04/30/2004 09:12 AM Senate FIN

                                                                                                                                
     CS FOR SENATE BILL NO. 376(HES)                                                                                            
     "An Act relating to public assistance and subpoena powers; and                                                             
     relating to the permanent fund dividend and subpoena powers."                                                              
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken  stated this bill,  sponsored by the Senate  Health,                                                            
Education   and   Social   Services   Committee,   "authorizes   the                                                            
commissioners  of the Department of  Health and Social Services  and                                                            
the  Department  of  Revenue  to  issue   subpoenas  to  compel  the                                                            
production  of records  needed  to investigate  cases  of  suspected                                                            
fraud."                                                                                                                         
                                                                                                                                
JASON HOOLEY, Staff to  Senator Dyson, stated this legislation would                                                            
assist  the  Department  of  Health  and  Social  Services  and  the                                                            
Department  of Revenue  to  "combat  fraud". Currently  when  public                                                            
assistance fraud or permanent  fund dividend fraud is suspected, the                                                            
departments   typically   request   additional    documentation   or                                                            
information from  the applicants. However, these requests  are often                                                            
unheeded or ignored.  The departments must then engage  the judicial                                                            
system  to acquire  subpoenas  to obtain  the information  from  the                                                            
applicants  to determine eligibility.  Engaging the judicial  system                                                            
is time  consuming  and expensive  in the  use of  State  resources.                                                            
Allowing  these departments  to acquire subpoenas  would enable  the                                                            
State to more  efficiently combat  fraud and subsequently  serve the                                                            
people of Alaska.                                                                                                               
                                                                                                                                
Senator  Olson asked  the  number  of cases  of suspected  fraud  of                                                            
public assistance benefits occur annually.                                                                                      
                                                                                                                                
Mr.  Hooley  deferred  to  the  Department   of  Health  and  Social                                                            
Services.                                                                                                                       
                                                                                                                                
TONY LOMBARDO,  Director, Division of Public Assistance,  Department                                                            
of Health  and Social  Services, testified  via teleconference  from                                                            
Anchorage to introduce Mr. Marley.                                                                                              
                                                                                                                                
JAY MARLEY, Program Manager,  Fraud Control Unit, Division of Public                                                            
Assistance, Department  of Health and Social Services, testified via                                                            
teleconference  from  Anchorage  told  of  two types  of  cases  the                                                            
Division tracks:  applicant fraud and recipient fraud.  The Division                                                            
attempts to  stop applicant fraud  before benefits are distributed.                                                             
Last year, the  Division investigated 595 applicant  fraud cases and                                                            
698 recipient fraud cases.                                                                                                      
                                                                                                                                
Senator  Olson  asked  the  number  of  these investigations   would                                                            
require subpoena power.                                                                                                         
                                                                                                                                
Mr. Marley  replied the  number varies and  averages one-quarter  of                                                            
the number  of investigations.  The  subpoenas  are not necessarily                                                             
issued to recipients or  applicants, but rather to employers, banks,                                                            
and other  institutions that  would have  information regarding  the                                                            
applicants and recipients' employment and financial status.                                                                     
                                                                                                                                
Co-Chair Green  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
There was  no objection  and CS  SB 376 (HES)  MOVED from  Committee                                                            
with fiscal note #1 for  $5,500 and fiscal note #2 for -$25,100 from                                                            
the Department  of Health and Social Services and  a new zero fiscal                                                            
note dated 4/21/04 from the Department of Revenue.