02/28/1994 01:30 PM House FIN

  HB 331    An  Act  relating  to  claims  on  permanent  fund                 
            dividends   for   defaulted    public   assistance                 
            overpayment.                                                       
                                                                               
            HB 331  was reported out  of Committee with  a "do                 
            pass" recommendation and with two fiscal notes  by                 
            the Department of Health and Social Services dated                 
            2/22/94 and one zero fiscal note by the Department                 
            of Revenue dated 2/22/94.                                          
  HOUSE BILL 331                                                               
                                                                               
       "An Act relating to claims  on permanent fund dividends                 
       for defaulted public assistance overpayment."                           
                                                                               
  REPRESENTATIVE CYNTHIA  TOOHEY explained that  HB 331  would                 
  give  the  Department  of Health  and  Social  Services, the                 
  administrative authority to garnish permanent fund dividends                 
  of   individuals  who   have   received  public   assistance                 
  overpayment and are delinquent in repaying that debt.                        
                                                                               
  She added  that  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  can be                 
  reduced as a  means of collection,  but if a  person is  off                 
  assistance,  collection becomes  difficult.   The Department                 
  currently   has  over   $1  million   in   delinquent  debt.                 
  Collection through the  court system  can be time  consuming                 
  and costly.   HB 331  would allow the  Department to  pursue                 
  collection in the  same manner  in which delinquent  student                 
  loans are  pursued.   Representative Toohey  added that  the                 
  legislation is  supported by  the Department  of Health  and                 
  Social Services.                                                             
                                                                               
  JAN  HANSEN,   DIRECTOR,  DIVISION  OF   PUBLIC  ASSISTANCE,                 
  DEPARTMENT OF HEALTH  AND SOCIAL SERVICES, advised  that the                 
                                                                               
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  amount  of  debt  referenced  in  the  proposed  legislation                 
  originates  from  closed  cases  estimated  to   total  $500                 
  thousand dollars.                                                            
                                                                               
  Representative Brown  questioned the  number of  persons who                 
  would  receive  an overpayment  as  a  result of  an  agency                 
  mistake.  Ms.  Hansen replied that  last year the number  of                 
  errors within the  Aide to Families with  Dependant Children                 
  (AFDC) program  was 204.   These  cases were  due to  client                 
  error although 106 resulted from agency error.  She stressed                 
  that recuperation resulting from an agency error is mandated                 
  by federal regulations.                                                      
                                                                               
  Representative   Parnell   asked   if   there   are    other                 
  administrative agencies  which allow  a "Rite of  Execution"                 
  from the court, following a judgement  on the Permanent Fund                 
  Dividend allocation.                                                         
                                                                               
  THOMAS  C.  WILLIAMS,  DIRECTOR,  PERMANENT  FUND  DIVISION,                 
  DEPARTMENT  OF  REVENUE,  responded  that  there  are  other                 
  agencies with that authority; the  Alaska Commission on Post                 
  Secondary  Education  has  an   identical  provision.     In                 
  addition,   Child  Support   Enforcement   can  service   an                 
  administrative  levy  to  collect.   Representative  Parnell                 
  asked which agencies  supercede one  another.  Mr.  Williams                 
  stated that the Alaska Statutes define a priority listing.                   
                                                                               
  Representative Hanley clarified the  order of prioritization                 
  according to Alaska Statute 43.23.065 (b).                                   
                                                                               
       1.   Child support.                                                     
       2.   Court ordered restitution.                                         
       3.   Student loans.                                                     
       4.   Court ordered fines.                                               
       5.   Debt owed to an individual agency.                                 
                                                                               
  Representative   Hanley   understood   that   the   proposed                 
  legislation would  be placed  in category  #5; Mr.  Williams                 
  agreed.                                                                      
                                                                               
  Representative Brown asked the length of time the Department                 
  of Health and Social Services would  need to determine if an                 
  overpayment had been made.  Ms.  Hansen explained it usually                 
  occurs  quickly, although time  limits are established which                 
  the  Department  cannot  exceed.     The  limits  have  been                 
  established by federal mandates.                                             
                                                                               
  Ms. Hansen pointed out that in order to turn an account over                 
  for garnishment, the  Department is  required to notify  the                 
  person, giving  them the opportunity to appeal and repay the                 
  overpayment back.  The length of  the process depends on the                 
  volume of claims being handled by the Department.                            
                                                                               
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  Representative Brown asked if the proposed legislation would                 
  affect  the  Adult  Public Assistance  Program  (APA).   Ms.                 
  Hansen  replied  that  the  legislation  was  drafted   with                 
  collection  terms  for  the Food  Stamp  and  AFDC programs.                 
  Currently, overpayment are  not being  collected on the  APA                 
  program.  In  the future, if  overpayment claims were to  be                 
  established in that program, then it would be affected.                      
                                                                               
  Representative  Martin questioned  the fiscal  costs to  the                 
  Permanent  Fund  Division.    Mr.  Williams  explained  that                 
  processing  costs  would depend  upon  the number  of levies                 
  received.  Ms.  Hansen pointed out  there would be no  extra                 
  charge  to  the Department  of  Health and  Social Services.                 
  Currently, there is a  staff person whose function it  is to                 
  collect overpayment.                                                         
                                                                               
  Representative  Hanley  MOVED  to  report   HB  331  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.   There  being NO OBJECTIONS,  it                 
  was so ordered.                                                              
                                                                               
  HB  331  was reported  out  of  Committee with  a  "do pass"                 
  recommendation and with  two fiscal notes by  the Department                 
  of  Health  and Social  Services  dated 2/22/94  and  a zero                 
  fiscal note by the Department of Revenue dated 2/22/94.