Legislature(1993 - 1994)
02/11/1994 01:15 PM House JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 331 - USE PFD'S TO RECOVER WELFARE OVERPAYMENTS Number 023 REP. CYNTHIA TOOHEY, Prime Sponsor of HB 331, testified that the legislation speaks about permitting claims on permanent fund dividends (PFD'S) for defaulting on public assistance overpayments. She said this bill would give the Department of Health and Social Services (DHSS) the authority to collect delinquent public assistance overpayments by administering the garnishment of an individual's PFD. Rep. Toohey explained that currently there are outstanding debts in excess of $1 million and frequently individuals will agree to pay back the overpayments, but don't, and HB 331 will enable DHSS to recover overpayments by a less expensive, more expedient administrative procedure. REP. TOOHEY told the committee HB 331 is supported by the DHSS and the Department of Revenue, and in addition, there are two positive revenue generating fiscal notes from DHSS, and a zero fiscal note from the Department of Revenue. Number 083 REP. PHILLIPS asked if there were any conflicting statutes that would disallow or prevent this from happening. Number 103 JAN HANSEN, Director, Public Assistance, DHSS, said no, but there are other priorities ahead of them in statute that they would fall behind. Number 120 REP. DAVIDSON asked Rep. Toohey if HB 331 would apply when the overpayment was the result of bureaucratic or administrative error. Number 130 MS. HANSEN clarified that HB 331 would apply to the AFDC program, under which they are required to pursue claims whether it is the agency's error or the client's error. She said in regards to the food stamp program that they cannot require repayment, which means they would not be garnishing for food stamp overpayments that were the result of agency error. Number 140 Rep. Davidson added for the record that because we are dealing with people who are right on the cutting edge of poverty, we know when they get an extra amount that it is probably going to be spent one way or another. He asked if HB 331 would affect children receiving AFDC by garnishing their PFD's. Number 152 MS. HANSEN replied no; HB 331 doesn't apply to anyone who is on AFDC, it only applies for the repayment of claims of people whose cases are now closed. She said if an individual is still on AFDC, then they do a reduction in their benefits of ten percent, and under HB 331, they would only garnish the PFD of the adults in the household, and even on closed cases they would not garnish the PFD check of any child. Number 174 REP. DAVIDSON asked if it was correct that there was $1 million in outstanding claims. Number 179 MS. HANSEN responded that there are approximately 750 cases, with up to $500,000 in outstanding claims; however, there is no way all of that is going to be collectable since many of these people have long since left the state of Alaska. She referred the committee to the fiscal note, which shows that the collection amounts are small. She added that they contact people so they know their PFD may be garnished, and some of those people may choose to make the payment rather than have their PFD garnished. Number 216 REP. PORTER asked Ms. Hansen to describe a typical overpayment case. Number 221 MS. HANSEN replied that they are talking about agency and client-caused and not necessarily fraudulent cases. She explained that some of it is because of technicalities, the agency sometimes has to prospectively in advance determine how much income a person's going to have and use that against their case, and then later if their income turned out to be higher than that, the agency is required in the future to place a claim to even out what that was. Ms. Hansen explained another scenario where it would be considered agency error if the client told the agency that they went to work and sent in a paycheck, and the worker (agency) didn't call the employer to verify whether there was another paycheck, and in fact there were more earnings than had been reported. She described other situations which could cause overpayments. Number 258 REP. PORTER commented that one of the criticisms on HB 331 could be that the agency should just clean up its act so there wouldn't be any overpayments, but Ms. Hansen's explanation clearly shows that isn't possible because of the situations she described. Number 262 REP. NORDLUND asked why there was no section in HB 331 regarding the section in law that talks about the order payments may be deducted from PFD to AFDC, and referred to the list that is currently in statute. Number 272 MS. HANSEN replied that this will not appear in the list, and the last part of the list refers to "other" agencies that have the authority to garnish PFD's, and HB 331 would give them the authority to fall under "other." She added that the agency hasn't asked for a particular priority in the listing, other than lumped with the "other," and the reason is that if they did so it would require additional work and programing on the part of the Permanent Fund Division, and they wouldn't be able to get the benefit of that this year. Number 290 MARVEEN COGGINS, legislative aide to Rep. Toohey, clarified that the section that has the list in it is followed by a section that expands on the student loan collection process, and HB 331 would be a new section which follows that section, so it would be a separate section. Number 301 REP. JAMES made a motion to move HB 331 out of committee with individual recommendations and fiscal notes attached. Hearing no objection, it was so moved. Number 344 REP. PORTER announced that HJR 22 was next on the agenda.