Legislature(2017 - 2018)ADAMS ROOM 519

03/28/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 219 CRIM HIST CHECK: ST EMPLOYEES/CONTRACTORS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ HB 386 VESSELS: REGISTRATION/TITLES; DERELICTS TELECONFERENCED
Heard & Held
+= HB 217 RAW MILK SALES; FOOD EXEMPT FROM REGS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ HJR 29 REAUTHORIZE SECURE RURAL SCHOOLS ACT TELECONFERENCED
Moved CSHJR 29(FIN) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 219                                                                                                            
                                                                                                                                
     "An   Act   relating    to   background   investigation                                                                    
     requirements  for  state  employees  whose  job  duties                                                                    
     require  access  to  certain federal  tax  information;                                                                    
     relating to persons under contract  with the state with                                                                    
     access    to   certain    federal   tax    information;                                                                    
     establishing  state personnel  procedures required  for                                                                    
     employee  access to  certain  federal tax  information;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
1:33:04 PM                                                                                                                    
                                                                                                                                
BRANDON S. SPANOS, DEPUTY DIRECTOR, TAX DIVISION,                                                                               
DEPARTMENT OF REVENUE, introduced the legislation. He read                                                                      
from a sectional analysis (copy on file):                                                                                       
                                                                                                                                
     Section 1                                                                                                                  
     Amends AS 12.62.400 by adding a new subsection.                                                                            
     This will require an agency  to submit the fingerprints                                                                    
     of  current  or  prospective employees  or  contractors                                                                    
     whose  job   duties  require  access  to   federal  tax                                                                    
     information   (defined   in  AS   39.55.015(e)(3)   and                                                                    
     36.30.960(d)(3))  to the  Department  of Public  Safety                                                                    
     for submission  to the Federal Bureau  of Investigation                                                                    
     to obtain a criminal  history record. Defines "agency",                                                                    
     "employee" and "contractor".                                                                                               
                                                                                                                                
     Section 2                                                                                                                  
     Amends AS 36.30 by adding a new section.                                                                                   
     This  section  establishes state  personnel  procedures                                                                    
     for obtaining  and submitting fingerprints  for current                                                                    
     or  prospective  contractors  if a  contract  with  the                                                                    
     state  requires  access  to  federal  tax  information.                                                                    
     Defines   "agency",  "contractor"   and  "federal   tax                                                                    
     information".                                                                                                              
                                                                                                                                
     Section 3                                                                                                                  
     Amends AS 39 by adding a new chapter.                                                                                      
     This new  chapter addresses state  personnel procedures                                                                    
     related to federal tax information.                                                                                        
     Adds AS 39.55.010                                                                                                          
     This section  explains the purpose of  the chapter-- to                                                                    
     establish   procedures   to   safeguard   federal   tax                                                                    
     information   which  will   apply  to   a  current   or                                                                    
     prospective  state employee  whose  job duties  require                                                                    
     access to federal tax information.                                                                                         
     Adds AS 39.55.015                                                                                                          
     This  section requires  current  and prospective  state                                                                    
     employees whose job duties require                                                                                         
     access   to   federal   tax  information   to   provide                                                                    
     information to an agency for a state and national                                                                          
     criminal  history   record  check.   Defines  "agency",                                                                    
     "employee",  "federal tax  information", "return",  and                                                                    
     "return information".                                                                                                      
                                                                                                                                
     Section 4                                                                                                                  
     Provides the effective date of July 1, 2018.                                                                               
                                                                                                                                
Representative  Wilson stated  that she  did not  understand                                                                    
why   the   department   and   agencies   were   doing   the                                                                    
fingerprinting  and   sending  them  in;  rather   than  the                                                                    
employee pay for the process.                                                                                                   
                                                                                                                                
Co-Chair  Foster  noted the  committee  had  been joined  by                                                                    
Representative Pruitt and Vice-Chair Gara.                                                                                      
                                                                                                                                
Mr. Spanos noted it was a  good point. He felt that it could                                                                    
be another option.                                                                                                              
                                                                                                                                
