Legislature(2005 - 2006)BUTROVICH 205
03/02/2005 08:30 AM JUDICIARY
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* first hearing in first committee of referral
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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 misdemeanor. 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 11.56.205. 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 prosecution. 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 responsible. 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 PFD. 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 104. 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.