Legislature(1995 - 1996)

03/05/1996 02:04 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 TAPE 96-20, SIDE B                                                            
 Number 001                                                                    
                                                                               
 CO-CHAIR BUNDE announced the next bill on the agenda was HB 451.              
                                                                               
 HB 451 - PROHIBIT DUPLICATE PUBLIC ASSISTANCE                               
                                                                               
 DENNIS DeWITT, Legislative Assistant to Representative Eldon                  
 Mulder, presented the following sponsor statement:  "House Bill 451           
 requires the use of fingerprints for identification of welfare                
 recipients, just as the federal government requires fingerprinting            
 of its employees.  Today, we require teachers, substitute teachers,           
 bank employees and many other workers to be fingerprinted.                    
 Fingerprinting has long been established as a valid method of                 
 identification.  Electronic fingerprinting avoids the mess of ink             
 used in the traditional fingerprinting.  It is also much easier and           
 quicker to perform.  House Bill 451 also adds two new sections to             
 our laws that makes it a violation to seek or receive duplicate               
 benefits under the General Relief program and the Aid to Families             
 with Dependent Children program.                                              
                                                                               
 "House Bill 451 would establish a pilot program to use electronic             
 fingerprinting to identify applicants for General Relief Assistance           
 and Aid to Families with Dependent Children.  This will allow the             
 state to be certain that no one is able to enroll under multiple              
 names, using fingerprints for absolute identification.  As state              
 and federal programs limit duration of benefits, this will enable             
 Alaska to keep accurate track of recipients and to work with other            
 states to determine if applicants have received federal funded                
 benefits outside Alaska.                                                      
                                                                               
 "Electronic fingerprinting is a simple procedure, both for the                
 applicant and the individual taking the fingerprint.  The process             
 requires a person put their index finger and thumb on a glass                 
 screen.  A computer takes a picture creating an accurate and                  
 permanent record.  There is no messy ink usually associated with              
 fingerprinting.  The fingerprint can be saved in a data bank and              
 used to compare with current and future applicants.                           
                                                                               
 "Electronic fingerprinting of welfare recipients is not a new idea.           
 The states of California, New York and Pennsylvania are currently             
 using this system.  Connecticut, Massachusetts, Arizona and                   
 Washington are all in the process of moving toward this system.               
                                                                               
 "While New York and California are certainly larger than our state,           
 the notion of how much they've been able to save is an important              
 issue to consider, and relatively, we think we can save similar               
 kinds of dollars.                                                             
                                                                               
 "New York saved $500,000 in a two county pilot program and has                
 expanded the program statewide.  New York City alone will save $35            
 million with this program.                                                    
                                                                               
 "California began its pilot program in Los Angeles County in 1991             
 with its general assistance program.  It was so successful that in            
 1994 they expanded it to the AFDC program.  The independent                   
 consulting firm of Ernst & Young evaluated this program in Los                
 Angeles and recommended it for implementation statewide.                      
                                                                               
 "House Bill 451 gives Alaska the opportunity to take the lead in              
 preventing welfare fraud by developing a system that can identify             
 our applicants and compare them to those who have received benefits           
 in other states."                                                             
                                                                               
 MR. DeWITT mentioned that Washington State has legislation                    
 currently to investigate a pilot program that uses the driver                 
 license as the key for identification.  It requires a thumb print             
 on the driver license and then requires the driver license as proof           
 of identification for any state benefit.                                      
                                                                               
 Number 105                                                                    
                                                                               
 CO-CHAIR BUNDE said he assumed there was a fair amount of fraud, so           
 this type of system would save the state money in avoiding                    
 duplicate benefits.  He noted however, the fiscal note does not               
 reflect any savings.                                                          
                                                                               
 MR. DeWITT noted he had reviewed the fiscal notes and felt the                
 costs were a little excessive, but he thought it was something that           
 could be addressed in the Finance Committee.  In terms of the                 
 amount of fraud, he thought the department should be and has been             
 commended by the federal government for its handling of fraud.  The           
 process has been changed from a paper process into a computer                 
 generated age where changing documents and forging driver licenses            
 for example, which have pictures on them is fairly easy.  He cited            
 a personal experience with his 13-year-old daughter who had her               
 identification stolen and approximately a month ago, she got a                
 letter a collection company stating she needed to pay up on the               
 check she had cashed using her driver license as identification and           
 verified by a bank teller, and the check had bounced.  He said                
 first off, his 13-year-old daughter doesn't have a driver license             
 and second, he believed that most bank tellers were fairly well               
 trained to look at a picture on a driver license, when accepting it           
 as identification.  He concluded that the ability to forge the                
 documents used today for identification is improving substantially,           
 which is one of the reasons Washington is moving toward one                   
 identification card using fingerprints for all benefit                        
 applications.  The idea behind this legislation is to get on the              
 front edge of fraud being seen in a lot of other places, and to               
 begin to build a data base so as the limitation of benefits is                
 being considered at both the state and federal level, Alaska has a            
 data base against which future applications can be compared.                  
                                                                               
