturned. It is anticipated that the implementation of a filing fee would discourage clearly unqualified persons from appealing. It would reduce the cost and make the appeals process shorter and more streamlined for those with legitimate claims. Also, because administrative costs are deducted from each person's PFD check, the positive fiscal note associated would mean a slightly larger check. REPRESENTATIVE ROBINSON asked why the appeals process takes so long. Number 456 MS. GRUENING answered it is a three tier process: An informal appeal process, then the formal appeal process, and then finally, they can appeal to Superior Court. They have worked on efficiencies, but there are a large number of appeals and they cannot get caught up. REPRESENTATIVE ROBINSON said she was also trying to imagine $25.00 coming in and then $25.00 going out, and about who will cut the checks. Number 479 TOM WILLIAMS, Director, Permanent Fund Dividend Division, Department of Revenue, addressed the appeals process. Some individuals are denied a PFD check by their document processing section, based on the information they provide on their application, if it shows they are clearly ineligible. They also select other applications for an eligibility determination process by their review staff. They can issue denials, and they do. An 7individual who has been denied by either process has 60 days to file an informal conference appeal. It is for someone whose application has an error and the applicant has an opportunity to say we have the facts wrong. Then there are the informal conference levels that determine if they made a right decision; otherwise, they pay the individual. If the applicant is denied, but they think the department is still wrong, they can request a formal hearing. They have 30 days to do that. The formal hearing is conducted before the commissioner's office staff. The division has people who represent the department's position, and the individual can represent their position before the formal hearing staff. The formal hearing staff will issue a decision, either overturning the denial or upholding it. If the denial is upheld by the informal hearing staff, the individual has 30 days to appeal to the Superior Court, so there is a three tier appeal process. Most denials that will be overturned are overturned at the informal conference stage. They are trying to reduce the number of frivolous appeals. Number 553 CHAIR JAMES asked if they have a calculation based on the volume of appeals, and what the cost is. MR. WILLIAMS said they do not have an overall cost. It varies by the nature of the appeals. He could get the committee an amount of how much it costs to run the appeal's section. Number 564 REPRESENTATIVE ROBINSON said this is a good idea, yet she wondered if money going in and out again would be a problem. This legislation might solve one problem and create another one. Number 570 MR. WILLIAMS said that when adding a procedure there are administrative things that need to be done to implement that. They have the basic mechanism there to deal with money coming in and going out, so the most significant impact would be the time it would take to do the necessary data processing programming. REPRESENTATIVE ROBINSON asked if Mr. Williams thought it would be a benefit, or a good direction to go. She also asked if they started making money if it would go to the general fund. Number 595 MR. WILLIAMS thought it would be "do-able." It would reduce the number of appeals they would get, and it would ultimately show a reduction in staff. Also, any money they made would go to the permanent dividend fund. Number 596 REPRESENTATIVE PORTER said he assumed that the appeals form provided for people who disagreed about the denial and informed them clearly about the process involved. He was skeptical about the odds of them winning their cases. Number 603 REPRESENTATIVE WILLIS asked if a household was denied payment of the PFD checks, based on the sponsor being denied, if every member of the household would have to pay the $25.00. MR. WILLIAMS answered, yes. There are variations of situations, and individual determinations. If the sponsor qualifies the child will qualify. REPRESENTATIVE IVAN had a question of Ms. Gruening. He asked what the definition is for indigent. Number 622 MS. GRUENING said she spoke to Vince Usera in the Department of Law who said it would be the same criteria that are used for determining indigent status for the court system. REPRESENTATIVE IVANS concern was for the constituents in his district who cannot speak or read the English language. He needed to know what the impact would be on people such as them, including the dollar amount involved. Number 633 CHAIR JAMES said what "indigent" means is that they don't have any money to pay. The person is not financially able to pay the $25.00. There are other reasons a person might not be able to pay a fee that would not indicate the person is indigent. Number 654 REPRESENTATIVE OGAN suggested amending the bill with language similar to that in the application to get a hunting license. When a person cannot afford to pay for the license, the criteria are simple. If a person's income is less than a designated amount they can sign an affidavit and get the hunting license. Number 664 REPRESENTATIVE GREEN suggested that we modify the bill, which now reads "indigent." The committee could modify that, replacing indigent with a dollar amount, like $2,000 a year, if that would be the desire of the committee. Number 667 REPRESENTATIVE PORTER suggested that the wording merely include "indigent, as defined in a designated state statute." REPRESENTATIVE ROBINSON stated that if HB 70 was passed, it will take out anyone in the military who is on food stamps, or a person who is sick and on food stamps, or anyone on welfare who is on food stamps, so very few people will even qualify for this. Number 675 MS. GRUENING passed on to the committee that Vince Usera in the Department of Law said that the court is determined that this should be handled by regulation, not by law. She said they could find what the criteria are, and it could be written into the bill, if that is the wish of the committee. REPRESENTATIVE IVAN said he would like to request a definition of the word, "indigent" and what impact it would have on the people in that category. Number 682 REPRESENTATIVE GREEN said the issue of importance is whether it is the will committee to use the word "indigent" and then define the word in the bill, or not to use "indigent" and put in a dollar amount. Number 685 REPRESENTATIVE ROBINSON said she would like to know how "indigent" is defined in other areas, so that the committee is consistent. Number 687 REPRESENTATIVE OGAN moved that the committee adopt the proposed amendment and word it similarly to the hunting license criteria. CHAIR JAMES said that since we did not have a copy of the regulations about getting a hunting license, she would have to say that motion was not in order. REPRESENTATIVE PORTER suggested that we hold the bill over and research what the criteria are for getting a hunting license. If it is a straightforward position, then we may see if that is appropriate for HB 32. TAPE 95-11, SIDE A Number 000 CHAIR JAMES also felt that since the committee was not in consensus on this issue, there needed to be a change in the language of the bill. MS. GRUENING asked exactly what it was the committee wished for her to research. CHAIR JAMES answered that she should look in other areas to see what people are exempt from paying certain fees because they don't have any money, then bring it forward to committee to see what options they have. If "indigent" is the only option, then they will need to know what it means so they can relate it to specific people in their districts. She said they would hold the bill over until the next meeting on Thursday, February 9, and put it under previously heard bills on the agenda.
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