Legislature(1995 - 1996)
03/05/1996 02:04 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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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