Legislature(2017 - 2018)GRUENBERG 120

03/07/2018 01:00 PM JUDICIARY

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Audio Topic
01:08:22 PM Start
01:08:39 PM HB219
02:39:56 PM Adjourn
* 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 --
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HB 219-CRIM HIST CHECK: ST EMPLOYEES/CONTRACTORS                                                                    
                                                                                                                                
1:08:39 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN announced  that the only order of  business would be                                                               
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."                                                                                               
                                                                                                                                
1:09:53 PM                                                                                                                    
                                                                                                                                
BRANDON SPANOS,  Deputy Director, Tax Division,  described HB 219                                                               
as straight-forward,  and he  paraphrased the  sectional analysis                                                               
as follows [original punctuation provided]:                                                                                     
                                                                                                                                
     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, 2017                                                                                
                                                                                                                                
1:12:33 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN asked whether this requires repeat fingerprinting                                                                  
or whether it is a one-time deal.                                                                                               
                                                                                                                                
MR. SPANOS answered that the fingerprint requirement is a result                                                                
of  IRS  Publication  1075  with   a  ten-year  requirement  that                                                               
fingerprinting be re-run, or at least a background check re-run.                                                                
                                                                                                                                
1:13:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS asked  Mr. Spanos  whether he  had                                                               
said it was every ten years.                                                                                                    
                                                                                                                                
MR. SPANOS answered in the affirmative.                                                                                         
                                                                                                                                
1:13:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN   referred  to   HB  219,  [Sec.   2,  AS                                                               
36.30.960] page 2, lines 26-27, which read as follows:                                                                          
                                                                                                                                
     (c)   A  background   investigation   under  this   section,                                                               
including  a  state  and  national  criminal  history  check,  is                                                               
confidential.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  EASTMAN asked  the meaning  of "confidential"  in                                                               
this context.   Obviously, it  is serving the purpose  of getting                                                               
information to someone and he  asked who receives the information                                                               
and who does not receive the information.                                                                                       
                                                                                                                                
MR.  SPANOS responded  that confidential  information means  that                                                               
the  information  cannot  be  given to  someone  outside  of  the                                                               
individual  who  ran  the  background   check,  and  to  specific                                                               
agencies requiring  that information.   For example,  if it  is a                                                               
tax  division  employee, the  tax  division  would need  to  know                                                               
whether there was  a crime involving a crime of  dishonesty.  The                                                               
Tax Division would know that  limited bit of information from the                                                               
background  check in  order verify  whether  the employee  should                                                               
continue working in the division.                                                                                               
                                                                                                                                
1:14:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN  asked  what happens  when  a  background                                                               
check  reveals that  a state  employee or  applicant is  a serial                                                               
sexual harasser.                                                                                                                
                                                                                                                                
MR. SPANOS replied that a  policy has been written addressing the                                                               
crimes the  Tax Division is  concerned with  as a division.   The                                                               
policy  also  relates  to the  Child  Support  Services  Division                                                               
(CSSD) and  its concerns around  sexual crimes  against children,                                                               
those crimes  would preclude  a person  from employment  in CSSD.                                                               
In  the event  it  is  a general  sexual  crime,  that should  be                                                               
disclosed on their job application,  and he opined that there are                                                               
some requirements  as to the dates  of the crimes.   He explained                                                               
that  the Tax  Division  verifies the  information the  applicant                                                               
disclosed  with the  information  contained  within the  criminal                                                               
history background check.                                                                                                       
                                                                                                                                
REPRESENTATIVE  EASTMAN asked  whether that  verification is  for                                                               
new applicants and current employees.                                                                                           
                                                                                                                                
MR.  SPANOS  answered  that  the  background  check  is  for  new                                                               
applicants.   As to the  current employees,  if it is  within the                                                               
last 5-10  years and it  is a  crime of dishonesty,  the division                                                               
would go back  and review their application.  Although,  if it is                                                               
outside of that realm, the  division has not requested a detailed                                                               
criminal  history   check  regarding  current  employees.     The                                                               
division  would  only  see  the   crimes  it  has  identified  as                                                               
concerning, and for  the new employees, it would  verify that the                                                               
information provided on their application  disclosed all of their                                                               
crimes.                                                                                                                         
                                                                                                                                
REPRESENTATIVE EASTMAN  commented that if he  had state employees                                                               
working  under his  supervision, he  would want  to know  whether                                                               
they had issues  that may not fall under  crimes against children                                                               
but might still  be relevant to whether his staff  was at risk of                                                               
being sexually  harassed, for  example.   The state  is currently                                                               
paying the fees for the  criminal background check, at what point                                                               
could that  information be  disclosed to Mr.  Spanos as  a hiring                                                               
manager or  a supervisor  investigating a  workplace issue  or is                                                               
that information just not available at all, he asked.                                                                           
                                                                                                                                
MR. SPANOS responded  that if the information  would be available                                                               
to a  hiring manager, it would  not be available to  a supervisor                                                               
looking  at  other  discipline.   He  related  that  they  worked                                                               
closely  with  the  Alaska  Labor  Relations  Agency  within  the                                                               
Department of Labor & Workforce  Development (DLWD) in developing                                                               
its  procedures.   The Alaska  Labor Relations  Agency was  quite                                                               
explicit  that there  had to  be a  job nexus  to the  crimes the                                                               
division was considering and the  duties the person would perform                                                               
on  the job.   While,  he said,  a sexual  harassment history  is                                                               
concerning, that crime was not  specific enough to the job duties                                                               
the  person would  perform  for the  division to  put  it into  a                                                               
policy for these purposes.                                                                                                      
                                                                                                                                
1:17:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES  asked what  departments would  be affected                                                               
by HB  219, and  what employees of  what departments  or agencies                                                               
would be required to submit to fingerprinting.                                                                                  
                                                                                                                                
