Legislature(1997 - 1998)
02/10/1998 01:32 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 254 - LEVY ON PERMANENT FUND DIVIDEND
CHAIRMAN LEMAN announced SB 254 to be up for consideration. He
said the Committee amended it last time over his objection to
reduce the amounts available to go to creditors from 100 percent
down to 70 percent and approved a conceptual amendment that dealt
with the garnishment fee.
TAPE 98-5, SIDE B
He said attorneys had drafted a memo explaining the problems of
equal protection if the fee is applied only to some claimants and
not to others. The committee substitute had been drafted to be
consistent with equal protection which might not be consistent with
Senator Kelly's intent when he made the motion.
SENATOR MACKIE moved to adopt the CSSB 254 71-b-Cooke 2/7/98.
There were no objections and it was so ordered.
SENATOR MACKIE asked if there was just a flat five percent fee
across the board.
CHAIRMAN LEMAN nodded yes.
SENATOR KELLY said as he understands it when a dividend check is
attached they have to send a certified letter to the person with a
return receipt to the person who made the application.
MS. NANCI JONES, Director, Permanent Fund Division, said they sent
letters.
SENATOR KELLY said he thought the $2 fee was outrageously low and
that the State was not covering the cost of postage on the 20
percent of Permanent Fund checks that are being garnished.
MS. JONES explained that not all letters are certified, just in
certain circumstances. If they are sending batch letters, they use
electronic tape. Sometimes they use certified postage when sending
correspondence to remote areas to make sure the person actually
gets it. For the most part they use the cheapest mail rate
possible which is the bulk rate.
SENATOR KELLY asked if they have to notify the applicant that the
check is being garnished.
MS. USERA said they do notify individuals in a separate letter.
SENATOR KELLY asked her to explain existing language that says,
"Upon receipt of a writ by certified mail, return receipt
requested, the Commissioner shall deliver that portion of a
dividend executed upon to the court along with the case and
number."
MR. VINCE USERA, Assistant Attorney General, answered that his
impression is that the requirement for certified mail is on a
request coming into the Commissioner for garnishment of the PFD.
The requirement for notification of the individual whose check is
being garnished is not necessarily by that same means.
SENATOR MACKIE said his concern with the five percent across the
board is that amount of money is not very much to any one
individual, but is a lot collectively. He appreciated the
amendment that was made to try and recover some of the costs. He
questioned Ms. Jones about her department's ability to investigate
fraudulent applications.
MS. JONES answered that they have an investigative unit which
investigates all reported fraud tips. They don't have the means to
do any statistical analysis.
Number 500
SENATOR MACKIE asked if they were able to handle investigating all
their tips.
MS. JONES said they were so far able to handle all of them.
Administratively they go after the fraud and assess the person and
start collection procedures. As far as criminal activity, they
don't have priority because of the small amounts of money involved.
Probably 95 percent of their cases are from tips; the others are
from inside computer edits.
SENATOR MACKIE asked if they were not getting cooperation from the
courts in actually prosecuting people who have illegally received
PFD checks.
MS. JONES replied that was right because the dollar amount involved
is usually not big enough. There is the occasional case for
$20,000 or some sophisticated fraud.
SENATOR MACKIE said to him it's theft from the people and the
State. He said they prosecute people for a lot less than stealing
$1,300.
MS. JONES said the district attorney's dockets are full and other
crimes like homicide take precedent.
SENATOR MACKIE asked her to send him a letter detailing her
frustrations in this area.
CHAIRMAN LEMAN said he would like to see a few high profile cases
advertised (in the news media) as a deterrent.
SENATOR MACKIE said he also thought it was incumbent upon the
legislature to provide them the resources to do that, too.
SENATOR LEMAN asked if there was a reward for the tipsters.
MS. JONES replied that there was no reward, just anonymity.
SENATOR MACKIE asked if she would include in her letter other ways
they could add to their information on fraudulent activities.
MS. JONES said they have been working with the Social Security
Administration to try and track valid social security numbers.
They started out with 10,000 incorrect social security numbers.
That number is now down to 1,200 which they are scrutinizing very
carefully. In a great number of cases it was a mistake and the IRS
had given them incorrect information, also.
MS. JONES asked if it was possible in section 3 to mention that the
five percent would actually be deposited to the Dividend Fund,
because now any unused money that is collected as the fee is put in
the pot and makes all of our dividends larger. This proposal
siphons it off into the general fund. So they actually lose money
with this bill even though what they currently get doesn't cover
their costs.
SENATOR MAKCIE asked what existing statute said about the $2.
MS. JONES explained that it is a program receipt and it's
nonexistant until it is collected. Now she has to estimate how
much in fees she will collect and that amount is appropriated to
them. If she doesn't pick up that amount, she doesn't get to use
that money.
Number 355
SENATOR KELLY said he was looking for a way to cover all agencies
costs, not just the Permanent Fund. He didn't mind them continuing
to receive the $2 fee per claim.
SENATOR KELLY asked if their operating money came from the general
fund or was it special Permanent Fund money.
MS. JONES replied that it's Permanent Fund money. Everything goes
back to the Fund and is recalculated. She asked how they wanted to
deposit the fee.
SENATOR MACKIE said he thought it would be through program
receipts.
SENATOR KELLY asked if the Division supported the bill.
MS. JONES said yes.
SENATOR MACKIE moved to pass CSSB 254 L&C from Committee with
individual recommendations. There were no objections and it was so
ordered.
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