Legislature(1993 - 1994)
02/28/1994 01:30 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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 2 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. 3 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.