MR. SPANOS answered that within  the Department of Revenue (DOR),                                                               
it would include the Tax  Division and the Child Support Services                                                               
Division (CSSD); and  within the Department of  Labor & Workforce                                                               
Development (DLWD),  it would include the  Division of Employment                                                               
& Training  Services Unemployment  Insurance because  those three                                                               
agencies receive federal tax information, he explained.                                                                         
                                                                                                                                
1:18:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX  surmised  that this  would  only  involve                                                               
prospective employees.                                                                                                          
                                                                                                                                
MR. SPANOS clarified  that all of the Tax  Division's current and                                                               
prospective  employees would  undergo  a background  check.   The                                                               
verification that the information  on the background check agreed                                                               
with the information  listed on the original  job application was                                                               
only for new  employees.  He related that the  division would not                                                               
pull  all  of  the  original job  applications  for  its  current                                                               
employees,  of which  have been  employed  there sometimes  20-30                                                               
years and it would be difficult to find those documents.                                                                        
                                                                                                                                
1:18:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX commented  that  she  does not  understand                                                               
why, if the information is  available, he would not simply glance                                                               
at what the people had said when they were first employed.                                                                      
                                                                                                                                
MR. SPANOS  clarified that if  [the background check  revealed] a                                                               
"crime of dishonesty," the division  would absolutely go back and                                                               
verify whether the person disclosed  that information at the time                                                               
of  hire.   In the  event it  was any  other crime,  the division                                                               
would not even be notified that  that showed up on the background                                                               
check for current  employees.  For example, he  advised, when the                                                               
division first  started talking  about this,  it had  already run                                                               
background checks on  all of its employees and it  simply had not                                                               
performed the  fingerprinting portion.   The policy is  in place,                                                               
backgrounds  checks  have  been  run,  some  employees  expressed                                                               
concern regarding a DUI on  their record and those employees were                                                               
advised  that the  division would  not  receive that  information                                                               
because it was not a crime of dishonesty.                                                                                       
                                                                                                                                
1:20:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX surmised  that  the  background checks  on                                                               
folks is only  reported to the Tax Division if  it reports crimes                                                               
of dishonesty.                                                                                                                  
                                                                                                                                
MR. SPANOS explained that the  Criminal Investigation Unit within                                                               
the Department  of Revenue (DOR)  performs background  checks and                                                               
receives the  full criminal history  background information.   In                                                               
an effort  to remain impartial  and look  only at the  facts, the                                                               
agency requesting the background  criminal history check does not                                                               
want to  know the  person's full criminal  history and  to simply                                                               
look at  the person's  convictions of crimes  of dishonesty.   In                                                               
that regard, the  agency would determine whether the  crime had a                                                               
nexus to  the job  and whether  that agency  would retain  or not                                                               
employ the person based on that information.                                                                                    
                                                                                                                                
1:21:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked  whether he would want  to be advised                                                               
if  a  criminal  background  check   reported  that  one  of  his                                                               
employees was  convicted of domestic  violence or  murder because                                                               
murder  does not  involve honesty  or dishonesty,  it could  be a                                                               
"very honest murder."                                                                                                           
                                                                                                                                
MR. SPANOS  commented that that  is a  difficult area and  it was                                                               
certainly discussed  often.  He  reiterated that in  working with                                                               
the Alaska  Labor Relations Agency,  it was clear the  crimes had                                                               
to have  a direct  nexus with  the job  duties performed  for the                                                               
division.                                                                                                                       
                                                                                                                                
1:22:25 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN noted his understanding  that this bill is driven by                                                               
federal regulations  which essentially  say that the  federal tax                                                               
information could not  be released unless the  entity performed a                                                               
certain amount  of background checks.   Therefore, the background                                                               
checks being requested is driven  by the federal regulations that                                                               
say, "these are  the people that we have  problems getting access                                                               
to, the background checks and  those who don't."  He acknowledged                                                               
that he did  not know how it  was being applied, but  to add more                                                               
complexity  to  the  topic,  under federal  law,  unless  it  has                                                               
changed,  all  felonies  are  considered  crimes  of  dishonesty.                                                               
Under  the federal  evidence code,  murder  would be  a crime  of                                                               
dishonesty, and  under the Alaska  evidence code as ruled  by the                                                               
Alaska Supreme Court, a crime  of dishonesty is in fact something                                                               
that you  think of as dishonest.   Theft, for example,  all theft                                                               
offenses are  crimes of dishonesty, murder  would not necessarily                                                               
be a crime of dishonesty.   Mr. Spanos probably cannot answer how                                                               
that is applied,  but what rates as a crime  of dishonesty sounds                                                               
like what the  federal government is most interested  in to allow                                                               
Alaska's people to  have access to its federal  records, of which                                                               
is probably  driven by  the federal government  and not  by state                                                               
policy.                                                                                                                         
                                                                                                                                
1:23:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS asked for  confirmation that on one                                                               
note, the discussion is about employees who are already hired.                                                                  
                                                                                                                                
MR. SPANOS answered in the affirmative.                                                                                         
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS surmised  that  this  is simply  a                                                               
question of retention or non-retention.                                                                                         
                                                                                                                                
MR. SPANOS said that Representative Kreiss-Tomkins was correct.                                                                 
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS commented  that under  the "honest                                                               
murder"  scenario,  the honest  murderer  would  have been  hired                                                               
previously by DOR  and whatever criteria would  have been vetted,                                                               
the honest  or dishonest murderer  would not be affected  by this                                                               
bill.                                                                                                                           
                                                                                                                                
