Legislature(1999 - 2000)
04/18/2000 09:09 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 337(JUD)
"An Act relating to claims against permanent fund
dividends to pay amounts owed to the Department of
Labor and Workforce Development under the Alaska
Employment Security Act and to fees for processing
certain claims against permanent fund dividends; and
providing for an effective date."
RON HULL, Deputy Director, Division of Employment Security,
Department of Labor, explained that his work included the
collection of taxes from Alaska's employers and the paying
out of benefits to Alaskans who are temporarily out of
work. Last year over $129 million dollars were paid out in
benefits. Inherent in the responsibility of administering
the program is the protection of the Unemployment Insurance
(UI) Trust Fund. By protection, Mr. Hull indicated that he
meant detection, prevention, and the collection of
improperly paid benefits.
Mr. Hull continued, as of 12/31/99, the overpayment
balances were as follows:
*Fraud $4,912,384
*Non-Fraud $1,516,688
*Penalty $3,145,620 (penalty for fraud)
He noted that the bill would speed the recovery of overpaid
UI benefits that are currently a debt to the State. The
overpaid benefits would be returned to the Trust Fund,
which have a beneficial effect on the employers' UI tax
rates. The penalty amount would be deposited into the
General Fund.
Mr. Hull added that with passage of the legislation, the
Department estimates in the first year a return of over
$1.5 million dollars to the Trust Fund, and over $750
thousand dollars to the General Fund. Every year
thereafter, it is estimated between $700 - $800 thousand
dollars would be returned to the Trust Fund and between
$400 - $500 thousand dollars would be deposited in the
General Fund.
Mr. Hull concluded that passage of the bill would be good
for the UI Trust Fund, the General Fund and for Alaska's
employers.
Co-Chair Torgerson asked what currently happens with the
debt.
Mr. Hull noted that much of the balance goes uncollected.
The method most used for collecting is in the case of
someone reapplying for benefits in the future, then they
can be tracked.
Co-Chair Torgerson asked why it is not taken to Small
Claims Court.
Mr. Hull advised that sometimes it is taken to Small Claims
Court and from time to time to Criminal Court.
Senator Adams pointed out that the limit had been raised to
$20 thousand dollars. He asked if that could be used for
the State's advantage.
Mr. Hull did not know. He reminded members that this work
is labor-intensive and the problem continues of getting the
money to the Trust or General Fund.
Co-Chair Torgerson countered that if the case went to
court, the judgement could be taken and filed against the
Permanent Dividend check.
Co-Chair Torgerson observed that then the bill would
provide for no court action, and instead, go directly to
the attachment.
Mr. Hull explained that it would but the Department wants
to be in the same category as other State agencies so as to
levy these funds.
Co-Chair Parnell questioned the need of the State to
continue to expand the scope of the State's ability to
assume action on the PFD.
Mr. Hull stressed that arrangement is "good" for all State
Divisions.
Co-Chair Parnell questioned what is "good" State policy,
while not going through "due process".
Mr. Hull replied that all agencies are required to go
through that process, referencing the Child Support
Enforcement Agency (CSEA). Mr. Hull questioned why it was
not "good" policy to collect State debt.
Senator Parnell repeated his question of why the State
should be allowed to take action without going to court.
Mr. Hull responded that it was a debt to the State.
Senator Wilken asked how it was determined who would file
against the PFD for money in dispute.
Mr. Hull stated if any amount was in dispute, the agency
would not be allowed to move forward as written in current
statute. He noted that there exists an administrative
appeals process for court actions.
Co-Chair Torgerson referenced Page 2, Lines 9-13, asking if
those actions would be addressed through the use of social
security numbers. He questioned the "broad based" language
used.
Mr. Hull explained that the language would bring the
Department in compliance with requirements that the
Department of Revenue had established.
Co-Chair Parnell pointed out that for PFD purposes, often a
birthdate is needed. Some people do not have social
security numbers yet and that alternate forms of
identification can be used.
Co-Chair Torgerson assumed that the people referenced in
the legislation would be old enough to be working;
otherwise, the provision would not apply to them.
Co-Chair Torgerson inquired if the notices were sent
registered mail.
Mr. Hull replied that they are sent through regular mail.
Senator Parnell asked if the State indicates notice of the
"right to appeal".
Mr. Hull explained that there are a number of documents
sent. The first document is send to the claimant and the
employer. If funds are owed, the claimant receives a
letter of determination, which contains that document.
Senator Parnell reiterated his question, if the claimant
received notice of the right to appeal for any decision.
Mr. Hull advised that the claimant does receive such a
packet, which explains how to place those appeals.
Senator Leman offered three minor technical amendments.
Page 3, Line 26, delete "interpret"; Page 3, Line 29,
transpose the words "only include"; Page 4, Line 6 & 7,
delete "interpret for". Senator Leman MOVED to adopt those
language changes. There being NO OBJECTION, the amendments
were incorporated.
Co-Chair Parnell MOVED to report SCS CS HB 337 (FIN) out of
Committee with individual recommendations and with fiscal
notes by Department of Revenue and Department of Labor and
Workforce Development. There being NO OBJECTION, it was so
ordered.
Co-Chair Torgerson stated that SCS CS HB 337 (FIN) was
reported out of Committee with a "do pass" recommendation
and with fiscal notes by Department of Revenue dated 2/8/00
and Department of Labor and Workforce Development dated
1/12/00.
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