05/10/2004 11:20 AM House FIN

CS FOR SENATE BILL NO. 376(HES) am                                                                                            
                                                                                                                                
     An Act relating to public assistance and subpoena                                                                          
     powers; and relating to the permanent fund dividend and                                                                    
     subpoena powers.                                                                                                           
                                                                                                                                
JASON HOOLEY,  STAFF, SENATOR FRED  DYSON, noted that  SB 376                                                                   
would allow the commissioners  for the Department of Health &                                                                   
Social  Services  and  the Department  of  Revenue  to  issue                                                                   
subpoenas  to  compel the  production  of records  needed  to                                                                   
investigate  cases of  suspected  fraud.   The Department  of                                                                   
Labor  & Workforce  Development  currently has  that type  of                                                                   
subpoena power, as do many agencies in other states.                                                                            
                                                                                                                                
The Division of Public Assistant  Fraud Control Unit reported                                                                   
that records such  as rental agreements, utility  billings or                                                                   
health care information are often  used to verify information                                                                   
provided  by  public  assistance  applicants  or  recipients.                                                                   
Simple  requests for  these items  often go  unheeded due  to                                                                   
concerns about  exposure to litigation.  Currently,  the cost                                                                   
of going  to court to get  subpoenas for that type  of record                                                                   
makes  investigating  "smaller"   fraud  cases  prohibitively                                                                   
expensive.  By allowing these  departments to issue their own                                                                   
subpoenas, the costs  of going to court would  be eliminated,                                                                   
and the  department could  cost-effectively investigate  more                                                                   
cases  of suspected  fraud.   The result  will be  additional                                                                   
recovery  of  welfare  overpayments.   The  one-person  staff                                                                   
working to combat Permanent Fund  Dividend fraud has begun an                                                                   
aggressive  fraud  program, aimed  to  assure  that fraud  is                                                                   
identified, prosecuted,  and deterred to the  greatest extent                                                                   
possible.                                                                                                                       
                                                                                                                                
Representative Foster  MOVED to report CS SB  376 (HES)am out                                                                   
of Committee  with  individual recommendations  and with  the                                                                   
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative  Chenault  OBJECTED to  make  a  comment.   He                                                                   
voiced concern with who would  be in charge with the subpoena                                                                   
ballot.  He stated that it is  important that the Legislature                                                                   
indicate who  they would want  to see it be.   Representative                                                                   
Chenault WITHDREW his OBJECTION.                                                                                                
                                                                                                                                
JAY   MARLEY,   (TESTIFIED   VIA    TELECONFERENCE),   PUBLIC                                                                   
ASSISTANCE FRAUD CONTROL UNIT  MANAGER, DEPARTMENT OF LABOR &                                                                   
WORKFORCE  DEVELOPMENT,  ANCHORAGE,  stated that  within  the                                                                   
Department  of Labor  & Workforce  Development, the  subpoena                                                                   
power went down  to the investigator level.   With the number                                                                   
of subpoenas currently being investigated  by the Department,                                                                   
it would  be extremely  burdensome  to have  to wait for  the                                                                   
commissioner, deputy  commissioner or the deputy  director of                                                                   
any division's signature.                                                                                                       
                                                                                                                                
Representative Stoltze  could not believe that it  would be a                                                                   
"burden" to get the signature of the commissioner.                                                                              
                                                                                                                                
ANTHONY LOMBARDO,  DIRECTOR, DIVISION  OF PUBLIC  ASSISTANCE,                                                                   
DEPARTMENT OF HEALTH & SOCIAL  SERVICES, noted that there had                                                                   
been discussion in the Senate  regarding potential abuse.  As                                                                   
a result, there was language proposed  by Senator French that                                                                   
it  be limited  to the  commissioner's  or director's  level.                                                                   
Essentially, the  decisions need to  be made on  an executive                                                                   
level where  there is  some accountability  in the  issuance.                                                                   
Department of Health  & Social Services agreed  that would be                                                                   
an appropriate limitation.                                                                                                      
                                                                                                                                
There  being NO  further  OBJECTION, CS  SB  376 (HES)am  was                                                                   
reported out of  Committee with "no recommendation"  and with                                                                   
fiscal note  #1 &  #2 by  the Department  of Health  & Social                                                                   
Services and zero note #3 by the Department of Revenue.