MR.  SPANOS  answered   that  Representative  Kreiss-Tomkins  was                                                               
correct,  and he  reiterated  that for  new  hires, the  division                                                               
would verify  that the  person had fully  disclosed on  their job                                                               
application any  crimes that needed to  be disclosed.  As  to the                                                               
current employees, due  to the union representation  and the fact                                                               
that they  had been with the  division for a long  period of time                                                               
without issue, the  division did not want to open  the "whole can                                                               
of worms" and look at  every crime.  Specifically, he reiterated,                                                               
the division was  told that it could not, in  fact, look at every                                                               
crime for retention or non-retention.                                                                                           
                                                                                                                                
1:24:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS referred  to the  fiscal note  and                                                               
noted the  "sort of"  legislative history of  this policy,  and I                                                               
noted why this  fiscal note differs blah, blah, blah,  this is an                                                               
updated version  of the 2018  legislative session, I also  see it                                                               
was  prepared   by  Greg  Cashen,  Acting   Commissioner  of  the                                                               
Department  of Labor  & Workforce  Development, which  was awhile                                                               
ago and  wondering if this  has been through the  wringer before,                                                               
one or more times."                                                                                                             
                                                                                                                                
MR. SPANOS commented  that this is actually the  first hearing on                                                               
HB 219, and on any  bill involving fingerprinting for the purpose                                                               
of background checks for federal tax information.                                                                               
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS  asked  whether  the  reason  Greg                                                               
Cashen  was  the  Acting Commissioner  was  because  Commissioner                                                               
Heidi Drygas was on vacation.                                                                                                   
                                                                                                                                
MR. SPANOS replied  that he could not speak to  that question and                                                               
opined that the fiscal note  was drafted last session.  Although,                                                               
he  said, the  Tax Division  did request  hearings last  session,                                                               
none were heard, and this is the first hearing on the bill.                                                                     
                                                                                                                                
1:26:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  referred   to  Governor  Bill  Walker's                                                               
4/6/17 letter directed  to The Honorable Bryce  Edgmon, and asked                                                               
why  the  governor  invoked  Article  III,  Section  18,  of  the                                                               
Constitution of the State of Alaska.                                                                                            
                                                                                                                                
MR. SPANOS answered that he would have to get back to her.                                                                      
                                                                                                                                
REPRESENTATIVE REINBOLD referred to  the second paragraph of that                                                               
letter  and noted  that Governor  Walker "talks  about all  these                                                               
different  reasons,  the IRS,  Support  Services,  the Bureau  of                                                               
Fiscal  Services,  and  Medicare/Medicaid, you  know,  services."                                                               
She asked  why Governor  Walker invoked  all of  that information                                                               
into this letter.                                                                                                               
                                                                                                                                
MR.  SPANOS explained  that  for the  second  paragraph he  could                                                               
speak  to "Publication  1075 in  26 U.S.C.  6103(p)(4)(C)," those                                                               
are basically the  IRS's statute and a  publication that dictates                                                               
what the  states need  to do  in order to  be compliant  with the                                                               
IRS's  requirement, part  of which  is a  background check.   Mr.                                                               
Spanos  pointed  to  language "further  down,"  and  advised  the                                                               
agencies  affected   are  within   the  Department   of  Revenue,                                                               
Treasury,  Internal  Revenue  Service,   the  Bureau  of  Federal                                                               
Services, and the federal tax  information directly affects child                                                               
support.   He  related  that he  could not  speak  to the  Social                                                               
Security  Administration,  and he  was  not  certain whether  the                                                               
Centers for  Medicare and Medicaid  Services receive  federal tax                                                               
information.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS,  in  response  to  Representative                                                               
Reinbold's  previous  question   regarding  why  Governor  Walker                                                               
invoked  Article III,  Section  18, of  the  Constitution of  the                                                               
State of Alaska, explained that  it allows the governor to submit                                                               
bills to the legislature.                                                                                                       
                                                                                                                                
1:28:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  referred  to Governor  Walker's  letter                                                               
that "goes  on and on" about  the federal government.   She noted                                                               
that  on  "line  2,  it  says 'requires  access  to  federal  tax                                                               
information,' it  says 'to  certain.'"  She  asked Mr.  Spanos to                                                               
explain the words "require" and "certain."                                                                                      
                                                                                                                                
MR. SPANOS responded  that within the Tax  Division, certain jobs                                                               
require access to the IRS data  in order to fulfill the duties of                                                               
their  job.     For  example,  if  an  employee   is  auditing  a                                                               
corporation, part of  the job would be to verify  that the income                                                               
they reported  to the state  matches the income they  reported to                                                               
the IRS.   The employee would pull the federal  return and verify                                                               
that information.   He advised that Carol Beecher  was online and                                                               
she  could better  speak to  CSSD and  she had  mentioned to  Mr.                                                               
Spanos that its employees are also  required as part of their job                                                               
duties to have access to that federal tax information.                                                                          
                                                                                                                                
1:30:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD asked how many  people have access to how                                                               
many people's records.                                                                                                          
                                                                                                                                
MR. SPANOS  replied that the division  is very strict on  who can                                                               
access  what information  and it  is all  tracked in  the system.                                                               
While there  is the potential for  a great deal of  access, it is                                                               
safeguarded  and limited  in what  information the  employees can                                                               
actually  view as  part  of their  job duties.    Within the  Tax                                                               
Division there are approximately  100 employees, and within child                                                               
support there are approximately 200  employees, so within the DOR                                                               
approximately   300  employees   have  access   to  federal   tax                                                               
information.   As  far as  the  number of  information, its  very                                                               
voluminous  as it  would be  all of  the federal  tax information                                                               
provided by  Alaskans to the federal  government, and potentially                                                               
a great  deal more from other  states.  In the  event a corporate                                                               
filer  may or  may not  file in  Alaska, the  Tax Division  would                                                               
likely have that federal tax information access if needed.                                                                      
                                                                                                                                
1:31:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD   referred  to  the   approximately  300                                                               
employees and  asked roughly how  much data those  employees have                                                               
access to on federal income tax.                                                                                                
                                                                                                                                
