SENATE BILL NO. 145 "An Act relating to the recovery of overpayments of day care assistance and child care grants; and providing for an effective date." 9:12:50 AM Co-Chair Kelly MOVED to ADOPT proposed committee substitute for SB 145, Work Draft 29-GS2769\W (Glover, 3/24/16). Co-Chair MacKinnon OBJECTED for discussion. ERIN SHINE, STAFF, SENATOR ANNA MACKINNON, explained the change in the CS. She detailed that previously the bill allowed Permanent Fund Dividend (PFD) garnishment for daycare assistance and childcare grants overpayments. She elaborated that during a hearing of the companion bill in the other body [House] it had come to light there were two other benefit programs (Senior Benefits Program and Alaska Heating Assistance Program) under public assistance that did not have the ability. The CS allowed the Division of Public Assistance to garnish for all public assistance programs. Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO further OBJECTION, it was so ordered. 9:14:32 AM SEAN O'BRIEN, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (DHSS), spoke in support of the change in the CS. He explained it was primarily to ensure the option for PFD garnishment was made available across all public assistance programs. The division felt the consistency was important for the sake of equity and for administering the program. Co-Chair MacKinnon asked if the fiscal notes needed to be updated. Mr. O'Brien replied that the $500,000 receipt recovery was probably still very close [to accurate]. The department had not submitted a revised fiscal note because the vast majority of anticipated funds would come through the childcare program. The other two programs that would be impacted by the amendment were the Senior Benefits Program and the Alaska Heating Assistance Program. The department's analysis had not seen an appreciable change. The fiscal note currently showed an anticipated recovery period of $500,000, which DHSS felt would cover all of its programs. He reiterated the amount was an estimate. Senator Olson observed that there had been a change from federal funds to general funds in the fiscal note. Mr. O'Brien responded that childcare funds were federal funds. He specified if the department was unable to recoup those funds the difference would have to be paid with general funds. If the department recouped the federal funds it would offset the cost "and transfer those that way" as opposed to potentially losing the general funds, which the department would have to pay back if it did not recoup the federal funds. 9:17:35 AM Senator Olson believed the fiscal note showed a cost of $500,000 in general funds. Mr. O'Brien answered the General Fund could take a hit of $500,000 if the department did not have the ability to recoup the federal funding. Senator Olson asked for verification the department looked at the issue as positive. Mr. O'Brien responded that the department looked at the item as a neutral offset. Co-Chair MacKinnon asked for a review of the three fiscal notes. Vice-Chair Micciche relayed he had two fiscal notes for the legislation. 9:18:24 AM AT EASE 9:21:34 AM RECONVENED Co-Chair MacKinnon explained that Fiscal Note 3 had replaced Fiscal Note 1. Vice-Chair Micciche addressed Fiscal Note 2 from the Department of Revenue, which included zero fiscal impact. Fiscal note 3, which had replaced Fiscal Note 1 from the Department of Health and Social Services showed federal receipts of $500,000 per year and General Fund program authority of $500,000. He understood the committee had questions about the absolute impact of the particular fiscal note. Co-Chair MacKinnon clarified the note showed reduction of $500,000 in federal receipts and a new expenditure of $500,000 in general funds. She asked for the accuracy of her statement. Vice-Chair Micciche replied he believed the note showed a wash of federal receipts offsetting [general funds]. Co-Chair MacKinnon conveyed she would speak to the Legislative Finance Division about zeroing out the general funds associated with the note. SB 145 was HEARD and HELD in committee for further consideration.