Representative Wilson  stressed that the state  did not have                                                                    
any money,  so she did  not understand why the  budget would                                                                    
be increased.  She noted that  the fiscal notes  showed that                                                                    
the  Department of  Corrections  (DOC) had  the program  for                                                                    
free. She wondered why DOC was free.                                                                                            
                                                                                                                                
Mr.  Spanos replied  that  he understood  that  DOC did  the                                                                    
program  themselves,  so  the Department  of  Public  Safety                                                                    
(DPS) would charge for the cost of the background check.                                                                        
                                                                                                                                
1:37:19 PM                                                                                                                    
                                                                                                                                
GARY  LEE, CRIMINAL  JUSTICE PLANNER,  DEPARTMENT OF  PUBLIC                                                                    
SAFETY (via teleconference), introduced himself.                                                                                
                                                                                                                                
Representative  Wilson wondered  whether DPS  had a  cost to                                                                    
the background checks.                                                                                                          
                                                                                                                                
Mr. Lee replied in the  affirmative. He stated that the cost                                                                    
was $47 for a fingerprint-based background check.                                                                               
                                                                                                                                
Representative  Wilson wondered  whether DPS  paid for  that                                                                    
cost for those  that had been accepted  into the department,                                                                    
or whether the employee paid for the cost.                                                                                      
                                                                                                                                
Mr.  Lee  answered  that  it was  generally  funded  by  the                                                                    
requesting  agency. He  stated  that  DPS did  approximately                                                                    
40,000 background checks per year for agencies.                                                                                 
                                                                                                                                
Representative Tilton  noted that  there were  some agencies                                                                    
within the  fiscal note that  stated that they  could absorb                                                                    
the costs,  and other agencies  were doing it for  free. She                                                                    
wondered  why  the  individual  paying  for  the  background                                                                    
check. She understood that the  federal government would not                                                                    
allow  the documentation  to be  available  to the  agencies                                                                    
without  the background  checks. She  queried the  agencies'                                                                    
different uses of the background checks.                                                                                        
                                                                                                                                
Mr.  Spanos   answered  that  the  Tax   Division  used  the                                                                    
information to compare corporate  tax returns to the federal                                                                    
tax return, and verify that  the information was similar. He                                                                    
stated  that  the  IRS  would   share  information  about  a                                                                    
corporation  audit. He  stated that  Child Support  Services                                                                    
used  the information  to garnish  a tax  refund. He  stated                                                                    
that  the  Department  of Labor  and  Workforce  Development                                                                    
(DOLWD)   used  the   background   check   to  verify   wage                                                                    
information for the unemployment insurance tax.                                                                                 
                                                                                                                                
Representative Guttenberg  noted that the  legislation would                                                                    
give the  state employees and contractors  access to federal                                                                    
tax information. He stressed that  the entity paying for the                                                                    
service  controlled the  service.  He  wondered whether  the                                                                    
federal government  had a requirement outlining  whether the                                                                    
state or individual  paid for the background  check, and how                                                                    
it would be processed, paid for, and shared.                                                                                    
                                                                                                                                
1:42:43 PM                                                                                                                    
                                                                                                                                
Mr.  Spanos  answered  that the  IRS  released  a  document,                                                                    
"Publication  1075", which  detailed the  state requirements                                                                    
in order to continue to  receive federal tax information. He                                                                    
stated  that  the  state  was in  compliance  with  all  the                                                                    
requirements,  except for  the fingerprinting.  He announced                                                                    
that there  was an implemented policy  on background checks,                                                                    
and those  checks were conducted  up to the  level possible.                                                                    
He stressed  that the fingerprinting required  authority. He                                                                    
stated that  the Publication  1075 the  IRS did  not specify                                                                    
who would pay for the  fingerprinting, rather it stated that                                                                    
the  states   must  conduct   background  checks   on  their                                                                    
employees.                                                                                                                      
                                                                                                                                
Representative  Kawasaki   surmised  that  the   issue  only                                                                    
applied to  state employees or contractors  who would access                                                                    
the federal tax information.                                                                                                    
                                                                                                                                
Mr. Spanos answered in the affirmative.                                                                                         
                                                                                                                                
Representative  Kawasaki asked  how many  people would  have                                                                    
access.                                                                                                                         
                                                                                                                                
Mr.  Spanos  answered  that  there  were  approximately  105                                                                    
filled positions in  the division that would  have access or                                                                    
potential  access.  He remarked  that  there  were only  six                                                                    
employees  that actually  had the  security to  go into  the                                                                    
system to view  the information. He stressed  that there was                                                                    
a possibility  to view the  information on the  computer. He                                                                    
stated that, in  Child Support Services, the  number was 250                                                                    
people, and  deferred to Ms.  Beecher for  more information.                                                                    
He restated that the number was closer to 200.                                                                                  
                                                                                                                                
Representative Kawasaki stated that  currently there were no                                                                    
criminal background checks  done in the agency.  He asked if                                                                    
it was a new requirement.                                                                                                       
                                                                                                                                
Mr. Spanos  answered that the publication  was finalized the                                                                    
year  prior. He  stated that  with the  updated publication,                                                                    
the Child  Support Division and  Tax Division created  a new                                                                    
policy  for  background  checks.  That  policy  was  already                                                                    
implemented.  He stressed  that  they had  yet to  implement                                                                    
fingerprinting   run  through   the  federal   database.  He                                                                    
explained  that it  was  the final  step  of the  background                                                                    
check.                                                                                                                          
                                                                                                                                
Representative Wilson wondered  whether the department would                                                                    
not be doing the fingerprinting.                                                                                                
                                                                                                                                
Mr. Spanos  replied that fingerprints  would be done  by the                                                                    
Department  of  Public  Safety (DPS).  He  deferred  to  Mr.                                                                    
Gaffney for more information.                                                                                                   
                                                                                                                                
Representative Wilson questioned the  details of the efforts                                                                    
of DPS.                                                                                                                         
                                                                                                                                
ERIC GAFFNEY,  RECORDS AND  LICENSING, DEPARTMENT  OF PUBLIC                                                                    
SAFETY   (via    teleconference),   responded    that   most                                                                    
fingerprinted in  Alaska for civil purposes  was done either                                                                    
by private  commercial finger printers, employers,  or local                                                                    
police agency.  He stated that  DPS usually did  not conduct                                                                    
fingerprinting  in larger  urban areas,  because there  were                                                                    
private venders  who provided that  service. He  shared that                                                                    
there  was   no  strict   rule  on   who  should   roll  the                                                                    
fingerprints.  He   remarked  that  the   fingerprints  were                                                                    
conveyed to DPS,  were scanned, and then  transmitted to the                                                                    
FBI. He remarked that the  rolling of the fingerprints was a                                                                    
different issue than processing  them for background checks.                                                                    
He stated that there was  no specific rule in Alaska, except                                                                    
for concealed  handgun permits, on  who may or  was required                                                                    
to roll those prints.                                                                                                           
                                                                                                                                
1:47:38 PM                                                                                                                    
                                                                                                                                
Representative Tilton  asked for more information  about the                                                                    
federal receipts in the fiscal note.                                                                                            
                                                                                                                                
CAROL  BEECHER, DIRECTOR,  DIVISION CHILD  SUPPORT SERVICES,                                                                    
DEPARTMENT  OF REVENUE  (via  teleconference),  asked for  a                                                                    
restatement of the question.                                                                                                    
                                                                                                                                
Representative Tilton noted that  the fiscal note showed the                                                                    
source  of  funding  from  federal  receipts.  She  wondered                                                                    
whether there  was a federal  grant with a match  that would                                                                    
help to pay for the program.                                                                                                    
                                                                                                                                
Ms. Beecher  replied that the  Child Support Division  was a                                                                    
federally matched program. She  explained that the state put                                                                    
forward 34  percent of the budget,  and was matched at  a 66                                                                    
percent rate  from the federal  government. She  shared that                                                                    
66 percent of  the cost would be bourn by  the federal match                                                                    
money.                                                                                                                          
                                                                                                                                