MR.  SPANOS asked  whether she  was asking  about the  numbers of                                                               
returns.                                                                                                                        
                                                                                                                                
REPRESENTATIVE REINBOLD  said that "any access  to federal income                                                               
tax data,  these 300  employees.   How many  people do  they have                                                               
access to  tens of thousands  of people,  do they have  access to                                                               
all  of  the  corporations,  native corporations,  what  kind  of                                                               
access do they have?"                                                                                                           
                                                                                                                                
MR. SPANOS answered that there  are roughly 400,000 filers in the                                                               
State  of Alaska  for  federal tax  returns,  and the  division's                                                               
employees  would have  access  to that  information.   Again,  he                                                               
said,  the  division  tracks  it very  closely.    Currently,  he                                                               
offered,  only  approximately  six   employees  can  access  that                                                               
information  because the  division  is still  in  the process  of                                                               
setting  up the  safeguards.   He explained  that access  will be                                                               
expanded to other employees but the  IRS has strict rules, and in                                                               
May the IRS will audit the  division and will request as follows:                                                               
all  of the  division's records,  a  record of  who accessed  the                                                               
information,   for  what   purpose,  what   was  done   with  the                                                               
information,  where the  information  is stored,  whether it  was                                                               
given to anyone,  and whether it was destroyed.   He related that                                                               
the  audit  is  thorough  and  the  information  is  tracked  and                                                               
safeguarded  closely.   As  far as  the  database, he  explained,                                                               
there are  roughly 400,000 individuals  from the State  of Alaska                                                               
and approximately 17,000 corporations  that file state returns of                                                               
which the division has access.                                                                                                  
                                                                                                                                
CHAIR  CLAMAN  noted that  the  committee  now has  four  current                                                               
fiscal notes from  March 2018, and that is all  that is expected,                                                               
the fifth fiscal note was issued in 2017.                                                                                       
                                                                                                                                
1:33:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  surmised  that there  are  roughly  300                                                               
employees with  access to 400,000 filers  and 17,000 corporations                                                               
and asked whether this bill expands anything in any manner.                                                                     
                                                                                                                                
MR. SPANOS answered, "No."                                                                                                      
                                                                                                                                
REPRESENTATIVE  REINBOLD   referred  to  HB  219,   [Sec.  2,  AS                                                               
36.30.960(d)(2)] page 3, lines 1-2, which read as follows:                                                                      
                                                                                                                                
            (2) "contractor" means a person who has                                                                             
      applied for or been awarded a contract with a state                                                                       
     agency and includes a subcontractor;                                                                                       
                                                                                                                                
REPRESENTATIVE  REINBOLD asked  why a  contractor with  the state                                                               
would need access to federal income tax data.                                                                                   
                                                                                                                                
MR. SPANOS  answered that currently,  there are six  IT developer                                                               
contractors  who  have designed  and  developed  the tax  revenue                                                               
management system.   As part of that, they design  the reports to                                                               
run.   For example, he  explained that  in the event  a corporate                                                               
auditor  wants to  run  a  report on  a  company  and verify  its                                                               
federal  tax information,  these contractors  are the  people who                                                               
design  and develop  that report,  and  they may  even test  that                                                               
report.  While,  they have potential access, they  would never go                                                               
out and  look for individual  or corporate information,  but they                                                               
may have potential  access by developing the  reports and testing                                                               
those reports, he offered.                                                                                                      
                                                                                                                                
1:34:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD asked whether it  would help if the state                                                               
had an income tax, and how  would this bill impact a state income                                                               
tax.                                                                                                                            
                                                                                                                                
MR.  SPANOS  responded that  the  information  would become  more                                                               
useful.   Currently, he said,  individual income  tax information                                                               
is used  for tobacco tax,  mining tax,  alcohol tax, and  some of                                                               
the state's  other excise taxes.   It is quite rare  the division                                                               
uses it, but it  has needed it for a current  address, or for the                                                               
mining tax and its income because  that is a tax based on income.                                                               
In  the  event  the  state  had an  individual  income  tax,  the                                                               
division would likely design the  database to automatically match                                                               
income  reported to  Alaska to  income reported  to the  IRS, and                                                               
flag those  that do  not match  for review by  an examiner  or an                                                               
auditor.                                                                                                                        
                                                                                                                                
1:35:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD asked whether it  would be helpful if the                                                               
state implemented an income tax.                                                                                                
                                                                                                                                
MR.  SPANOS explained  that  the  bill does  not  help with  that                                                               
issue, the bill  allows the division to continue  to receive that                                                               
federal  tax data.    As  to whether  it  would  be helpful,  the                                                               
division can  do that now as  the division has had  access to the                                                               
federal  tax  information  (FTI)  for years.    This  legislation                                                               
allows the  division to  continue to have  access to  the federal                                                               
tax information because the IRS told  all 50 states that in order                                                               
to  continue  to  use  the federal  tax  information  (FTI),  the                                                               
background checks are required, he explained.                                                                                   
                                                                                                                                
1:36:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  asked what  is an FTI,  and how  long as                                                               
the state had the FTI.                                                                                                          
                                                                                                                                
MR.  SPANOS  responded that  the  federal  tax information  (FTI)                                                               
sharing  agreements with  the state  and  the federal  government                                                               
goes back years and  years.  There were a few  years when the tax                                                               
division did not  receive data because it was  transitioning to a                                                               
new  system.   He explained  that the  division experienced  some                                                               
findings  that there  were some  unsecure computer  databases and                                                               
rather than fix  the old databases, the division  did not receive                                                               
data while  the new database  was being  built.  The  division is                                                               
now in compliance and receives that data, he said.                                                                              
                                                                                                                                
1:37:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  offered  concern about  the  many  data                                                               
breaches on the  military and everyone, and she  asked whether it                                                               
was  a liability  for the  state to  have this  kind of  personal                                                               
information.   She said she was  unsure how the state  would know                                                               
whether this information is safe  because it is confidential, and                                                               
that bothers her.                                                                                                               
                                                                                                                                
