Legislature(1999 - 2000)
03/16/2000 03:00 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 337
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.
DWIGHT PERKINS, DEPUTY COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, commented that 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 State agencies to have
access to the "fast track" method of collecting from a
person who receives a dividend while in arrears with
payments lawfully due to the State. The proposed bill
accomplishes that change in law.
He continued, a State agency would not be required to use
the 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 agency's
claim to the 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 dividend without
filing a court action. Mr. Perkins emphasized that passage
of the measure gives State agencies an additional tool to
recover money that is lawfully owed to the State under
existing law. He outlined the differences between the three
versions of the bill contained in member's packets.
Co-Chair Therriault questioned the Department of Labor and
Workforce Development's fiscal note. Mr. Perkins explained
the change between the various totals for the five years.
He noted it calculated interest penalties from the received
money.
RON HULL, DEPUTY DIRECTOR, EMPLOYMENT SECURITY DIVISION,
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT, added the
first page of the fiscal note represents the current fiscal
year.
Mr. Perkins pointed out that this was originally the
Department of Labor and Workforce Development's legislation.
In the process, other State agencies believed that more was
needed. The Administration does not have a problem with the
State Affairs version which includes other departments.
Representative J. Davies requested an example of a
"hypothetical situation" resulting in a person owing money
through the recommended legislation. Mr. Hull replied that
there are a number of methods in which benefits are over
paid. The largest problem is in collection of over paid
unemployment. Cross match information often shows that a
recipient is working when they do not claim that they are.
That would be a fraud case. Employers send quarterly
documents indicating how much an employee was paid per week.
The appeal process is undertaken and it could then be
transferred to a criminal court. Hearing officers initially
address the case. Mr. Hull stated that if there is an
appeal and it is upheld, the claimant could go to Superior
Court. He noted that the due process issue is well covered.
Representative J. Davies pointed out that the claimant has
30 days to appeal. He asked if the claimant did not respond
in that period, would they then be garnished. Mr. Hull
explained that the Department is not "heavy handed". Before
the Department approaches this, the claimant must first be
120 days in arrears. Taking the dividend is the
Department's last resort.
Co-Chair Therriault attempted to clarify the process
undertaken to make a garnishment. Mr. Hull explained that
to garnish the dividend, would depend on why there was no
response.
Mr. Perkins explained that the address used by the
Department is the one used to mail the dividend to. Co-
Chair Therriault asked if only the garnished persons would
be the ones who had established a payment plan. Mr. Hull
explained that not everyone has set up a payment plan and
that all recipients could be garnished. Mr. Hull added that
the Division's collection rate on the overpayment area is in
the 90% percentile. Problems exist with the fraudulent
payments.
Representative Bunde voiced concern that notification did
not take place through a registered letter. Mr. Hull
replied that if the person could show that they had not
received the mail or had not opened it, then their repeal
rights are reopened.
Vice Chair Bunde asked about the continuity of the
procedure. Mr. Hull replied that all procedures used by the
Division are in writing.
Representative J. Davies inquired the number of cases this
amount of revenue represents. Mr. Hull replied that right
now, the Division is working on cases that are six years
old. Yearly, there are about two thousand people, half of
which could be fraudulent. Fraud for 1997 was $1.8 million
dollars; for 1998 it was $1.5 million dollars.
Co-Chair Therriault inquired how the garnishment process was
handled.
NANCI JONES, DIRECTOR, ALASKA PERMANENT FUND DIVIDEND
PROGRAM, DEPARTMENT OF REVENUE, explained that when a State
agency files a garnishment, that case is given a number to
track it. Any person can track that with the assigned
number and it can be tracked through the department claiming
the dispute. Only if there is a release from the agency,
will the action can be stopped. The Permanent Fund Dividend
Division would work directly with the Department of Labor
and Workforce Development.
Representative Foster MOVED to HB 337 out of Committee with
individual recommendations and with the accompanying fiscal
notes. There being NO OBJECTION, it was so ordered.
CS HB 337 (JUD) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Labor and Workforce Development dated 2/4/00
and a zero note by the Department of Revenue dated 2/23/00.
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