03/08/1995 01:35 PM House FIN

  HOUSE BILL 108                                                               
                                                                               
       "An Act relating to claims  on permanent fund dividends                 
       for defaulted public assistance overpayment."                           
                                                                               
  MARVEEN COGGINS, STAFF,  REPRESENTATIVE TOOHEY, stated  that                 
  HB  108  would give  the  Department  of Health  and  Social                 
  Services the  administrative authority to  garnish permanent                 
  fund  dividends  of  individuals who  have  received  public                 
  assistance overpayments  and are delinquent  in repaying the                 
  debt.                                                                        
                                                                               
  She added, frequently persons receiving overpayment agree to                 
  repay the debt, but fail to do so.  If a person  is still on                 
  public assistance, the person's benefit  could be reduced as                 
  a means of  collection, but if  a person is off  assistance,                 
  collection becomes difficult.  There  is currently over half                 
  a million dollars in outstanding debt due to the Department.                 
                                                                               
                                                                               
  Representative   Brown   questioned   the    percentage   of                 
  overpayments made as a mistake by the Department rather than                 
  personal fraud.                                                              
                                                                               
  ELMER LINDSTROM,  SPECIAL ASSISTANT TO  COMMISSIONER PERDUE,                 
  DEPARTMENT OF HEALTH AND SOCIAL SERVICES, explained that the                 
  breakdown  between  client generated  errors  as  opposed to                 
  Department errors  was not  available.   He  added that  the                 
  State is  expected by the  federal government to  recoup the                 
  charges.   Mr. Lindstrom  stated that  Alaska Families  with                 
                                                                               
                                2                                              
                                                                               
                                                                               
  Dependant  Children   (AFDC)  would   be  affected  by   the                 
  legislation.    Representative  Brown  elaborated  that  the                 
  program would cover AFDC, food  stamps and the Adult  Public                 
  Assistance (APA) program.                                                    
                                                                               
  Mr.  Lindstrom  responded  that the  food  stamp  program is                 
  entirely federally funded; whereas, the State would share in                 
  the  revenue  recoupment  of  AFDC  claims  equal  match  of                 
  50%/50%.   Mr.  Lindstrom understood  that  the  legislation                 
  would not apply  to the APA  program.  Representative  Brown                 
  quoted a letter  from Curtis Lomas, Welfare  Reform Program,                 
  Department of  Health and  Social Services,  indicating that                 
  the APA program would be affected.  Mr. Lindstrom agreed Mr.                 
  Lomas was correct.                                                           
                                                                               
  Representative Brown asked which programs would  be covered.                 
  Mr. Lindstrom  referenced Section  #1, "Claims  on defaulted                 
  public assistance overpayment".  Discussion followed on  the                 
  defaulted overpayments.   Representative  Brown pointed  out                 
  that the title did not define "overpayment" without specific                 
  reference.   She voiced  her concern that  these people were                 
  the State's  most vulnerable  and  that they  should not  be                 
  included in the proposed legislation.                                        
                                                                               
  Mr.  Lindstrom   commented  that   although  those   persons                 
  receiving  Adult Public  Assistance  were  indicated in  the                 
  previous  legislation,  it   was  not  the  intent   of  the                 
  Department that the  fiscal note for  HB 108 would apply  to                 
  the  APA program.   He pointed out that  the language in the                 
  bill was "permissive" and that the Department "may" exercise                 
  authority to collect the payments.   He stressed that it was                 
  not the intention of the legislation.                                        
                                                                               
  Representative Brown distributed Amendment  #1.  [Attachment                 
  condition  of  notification  within   thirty  days  to   the                 
  individual  who  received  overpayment.     Co-Chair  Hanley                 
  pointed out that in  a hypothetical case of fraud,  it would                 
  be difficult to detect the  overpayment within a thirty  day                 
  time  span.   Discussion  followed  among Committee  members                 
  regarding notification of overpayment.  Representative Brown                 
  offered to redraft  the amendment  and offer it  at a  later                 
  date.                                                                        
                                                                               
  Representative  Mulder  MOVED  to  report   HB  108  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  HB  108  was reported  out  of  Committee with  a  "do pass"                 
  recommendation and with  two fiscal notes by  the Department                 
  of Health and Social Services and a zero fiscal note  by the                 
                                                                               
                                3                                              
                                                                               
                                                                               
  Department of Revenue dated 2/23/95.