1:37:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN asked whether,  as an elected Alaskan, his                                                               
information  is available  to the  division  through the  sharing                                                               
arrangement that is already in place.                                                                                           
                                                                                                                                
MR.  SPANOS  responded that  if  Representative  Eastman filed  a                                                               
federal tax  return, his  information would  be available  in the                                                               
database.   In the  event an employee  ran his  information, that                                                               
employee  would be  subject  to discipline  up  to and  including                                                               
termination because there would be  no reason for the employee to                                                               
run his information, and the division would see that it was run.                                                                
                                                                                                                                
1:38:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN asked that if  someone would be in trouble                                                               
for using  his information, why  is his information  available in                                                               
the first place.                                                                                                                
                                                                                                                                
MR. SPANOS  responded that the individual  tax information cannot                                                               
be  narrowed to,  for  example, only  taxpayer  information.   He                                                               
related that  an agency can  either choose to  receive individual                                                               
information, or not  receive that information.   The Tax Division                                                               
receives  individual information  because  it has  tax types  for                                                               
which the  information is  useful.  He  related that  Ms. Beecher                                                               
could  speak  to  the  CSSD  because  far  more  individuals  are                                                               
impacted by  having that  individual information.   The  CSSD has                                                               
the ability  to receive money  that is  due to the  state, rather                                                               
than have the federal government  issue a refund to that taxpayer                                                               
and then garnish that money.                                                                                                    
                                                                                                                                
CHAIR  CLAMAN commented  that  by way  of example,  if  he was  a                                                               
member of  a corporation  and filed a  corporate tax  return with                                                               
the  state,  the  Tax  Division  would look  at  both  what  this                                                               
corporation filed with  the federal government and  what it filed                                                               
with  the state  government  to determine  whether those  numbers                                                               
matched.                                                                                                                        
                                                                                                                                
MR. SPANOS said  that Chair Claman was correct.   In the event he                                                               
was  a   shareholder  in  "X   Corporation,"  he  has   a  filing                                                               
requirement with  the state and  the federal government,  and the                                                               
division  could verify  that information.   He  added that  it is                                                               
also quite useful  when asked questions by the  legislature.  For                                                               
example, if  a new  tax was  proposed that  involved any  sort of                                                               
income  component from  individuals,  wage tax,  income tax,  and                                                               
anything in that regard, the  division would not necessarily look                                                               
at  individuals,  it  would  access that  database  in  order  to                                                               
determine what  the revenue impact to  the state would be  on any                                                               
sort of new legislation.                                                                                                        
                                                                                                                                
1:40:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN referred  to the period of  time the state                                                               
was not  receiving information and asked  whether any significant                                                               
harm was caused to the state by not receiving this information.                                                                 
                                                                                                                                
MR.  SPANOS replied  that this  was at  a time  the division  was                                                               
designing, developing, testing, and rolling  out a new system and                                                               
its auditors  were heavily engaged  in that process.   Other than                                                               
the oil  and gas production group,  which kept all of  its audits                                                               
current, all  of the other  audits suffered.  Therefore,  he said                                                               
it was not a  direct result of not having the IRS  data, it was a                                                               
result of  being completely overworked in  designing, developing,                                                               
and rolling out a new system, so it was not a direct impact.                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN  referred   to  the  criminal  background                                                               
information being limited to crimes  of dishonesty and asked what                                                               
is driving that particular label  and whether that is simply what                                                               
the IRS is requiring as an absolute minimum.                                                                                    
                                                                                                                                
MR. SPANOS answered  that the IRS requires a policy  in place and                                                               
to abide by that policy,  which includes a fingerprint component.                                                               
The  IRS left  it  up  to each  individual  state  to draft  that                                                               
policy, and the policy was  drafted between the Tax Division, the                                                               
Child  Support   Services  Division  (CSSD),  and   the  Criminal                                                               
Investigation Unit within the Department  of Revenue (DOR) and in                                                               
working with the Alaska Labor Relations Agency.                                                                                 
                                                                                                                                
1:42:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  commented that this limitation  to crimes                                                               
of dishonesty  does not  appear to  include common  sense because                                                               
dishonesty appears  to be  so narrow.   He  said, "What  about me                                                               
honestly, you know, releasing  that confidential information when                                                               
I'm not supposed  to," and asked whether that would  be caught up                                                               
under the division's dishonesty provision.                                                                                      
                                                                                                                                
MR. SPANOS  advised that under  current law, the person  would be                                                               
subject to criminal  fines and imprisonment.  He  opined that the                                                               
penalty was  $5,000 and up to  three years in jail  for releasing                                                               
that information,  so the person  would not  have a job  with the                                                               
division  if they  were  in  jail.   Certainly,  he pointed  out,                                                               
disclosing  confidential information  to someone  outside of  the                                                               
agency would be dishonest and  the division strictly follows that                                                               
confidentiality.   While, he  said, he does  not know  whether it                                                               
was specifically  noted in  that policy,  the division  has other                                                               
policies   regarding    confidentiality   and    breaching   that                                                               
confidentiality.   In  the event  an employee  purposely breached                                                               
that  confidentiality,  the  division would  certainly  push  for                                                               
termination, he said.                                                                                                           
                                                                                                                                
1:43:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN noted  that those  policies would  not be                                                               
caught  up under  the  criminal  background investigation  unless                                                               
they  fell  under  the  criteria  the division  set  forth.    He                                                               
described that  the division set  the criteria so narrow  that if                                                               
he had been  in jail for releasing  confidential information, was                                                               
released, applied  for, and was hired  for a job, but  he said he                                                               
was never in jail, and because  he was not dinged for dishonesty,                                                               
he fell through the cracks.                                                                                                     
                                                                                                                                