 CO-CHAIR BUNDE commented he had been at a restaurant one time                 
 having lunch, paid with a credit card and got the wrong credit card           
 back.  He used that credit card for three weeks with no problem and           
 didn't realize the mistake until he received a billing statement.             
 He encouraged Mr. DeWitt to follow up on the fiscal impact and the            
 savings through increased efficiency.                                         
                                                                               
 Number 285                                                                    
                                                                               
 REPRESENTATIVE BRICE asked Mr. DeWitt how many people the                     
 Department of Health & Social Services thought were double-dipping            
 in this manner.                                                               
                                                                               
 MR. DeWITT replied there was no absolute way of identifying it.  He           
 explained the legislation sets up a small pilot project to find out           
 if administratively it could be carried out.  One of the problems             
 in terms of specific identification is, for example in Anchorage              
 there is only one enrollment office.  They had considered having a            
 project in both Anchorage and Fairbanks to compare the two and gain           
 a lot more information, but the cost reflected on the fiscal note             
 made it difficult to push for both locations.                                 
                                                                               
 REPRESENTATIVE BRICE asked what the current fraud rate was in the             
 Aid to Families with Dependent Children program.                              
                                                                               
 CO-CHAIR BUNDE indicated the Director of Public Assistance was in             
 the audience and would be testifying.                                         
                                                                               
 REPRESENTATIVE BRICE asked if Mr. DeWitt had looked into other                
 types of identification such as retinal scanning.                             
                                                                               
 MR. DeWITT replied they had not, but added that Representative                
 Mulder met with state house members from Pennsylvania who shared              
 with him the success they have had with this concept.                         
 Representative Mulder had contacted other states, but this process            
 seemed to be a simple, nonintrusive methodology of developing an              
 accurate data base.  A factor in selecting the electronic                     
 fingerprinting process was that a number of other large states were           
 moving in this direction.                                                     
                                                                               
 CO-CHAIR TOOHEY surmised the expense of retinal identification                
 would far exceed other identification systems.                                
                                                                               
 REPRESENTATIVE BRICE said not necessarily; it does the same thing             
 as a fingerprint.                                                             
                                                                               
 Number 433                                                                    
                                                                               
 REPRESENTATIVE ROBINSON asked who would be doing the fingerprinting           
 and if the idea was for the divisions to have the equipment?                  
                                                                               
 MR. DeWITT said the equipment is very simple to operate.  It's                
 basically a matter of punching bottoms on a computer screen.                  
                                                                               
 REPRESENTATIVE ROBINSON asked if the main thrust for setting this             
 up was to deal with fraud.  She asked if the fraud rate of the                
 other states had been compared to Alaska's.                                   
                                                                               
 MR. DeWITT responded the fraud rates had not been compared, but               
 they did look at the savings other jurisdictions gained, which were           
 substantial compared to the money spent.                                      
                                                                               
 CO-CHAIR BUNDE asked if he was correct in assuming there were two             
 areas of savings -  the prevention of fraud and the prevention of             
 paperwork, since this would be done electronically.                           
                                                                               
 MR. DeWITT said it was his belief that would be the case over time.           
 Initially, in the pilot program no savings is expected.  However,             
 one of the questions that remains open regarding a limitation of              
 benefits is what the federal penalties will be for not being able             
 to identify an individual who has exceeded the benefit period.                
 This system gives an absolute way to identify the person.  He noted           
 there were several bills contemplating a limitation of benefit time           
 in this legislature.  The real issue is how to keep track of an               
 individual between this benefit period and a new benefit period               
 three or four years downstream and how to aggregate those.  This              
 system has the ability to do that.                                            
                                                                               
 CO-CHAIR BUNDE questioned the error rate.                                     
                                                                               
 MR. DeWITT responded that of the individuals he has talked with,              
 none of them have raised that as an issue.  He noted that                     
 electronic fingerprinting is used in Alaska.  The correctional                
 system, state troopers and court system all find it to be very                
 effective; none of them have indicated a problem with error rate.             
 As a matter of fact, the error rate on electronic fingerprinting is           
 substantially less than with the ink fingerprints because it is               
 much more difficult to distort the print by moving the finger on a            
 computer-driven system as opposed to ink and paper.                           
                                                                               