Representative Wilson  noted that the fiscal  note specified                                                                    
that  currently  there  was  no   cost  to  the  DOC  to  do                                                                    
background checks.  She wondered  why the  background checks                                                                    
were free.                                                                                                                      
                                                                                                                                
APRIL    WILKERSON,   DIRECTOR,    ADMINISTRATIVE   SERVICES                                                                    
DIVISION,  DEPARTMENT OF  CORRECTIONS (via  teleconference),                                                                    
stated her  understanding of the question.  She assumed that                                                                    
the  question was  asking why  DPS  did not  charge DOC  for                                                                    
processing the fingerprints.                                                                                                    
                                                                                                                                
Representative  Wilson stated  that the  fiscal note  showed                                                                    
that  the fingerprinting  was  provided,  currently, to  the                                                                    
department at  no fee. Therefore,  she assumed that  DOC was                                                                    
not charged either.                                                                                                             
                                                                                                                                
Ms. Wilkerson  replied in the  affirmative. She  stated that                                                                    
DOC currently  processed their own fingerprints,  and rolled                                                                    
fingerprints  through  the  machine. It  was  a  cooperative                                                                    
agreement in place  within the DOC facilities  in support of                                                                    
DPS. She  shared that  the DOC  would resubmit  its employee                                                                    
and  contractor backgrounds.  She  stated that  DPS did  not                                                                    
bill DOC for  the processing on the  background and criminal                                                                    
checks.                                                                                                                         
                                                                                                                                
Representative  Wilson surmised  it would  be cheaper  to go                                                                    
through DOC for everything.                                                                                                     
                                                                                                                                
Mr.   Spanos   appreciated   receiving   the   federal   tax                                                                    
information.  He stated  that  the  information helped  with                                                                    
audits  and  receive  revenue.  He  shared  that,  over  the                                                                    
previous five years, the department  had received an average                                                                    
of $2 million per year.                                                                                                         
                                                                                                                                
Co-Chair Foster OPENED and CLOSED public testimony.                                                                             
                                                                                                                                
HB  219  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB 219 Sectional for HFIN.pdf HFIN 3/28/2018 1:30:00 PM
HB 219
HB219 Transmittal Letter.pdf HFIN 3/28/2018 1:30:00 PM
HB 219
HJR 29 Secure Rural Schools Funding in Federal Omnibus Bill.pdf HFIN 3/28/2018 1:30:00 PM
HJR 29
HB 386 Draft Proposed CS Ver D 03.27.18.pdf HFIN 3/28/2018 1:30:00 PM
HB 386
HB 386 statute changes power point house finance.pdf HFIN 3/28/2018 1:30:00 PM
HB 386
HB 217 Alaska Grown 3-26-18.pdf HFIN 3/28/2018 1:30:00 PM
HB 217
HB 217 Version T 3-27-18.pdf HFIN 3/28/2018 1:30:00 PM
HB 217
HB 217 Alaska Grown Sponsor Statement 3.27.18.pdf HFIN 3/28/2018 1:30:00 PM
HB 217
HB 386 Sectional Analysis ver D 03.28.18.pdf HFIN 3/28/2018 1:30:00 PM
HB 386
HB 386 Sectional changes ver A to Ver D 03.28.18.pdf HFIN 3/28/2018 1:30:00 PM
HB 386
HB 217 Summary of Changes Version O to T.pdf HFIN 3/28/2018 1:30:00 PM
HB 217
HB217 Letters of Support 3.28.18.pdf HFIN 3/28/2018 1:30:00 PM
HB 217
HB 386 Letter of concern 3.28.18.pdf HFIN 3/28/2018 1:30:00 PM
HB 386
HJR 29 Dr. Wegner testomony.pdf HFIN 3/28/2018 1:30:00 PM
HJR 29
HB 217 Audit 2015.pdf HFIN 3/28/2018 1:30:00 PM
HB 217