CHAIR CLAMAN pointed out  that Representative Eastman's statement                                                               
that a crime involving dishonesty is  a narrow path is simply not                                                               
true.  He  explained that crimes of dishonesty  under both Alaska                                                               
law and federal  law are quite broad, and the  crime he described                                                               
in which he  was in jail for  disclosing confidential information                                                               
is, in fact,  a crime involving dishonesty.   The mere suggestion                                                               
that  a crime  involving dishonesty  catches a  narrow number  of                                                               
people is not true, crimes  of dishonesty actually catches a wide                                                               
swath of  people who  might not even  know their  crimes involved                                                               
dishonesty, he remarked.                                                                                                        
                                                                                                                                
MR. SPANOS  reiterated that DOR's Criminal  Investigation Unit is                                                               
the  agency  that  runs  those background  checks  and  it  works                                                               
closely with both  the Tax Division and CSSD.   The investigators                                                               
are aware  of the  concerns for each  section and  discussed what                                                               
the definition of crimes of  dishonesty is for both sections, and                                                               
what crimes the division would want  to know about.  In the event                                                               
those crimes  showed up  on the  background checks,  the Criminal                                                               
Investigation  Unit  would  notify   the  Tax  Division  and  the                                                               
division would certainly not hire  that individual.  In the event                                                               
the  crimes related  to  a current  employee,  a committee  would                                                               
discuss the "nature of that"  and whether to retain the employee.                                                               
In  the event  someone was  in jail  for disclosing  confidential                                                               
information, unless  there was some  information he did  not know                                                               
about, the division certainly would  not retain that employee, he                                                               
said.                                                                                                                           
                                                                                                                                
1:46:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN  offered  a   scenario  wherein  he  sold                                                               
confidential information  on the  black market and  asked whether                                                               
that would  be caught up  under the current background  check and                                                               
whether it would trigger some type of alarm.                                                                                    
                                                                                                                                
MR.  SPANOS answered  that if  the person  was convicted  for the                                                               
crime it  absolutely would show  up on the background  check, and                                                               
absolutely  that  would  be  something   within  which  he  would                                                               
recommend termination.                                                                                                          
                                                                                                                                
REPRESENTATIVE  EASTMAN referred  to the  mention that  currently                                                               
Mr.  Spanos is  "kind of  reticent"  to go  to current  employees                                                               
because they  may have worked in  the division for a  long period                                                               
of time  and "nothing  has happened"  so they  are assumed  to be                                                               
doing okay.   Except, he  said, he does  not see anything  in the                                                               
language  or testimony  that limits  that provision  to employees                                                               
who have worked  in the division for  a long period of  time.  In                                                               
the  event someone  had been  hired for  a month,  and this  bill                                                               
became  law,  would  that  person  be  considered  a  preexisting                                                               
employee and  the division  would not look  at that  person, such                                                               
that the  person had been  convicted of sexual harassment  and on                                                               
the job for a month ...                                                                                                         
                                                                                                                                
CHAIR CLAMAN  advised that he did  not hear a question  and moved                                                               
to Representative LeDoux.                                                                                                       
                                                                                                                                
1:48:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  commented that this  [legislation] appears                                                               
to be  as a result of  the federal government, and  she asked who                                                               
can  advise  whether  the  committee  is  going  by  the  federal                                                               
definition of  honesty, or the  state's definition.   The federal                                                               
definition  of honesty  is broader  and would  probably encompass                                                               
"just about everything."                                                                                                        
                                                                                                                                
MR. SPANOS answered that the  federal government has not dictated                                                               
what a crime of dishonesty is  and the federal government has not                                                               
noted  that  the policy  should  contain  the phrase  "crimes  of                                                               
dishonesty."   In fact,  he offered,  that phrase  was determined                                                               
within the  department as crimes  of interest.  The  Alaska Labor                                                               
Relations Agency  was concerned about  the nexus to the  job, and                                                               
that  the  department  would  not  be  allowed  to  terminate  an                                                               
employee  based  on  a  DUI on  their  criminal  history  record.                                                               
Therefore, the  division had to  look at certain types  of crimes                                                               
that had  that nexus to the  job duties and crimes  of dishonesty                                                               
is that nexus.   The department did not  want employees releasing                                                               
confidential information or stealing  cash from the Tax Division,                                                               
and  the Child  Support  Services Division  (CSSD) was  concerned                                                               
about crimes against children.                                                                                                  
                                                                                                                                
1:49:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked what  the federal government required                                                               
exactly.                                                                                                                        
                                                                                                                                
MR. SPANOS  responded that the  federal government  required that                                                               
the states  have a policy  in place, which included  performing a                                                               
background    check   on    their   employees    which   included                                                               
fingerprinting.   Thereby, he  explained, the  federal government                                                               
is leaving it  up to the states to determine  what crimes were of                                                               
concern.                                                                                                                        
                                                                                                                                
CHAIR  CLAMAN  speculated that  because  it  is clearly  a  state                                                               
policy  and the  federal government  is not  requiring it,  it is                                                               
fair  to  believe they  are  applying  the Alaska  definition  of                                                               
crimes involving dishonesty.                                                                                                    
                                                                                                                                
1:50:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  commented that  Chair Claman  was probably                                                               
correct.   She  surmised  that in  the event  a  person had  been                                                               
convicted  of  a DUI  and  they  answered  no to  the  conviction                                                               
question, and the  DUI showed up on the background,  it would not                                                               
make a difference.                                                                                                              
                                                                                                                                
MR. SPANOS replied that it would  make a difference if the person                                                               
had reported  on their employment  application that they  did not                                                               
have a criminal  history and a DUI showed up,  the division would                                                               
interpret  that  as  being  dishonest   in  the  job  application                                                               
process.                                                                                                                        
                                                                                                                                
1:51:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP commented that  it appears the legislation is                                                               
mirroring the  Security and Exchange Commission  requirements for                                                               
financial advisors,  investment planners,  and the  folks dealing                                                               
with tax information.                                                                                                           
                                                                                                                                
MR. SPANOS replied  that Representative Kopp was  correct in that                                                               
it is similar and, in fact,  under the current statutes there are                                                               
approximately 18  jobs identified that require  fingerprinting as                                                               
part  of   their  job   duties,  as   follows:  the   Alaska  Bar                                                               
Association, Board  of Governors for the  Alaska Bar Association,                                                               
Board  of  Elections, teachers,  a  whole  list of  18  different                                                               
duties that  require fingerprinting,  and the Tax  Division would                                                               
be added to that list.                                                                                                          
                                                                                                                                
1:52:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOPP surmised  that  the division  is looking  at                                                               
this legislation  for revenue personnel because  they perform tax                                                               
audits on individuals and corporations.                                                                                         
                                                                                                                                
MR. SPANOS answered that Representative Kopp was correct.                                                                       
                                                                                                                                
REPRESENTATIVE  KOPP  referred  to  the  Department  of  Labor  &                                                               
Workforce Development  (DLWD) personnel  and noted that  they are                                                               
included  because   they  deal   with  unemployment   matters  on                                                               
businesses and individuals.                                                                                                     
                                                                                                                                
MR. SPANOS answered that Representative Kopp was correct.                                                                       
                                                                                                                                
REPRESENTATIVE  KOPP surmised  that "everything  has a  nexus" to                                                               
people who have federal tax  information, which is the reason the                                                               
dishonesty issue is so important.                                                                                               
                                                                                                                                
MR. SPANOS responded that Representative Kopp was correct.                                                                      
                                                                                                                                
REPRESENTATIVE  KOPP  referred  to  a  background  check  wherein                                                               
someone had gotten  into trouble for the  release of confidential                                                               
information, and  he asked whether  they would be  precluded from                                                               
an employment position under HB 219.                                                                                            
                                                                                                                                
MR.  SPANOS answered  that  the person  would  be precluded  from                                                               
employment.                                                                                                                     
                                                                                                                                
1:53:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD noted  that if  honesty is  so important                                                               
why not perform a lie detector test.                                                                                            
                                                                                                                                
MR. SPANOS answered that it did not cross their minds.                                                                          
                                                                                                                                
REPRESENTATIVE KOPP asked whether  the division would be amenable                                                               
to an amendment.                                                                                                                
                                                                                                                                
MR. SPANOS responded  that he personally would  not be interested                                                               
in an amendment but he could  discuss this issue with this policy                                                               
development committee.   He explained  that the Tax  Division was                                                               
most interested  in a  conviction because it  is black  and white                                                               
and easy to determine that a  person was found guilty in court or                                                               
had pled guilty.                                                                                                                
                                                                                                                                
REPRESENTATIVE KOPP  explained that the Polygraph  Protection Act                                                               
protects  all state,  municipal,  and  federal employees  against                                                               
polygraph interviews  until they  are the  subject of  a criminal                                                               
investigation.     In   that  regard,   the  polygraph   test  is                                                               
confidential with many regulations  around it and every workplace                                                               
must have the  Polygraph Protection Act.  Every  employee has the                                                               
right to  refuse unless they  are the focus of  an investigation,                                                               
and at  that time they can  be asked by the  investigating agency                                                               
to submit to a polygraph test.                                                                                                  
                                                                                                                                
CHAIR  CLAMAN  added  that  the  last time  he  hired  a  private                                                               
polygraph examiner,  he did  not like  the cost.   The  notion to                                                               
begin polygraph testing  every state employee in  addition to the                                                               
federal prohibition, the fiscal consequence would be quite high.                                                                
                                                                                                                                
1:55:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD commented  that it  is unbelievable  the                                                               
state has  already given  300 employees access  to tax  data that                                                               
they could  share and cause  tremendous harm to a  corporation or                                                               
an individual,  and yet a  polygraph test  cannot be taken.   She                                                               
asked whether the committee can  review the division's discipline                                                               
policy, and how it intends to catch these people.                                                                               
                                                                                                                                
MR. SPANOS responded that the  discipline policy may have already                                                               
been shared with this committee.                                                                                                
                                                                                                                                
CHAIR  CLAMAN  advised  that  his  staff  will  make  copies  and                                                               
distribute it to the committee.                                                                                                 
                                                                                                                                
1:56:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD noted  that  page 2  of  the bill  often                                                               
refers   to   agency.     She   referred   to  [Section   1,   AS                                                               
12.62.400(c)(1), which read as follows:                                                                                         
                                                                                                                                
               (1)  "agency" means  a department,  Office of                                                                    
     the  Governor,  or  entity  in  the  executive  branch,                                                                    
     including the  University of  Alaska, public  or quasi-                                                                    
     public  corporations, boards  or  commissions, and  the                                                                    
     Alaska Railroad Corporation.                                                                                               
                                                                                                                                
REPRESENTATIVE  REINBOLD asked  whether any  of the  above-listed                                                               
employees have access to personal tax data.                                                                                     
                                                                                                                                
MR.  SPANOS  answered  that   those  agencies  are  fingerprinted                                                               
currently and the division wants to be added to that list.                                                                      
                                                                                                                                
1:57:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD asked whether  the above agency employees                                                               
have  access to  personal [tax  information], including  Governor                                                               
Walker or his staff.                                                                                                            
                                                                                                                                
MR. SPANOS  responded that they do  not.  In fact,  he explained,                                                               
even within  the DOR people  do not  have access, and  the Alaska                                                               
tax information is not shared outside of the division.                                                                          
                                                                                                                                
REPRESENTATIVE  REINBOLD  surmised  that  only  the  Division  of                                                               
Revenue ...                                                                                                                     
                                                                                                                                