 Number 601                                                                    
                                                                               
 LIZ DODD, Board Member, American Civil Liberties Union of Alaska;             
 and National Board Member, American Civil Liberties Union,                    
 testified that she had learned about HB 451 just a few days ago and           
 hadn't had a lot of time to involve the national experts who were             
 well versed in this issue.  She said that most places where                   
 fingerprinting is used have survived court challenges in order to             
 make sure that the legal threshold for the violation of privacy has           
 been met before fingerprinting is allowed.  That's why it is not              
 really proliferated throughout society, but in very specific                  
 places.  Generally, before a person's privacy is violated, there              
 has to be a real concrete need for gathering the information.  This           
 bill represents a speculative need.  It speculates there might be             
 legislation that limits welfare benefits to a certain period time,            
 whether that be in the state of Alaska or in certain states, so               
 there would be a need to determine when a person got off benefits,            
 when the benefits expired and in what state that happened.   At               
 this point, however, that is speculative.  To be fingerprinting               
 people, violating their rights to privacy, on the chance that this            
 information will be needed in this state to work with other states            
 to make sure this type of fraud doesn't happen, is a speculative              
 harm weighed against a concrete constitutional right of privacy.              
                                                                               
 Number 726                                                                    
                                                                               
 MS. DODD further explained that if the federal government passes              
 welfare reform that limits the benefit time, she was certain there            
 would be enforcement provisions.  Various measures will be                    
 discussed by individuals who have a high level of expertise and a             
 good understanding of what electronic fingerprinting means in terms           
 of constitutional rights.  Also, no one has been able to say there            
 is a huge problem in Alaska.  The potential for fraud is much                 
 greater in the states that border each other, thus the need is                
 greater in those states.  If someone in the state of Alaska wants             
 to duplicate benefits, they have to fly to Washington State, for              
 example, and they certainly won't reap much of a profit.  She felt            
 there was not a lot of fraud within in the state and that's the               
 reason why no one has been able to quantify it.  She stated she               
 would like to have additional time to research the issue, to talk             
 with the national experts and get back to the committee with some             
 comprehensive information as to the threshold as to where                     
 fingerprinting becomes permissible.                                           
                                                                               
 Number 840                                                                    
                                                                               
 REPRESENTATIVE VEZEY said he failed to understand why Ms. Dodd                
 thought there was a constitutional issue in that no individual is             
 forced to sign up for a benefit program; it's a voluntary request             
 for service.                                                                  
                                                                               
 MS. DODD responded that because people are compelled to request               
 public assistance by virtue of their neediness, there are going to            
 be people trying to get these benefits.  If a constitutional right            
 is being waived for just people who interface with the system in              
 one area, then that is discriminatory.  In other words, as long as            
 a person is not in need of public assistance, then that person's              
 privacy rights are protected; nobody is going to fingerprint that             
 person.   To the question of whether or not public assistance is              
 voluntary, she thought that was the difference in perspective                 
 between her organization and Representative Vezey.                            
                                                                               
 CO-CHAIR TOOHEY noted that she had recently been fingerprinted                
 while applying for a concealed weapon permit and asked if Ms. Dodd            
 was indicating that Co-Chair Toohey had given up her rights by                
 being fingerprinted?                                                          
                                                                               
 MS. DODD responded that society has determined there is a concrete            
 risk that a violent crime will be committed with a firearm, which             
 is just one risk.                                                             
                                                                               
 Number 953                                                                    
                                                                               
 JIM NORDLUND, Director, Division of Public Assistance, Department             
 of Health & Social Services, testified the department was opposed             
 to the legislation for three reasons:  1)  It addresses a problem             
 that doesn't exist; 2) it has a cost to the state without any                 
 anticipated savings; and 3) it sets up an information tracking                
 system that is virtually useless.  He advised that he would address           
 each of these issues in detail.                                               
                                                                               
 MR. NORDLUND referenced Ms. Dodd's testimony regarding the                    
 differences between California, New York and the state of Alaska.             
 In Alaska, there are small communities and even in Anchorage, the             
 largest community in the state, there is one public assistance                
 office.  He commented it would be virtually impossible to apply for           
 benefits one day under one name and the following day apply for               
 benefits under another name.  It would be impossible to apply for             
 assistance under two different names.  He said for the most part,             
 he didn't see that any duplicate benefits were issued in the state            
 of Alaska.  However, that's not to say there isn't welfare fraud in           
 the state - there is welfare fraud and there is a fraud unit that             
 tracks down fraud.  This is not the type of fraud the state is                
 faced with, however.                                                          
                                                                               
 MR. NORDLUND said secondly, if the state doesn't pay duplicate                
 benefits in Alaska, there really is no savings to be achieved                 
 through this measure.  It would simply be a cost as reflected in              
 the fiscal note, to implement something that doesn't do any good.             
 He said Curt Lomas was available to answer any questions regarding            
 the fiscal note.                                                              
                                                                               
 MR. NORDLUND said his last point was that HB 451 sets up a tracking           
 system that is virtually useless.  Even if there was a problem with           
 duplicate benefits in the state and the fingerprints were taken,              
 there is no place to send those fingerprints.  There is no other              
 state that has a systematic information identification system like            
 this.   He noted there are a few states that have projects like               
 this as Mr. DeWitt mentioned, and there is some sporadic                      
 application of this program, but for the most part any systematic             
 tracking system is nonexistent.  He felt the state would be                   
 premature to set up a fingerprinting system in the state when there           
 is no place to send those fingerprints.                                       
                                                                               
 MR. NORDLUND said because of welfare reform and it appears there is           
 going to be a lifetime limit on benefits, there is a need to track.           
 He pointed out there is a problem in the federal welfare                      
 legislation in that there is no system set up for tracking benefits           
 across state lines.  From what he has seen, there is nothing                  
 anticipated in terms of a federal set up in creating this tracking            
 system that is going to use fingerprints as a method of                       
 identification.  That's not to say there couldn't be in the future;           
 it's possible, but at this point he said we'd be way out in front             
 with a fingerprinting system that doesn't do the state any good.              
 Even with a pilot program, if there was a problem with duplicate              
 benefits, he asked what good is it just to take fingerprints in               
 Anchorage when those prints can't be compared with someone who                
 might be trying to apply for duplicate benefits in any other city             
 in the state.  He commented this is one instance where a pilot                
 program really doesn't make any sense.                                        
                                                                               
 MR. NORDLUND pointed out the provision in the legislation which               
 says to apply for duplicate benefits is fraudulent is unnecessary             
 because the current statutes already consider applying for                    
 duplicate benefits as welfare fraud.  He informed the committee of            
 an individual in Anchorage who attempted to do that under an alias,           
 and she is currently serving time in jail.                                    
                                                                               
 Number 1173                                                                   
                                                                               
 CO-CHAIR BUNDE said he remembered reading about a case in Anchorage           
 where an individual had accumulated quite a bit of money and asked            
 if having the fingerprints would have assisted in tracking the                
 person down when the department became suspicious.  He felt there             
 were two kinds of fraud:  1) when the same person applies for                 
 duplicate benefits; and 2) a person applies for benefits they are             
 not entitled to.                                                              
                                                                               
 MR. NORDLUND explained the two most common kinds of fraud                     
 encountered by the department.  The first is when an individual's             
 living circumstance has changed.  The income of the entire                    
 household is looked at when determining if an individual is                   
 eligible, and if the person moved in with someone who is providing            
 for them and it is not reported, that is fraud.  The other kind of            
 fraud is failure to report earned income or failure to report an              
 increase in assets, which would make a person ineligible.                     
                                                                               
 Number 1257                                                                   
                                                                               
 REPRESENTATIVE ROBINSON clarified that the type of fraud in Alaska            
 is different from the kind of fraud that can be detected with                 
 fingerprinting.  In other words, all fraud cases won't fit under              
 the fingerprinting process.                                                   
                                                                               
 MR. NORDLUND said that was correct.  He added there are two motives           
 behind this legislation; one is the possibility of someone                    
 falsifying their identification and secondly, the need to track               
 people to ensure the five year limit, if imposed, had not been                
 exceeded.  The second need is a real need.  He explained that                 
 Alaska needs to have a system in place which will be able to track            
 benefits beyond the 60-month limit that is anticipated will be                
 imposed on recipients.  Alaska does not have the mechanism to                 
 compare that information with other states, but whatever mechanism            
 is determined, has to be in place in all states and has to be                 
 applied uniformly.  At this point, there is no indication that                
 fingerprinting is going to be that mechanism.  It is known that               
 each state's eligibility information system will be able to track             
 people from one state to the next under their true identity.  Mr.             
 Nordlund said the department is working on a proposal to accomplish           
 that.  In fact, part of the information systems request was                   
 included in the supplemental budget approved by the House of                  
 Representatives last week.                                                    
                                                                               
 Number 1355                                                                   
                                                                               
 REPRESENTATIVE VEZEY referred to Mr. Nordlund's intuitive opinion             
 that there is very little fraud of duplicate benefits and asked if            
 there was any audit information available to actually quantify the            
 presence or absence of this kind of fraud.                                    
                                                                               
 MR. NORDLUND responded yes.  He explained that a big part of their            
 program is quality control, which is required under federal                   
 regulation.  A random sampling of the caseload is taken                       
 periodically and reviewed for variations or problems in the                   
 eligibility determination process.  It is partly through this                 
 quality control process that other kinds of fraud are discovered,             
 but duplicate benefits have not been a problem.                               
                                                                               
 CO-CHAIR BUNDE announced this was the first hearing on HB 451 and             
 it would be held in the HESS Committee for further discussion.                
                                                                               

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