2000-02-03                     Senate Journal                      Page 2182
SB 246                                                                       
SENATE BILL NO. 246 BY THE SENATE RULES COMMITTEE                              
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
                                                                               

2000-02-03                     Senate Journal                      Page 2183
SB 246                                                                       
An Act relating to claims against permanent fund                              
dividends to pay certain amounts owed to state                                 
agencies and to fees for processing claims against                             
and assignments of permanent fund dividends; and                               
providing for an effective date.                                               
                                                                               
was read the first time and referred to the State Affairs and Finance          
Committees.                                                                    
                                                                               
Fiscal note published today from Department of Labor.                          
                                                                               
Governors transmittal letter dated February 2:                                 
                                                                               
Dear President Pearce:                                                         
                                                                               
Some state agencies are currently allowed to seek from individuals             
overdue payments of money due the state through a simple                       
administrative collection of permanent fund dividends. But most state          
agencies still need to use a time consuming and costly court action            
to attach an individual's permanent fund dividend. It makes sense for          
all our state agencies to have access to this "fast track" method of           
collecting from a person who receives a permanent fund dividend                
while in arrears with payments lawfully due to the state. This bill I          
transmit today accomplishes this change in law.                                
                                                                               
Examples of agencies now able to attach permanent fund dividends               
with a simple administrative action include the Department of Health           
and Social Services, for reimbursement of certain court-ordered                
treatment, and the Alaska Commission on Postsecondary Education                
for student loans in default.                                                  
                                                                               
But the Department of Labor and Workforce Development, for                     
example, must file a small claims court action or seek criminal                
prosecution to recover overpaid unemployment insurance benefits and            
fraud penalties. Partly as a result of this cumbersome method, the             
department estimates the state is owed  $4.5 million in outstanding            
benefits received by fraudulent means, $3.6 million in statutory               
penalties, and $1.6 million for overpaid benefits. Not only will this          
bill increase recovery rates, but because these owed benefits are paid         
by employer taxes, it will reduce employer tax rates within the state.         

2000-02-03                     Senate Journal                      Page 2184
SB 246                                                                       
A state agency would not be required to use these new procedures               
for collection. Any agency that elects to use the new procedures               
would be required to notify the individual of the claim with a fair            
opportunity for a hearing at which the individual could contest the            
agencys claim to the permanent fund dividend. If a hearing is not              
requested or the claim is resolved in favor of the state agency, the           
agency may collect the money from the individual's permanent fund              
dividend without filing a court action.                                        
                                                                               
Passage of this measure gives state agencies an additional tool to             
recover money that is lawfully owed to the state under existing state          
laws.                                                                          
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor