Legislature(2005 - 2006)BUTROVICH 205

03/02/2005 08:30 AM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSB 104(JUD) Out of Committee
Heard & Held
              SB 104-PERMANENT FUND DIVIDEND FRAUD                                                                          
8:47:41 AM                                                                                                                    
CHAIR SEEKINS announced SB 104 to be up for consideration.                                                                      
SENATOR HUGGINS moved to adopt Version \I as the working                                                                        
document. With no objections, the motion carried.                                                                               
8:49:13 AM                                                                                                                    
CHAIR SEEKINS asked Sharon Barton to comment on Version \I.                                                                     
MS. SHARON BARTON, director, Permanent  Fund Division (PFD), told                                                               
members  the  legal  drafter  worked   the  PFD  violations  into                                                               
existing law.  The intent  of including  the language  on Section                                                               
10, paragraph (5) is, absent  that language, the court would have                                                               
the option of prosecuting PFD  violations as either a misdemeanor                                                               
or  a felony.  Version \I  clarifies that  PFD violations  can be                                                               
prosecuted under its own section.                                                                                               
MR.  CHRIS POAG,  attorney, Department  of  Law (DOL),  testified                                                               
Section 10,  paragraph (5)  does two  things. An  applicant might                                                               
submit  documentation  to accompany  an  application  to the  PFD                                                               
division.  However,  a  person  might  also  be  contacted  by  a                                                               
division employee  and provide  information verbally.  Section 10                                                               
addresses  phone  representations  because  currently  falsifying                                                               
information   on  the   phone  is   not  covered   under  unsworn                                                               
falsification. He  recommended changing the reference  on line 31                                                               
from AS 11.56.210 to AS 11.56.205.                                                                                              
8:52:13 AM                                                                                                                    
CHAIR  SEEKINS asked  whether  that change  would  mean a  person                                                               
convicted  of   a  felony  could   not  be  found  guilty   of  a                                                               
MR. POAG explained:                                                                                                             
     If  you submit  an  application and  it contains  false                                                                    
     information,  that's a  written or  recorded statement.                                                                    
     If  you call  the PFD  division on  the phone  and make                                                                    
     representations over  the phone -  oral representations                                                                    
     -  those   oral  representations  don't   constitute  a                                                                    
     violation  of  the  felony  act.   But  those  are  two                                                                    
     separate  acts  that  could be  two  separate  criminal                                                                    
     offenses, one being oral representation.                                                                                   
SENATOR  THERRIAULT asked  if  the  DOL wants  to  make sure  the                                                               
written violation should not be prosecuted as a misdemeanor.                                                                    
MR. POAG answered correct. He said  as the bill is written, there                                                               
is the  potential ambiguity that false  information could include                                                               
that written or recorded statement.                                                                                             
SENATOR THERRIAULT proposed Amendment 1:                                                                                        
     Page  4, line  31, delete  AS 11.56.210  and insert  AS                                                                    
With no objections, Amendment 1 was adopted.                                                                                    
8:53:47 AM                                                                                                                    
CHAIR SEEKINS asked  Ms. Barton if SB 104 gives  the PFD division                                                               
the ability to access the databases.                                                                                            
MS. BARTON said she did not know.                                                                                               
CHAIR SEEKINS advised the intent of  the committee was to pass SB                                                               
104 out of committee.                                                                                                           
SENATOR  GUESS  asked  Ms. Barton  whether  a  false  application                                                               
representing a child was covered.                                                                                               
MS. BARTON answered yes.                                                                                                        
8:55:26 AM                                                                                                                    
SENATOR  FRENCH asked  the number  of prosecutions  that occurred                                                               
last year.                                                                                                                      
MS. BARTON said there were  no state prosecutions and one federal                                                               
SENATOR  FRENCH asked  whether there  were no  state prosecutions                                                               
because the felony charge was not available.                                                                                    
MS. BARTON said the main reason  was the lack of such a provision                                                               
in the  statute. The federal  government is currently  attuned to                                                               
social security, mail  and wire fraud and so it  has two or three                                                               
Alaska cases under consideration.                                                                                               
8:57:34 AM                                                                                                                    
MR. POAG  said Alaska had one  state indictment but as  part of a                                                               
plea agreement there was no conviction for the PFD fraud charge.                                                                
SENATOR FRENCH asked Ms. Barton who would investigate PFD fraud.                                                                
MS. BARTON  advised that  chief investigator  Dan Boone  would be                                                               
8:59:12 AM                                                                                                                    
MR.  DAN   BOONE,  investigator,   Department  of   Revenue,  PFD                                                               
Division,  advised  the  committee  the  division  submitted  two                                                               
cases.  One  was  declined  and was  prosecuted  by  the  federal                                                               
government,  resulting  in  a  conviction.  The  other  case  was                                                               
resolved to a felony DUI  and the fraud convictions were dropped.                                                               
Currently the division is using  the federal government to obtain                                                               
prosecutions   because  state   law  does   not  provide   enough                                                               
enforcement power.                                                                                                              
CHAIR  SEEKINS asked  Mr.  Boone  the number  of  fraud cases  he                                                               
expects to investigate.                                                                                                         
MR.  BOONE indicated  ample opportunity  for prosecution.  Out of                                                               
the 1,600 fraud  tips the dividend received,  48 percent resulted                                                               
in an action.  SB 104 would mainly be used  to educate the public                                                               
and deter  people from falsifying  statements. The DOR  is headed                                                               
toward  using  online  applications  and  electronic  signatures,                                                               
which are  hard to  investigate. Educating the  public will  be a                                                               
priority,  as the  division  wants to  deter  people from  filing                                                               
false applications by  letting them know beforehand  they will be                                                               
committing a felony.                                                                                                            
9:02:09 AM                                                                                                                    
CHAIR SEEKINS asked  Ms. Barton how the public  would be notified                                                               
regarding falsifying applications.                                                                                              
MS. BARTON replied the  application contains conspicuous language                                                               
regarding consequences  of falsification.  That language  will be                                                               
"beefed up" if this law passes.                                                                                                 
SENATOR  HUGGINS  voiced  concern   about  college  students  and                                                               
military personnel  because of additional hurdles  they must pass                                                               
when applying for a dividend,  especially time delays experienced                                                               
by overseas military personnel.                                                                                                 
9:03:47 AM                                                                                                                    
MS.  BARTON said  students  submit a  form  from the  registrar's                                                               
office to  certify enrollment.  The division  is also  attuned to                                                               
the special needs of military  personnel and is liberal with time                                                               
extensions for  both students and  military personnel.  She noted                                                               
that  even  after  denial,  the  division  would  reconsider  the                                                               
circumstances. A  power of attorney can  also be used to  file an                                                               
application.  She  noted  a  new  law  passed  last  year  allows                                                               
military personnel to apply an  additional 90 days after they are                                                               
removed from an area where they receive combat pay.                                                                             
9:08:04 AM                                                                                                                    
SENATOR  HUGGINS asked  Ms.  Barton the  number  of students  and                                                               
military personnel who are not getting their dividends.                                                                         
MS. BARTON advised small numbers  of people are denied because of                                                               
inability  to  provide  proper  documentation.  The  majority  of                                                               
problems occur because people lose their documentation.                                                                         
9:10:26 AM                                                                                                                    
CHAIR  SEEKINS asked  whether it  was  an automatic  disqualifier                                                               
when someone moves to another state.                                                                                            
MS.  BARTON  replied  there  is   no  simple  question  regarding                                                               
eligibility.  Registering  to  vote  or applying  for  a  fishing                                                               
license in another  state disqualifies a person  from receiving a                                                               
SENATOR  HUGGINS commented  military personnel  are eligible  for                                                               
resident hunting and  fishing licenses in other  states. He hoped                                                               
that does not disqualify them.                                                                                                  
9:13:31 AM                                                                                                                    
CHAIR SEEKINS said he knows people  who never intend to come back                                                               
but draw a PFD.                                                                                                                 
SENATOR  FRENCH  asked  Mr.  Boone  the  number  of  total  cases                                                               
referred out of the division.                                                                                                   
MR. BOONE replied  that the division's goal is to  get money back                                                               
to the  state, not  to prosecute.  However, some  egregious cases                                                               
need to be prosecuted.                                                                                                          
9:17:43 AM                                                                                                                    
CHAIR SEEKINS asked Ms. Barton  whether she was satisfied with SB                                                               
MS. BARTON answered yes.                                                                                                        
SENATOR  THERRIAULT moved  CSSB  104(JUD) out  of committee  with                                                               
individual recommendations and zero  fiscal notes. There being no                                                               
objections, CSSB 104(JUD) passed out of committee.                                                                              

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