Legislature(1993 - 1994)

02/11/1994 01:15 PM House JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                   
  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.                    

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