MR.  SPANOS reiterated  that not  everyone in  the Department  of                                                               
Revenue  (DOR) has  access to  the  tax information  or would  be                                                               
allowed to see  the information.  Access to  information would be                                                               
allowed only within  the Tax Division or CSSD, and  there must be                                                               
a  job-related  reason  for  those  employees  to  look  up  that                                                               
information.   He advised  that people  have been  terminated for                                                               
looking up information they had no business looking up.                                                                         
                                                                                                                                
1:58:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   REINBOLD  asked   for  confirmation   that  this                                                               
legislation  is not  expanding access  to the  governor's office,                                                               
executive branch,  the university, or  anyone, to any  income tax                                                               
data or corporate tax data, to any new people.                                                                                  
                                                                                                                                
MR. SPANOS answered that Representative Reinbold was correct.                                                                   
                                                                                                                                
CHAIR CLAMAN  noted that  in the most  absolute legal  sense, the                                                               
entire executive  branch works for  Governor Walker and  what the                                                               
Tax  Division knows,  as a  legal matter,  Governor Walker  knows                                                               
even if he is not looking  at the information.  He clarified that                                                               
that does not mean Governor  Walker is requesting the information                                                               
and if  he asked for the  tax information, he would  be asked the                                                               
reason for the request.                                                                                                         
                                                                                                                                
1:58:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD commented that  this bill refers to other                                                               
agencies "over  and over  again" and it  is important  to discuss                                                               
the concerns others  may have, she opined.  She  asked Mr. Spanos                                                               
to  explain,  other  than  the  IT  people,  who  are  the  other                                                               
contractors that would possibly gain access.                                                                                    
                                                                                                                                
MR. SPANOS  answered that currently,  no other  contractors would                                                               
have  access to  that  data.   If, in  the  future, the  division                                                               
outsourced  audits, as  some states  do, and  an auditor  were to                                                               
come in and  audit a corporation, they would  have limited access                                                               
to  that  information.    The  division  does  not  foresee  that                                                               
happening as it  believes the division is doing quite  a good job                                                               
with its  current auditors,  he remarked.   Other than  the staff                                                               
designing  and  developing the  IT  system,  there are  no  other                                                               
contractors, he advised.                                                                                                        
                                                                                                                                
REPRESENTATIVE REINBOLD asked for  confirmation that this is only                                                               
limited to potential audit contractors  and it does not expand to                                                               
any other people having access to any other data.                                                                               
                                                                                                                                
MR. SPANOS  responded that  Representative Reinbold  was correct,                                                               
the state's  confidentiality statutes  lay out  who can  view tax                                                               
information and that would include federal tax information.                                                                     
                                                                                                                                
2:00:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN asked  whether the  crimes of  dishonesty                                                               
would be wide enough to include a theft conviction.                                                                             
                                                                                                                                
CHAIR CLAMAN reiterated  that there is no question  that theft is                                                               
a  crime of  dishonesty,  and  Mr. Spanos  need  not answer  that                                                               
question.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  EASTMAN asked  that if  this legislation  becomes                                                               
law  and in  ten years  and  "we're doing  a whole  new round  of                                                               
background checks" and he had  a new conviction, would Mr. Spanos                                                               
be alerted  to that information, and  if it did not  fall under a                                                               
crime of dishonesty  would it be waived off and  Mr. Spanos would                                                               
not be alerted.                                                                                                                 
                                                                                                                                
MR. SPANOS  clarified that  the policy is  already in  effect and                                                               
the division  had already performed  background checks on  all of                                                               
its  employees, it  simply had  not performed  the fingerprinting                                                               
piece  which is  the  FBI  background check.    One employee  was                                                               
terminated based on that background  check being returned and the                                                               
policy in  effect is being followed;  however, the fingerprinting                                                               
cannot  take place  without authorization  or authority  from the                                                               
legislature.   He  asked whether  the  question was  that in  ten                                                               
years from now  when the background check is run  again whether a                                                               
new crime would be revealed.                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  noted that  Mr. Spanos receives  an alert                                                               
when  theft or  dishonesty is  revealed.   He offered  a scenario                                                               
that he, as a state employee,  had been working there for however                                                               
long and  after ten  years his renewal  was performed,  would Mr.                                                               
Spanos be alerted of his  domestic violence conviction because it                                                               
did not fall under his definition of crimes of dishonesty.                                                                      
                                                                                                                                
MR. SPANOS advised  that under current state  policies and rules,                                                               
there is  a requirement  that an  employee notify  their employer                                                               
within 24  hours of  being "arrested  or convicted."   Therefore,                                                               
the  next  time  the  background  check  was  run,  the  Criminal                                                               
Investigation  Unit   would  check  that  against   the  previous                                                               
background  check to  determine what  was new.   That  unit would                                                               
then ask Mr. Spanos whether  the employee had notified him within                                                               
that  24-hour  timeframe requirement.    He  explained that  that                                                               
would be an issue of honesty  as to whether the employee followed                                                               
procedure and notified him.                                                                                                     
                                                                                                                                
2:03:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  opined that a good  attorney could decide                                                               
that  the  state  had  some  degree  of  liability  if  something                                                               
criminal  happened   in  workplace  and  the   division  had  the                                                               
opportunity  to  identify  a  pattern  of  behavior  through  the                                                               
background information.   Except, because the  scope was narrowed                                                               
and it  "chose not act on  it or to  know about it -  could have,                                                               
but chose  not to,"  whether that  scenario had  been considered.                                                               
He asked whether  attorneys had ruled out any  state liability in                                                               
that type of situation.                                                                                                         
                                                                                                                                
MR.  SPANOS replied  that  the Department  of  Labor &  Workforce                                                               
Development  (DLWF), Alaska  Labor Relations  Agency advised  the                                                               
Tax  Division that  the  scope needed  to be  narrow  and he  was                                                               
uncertain whether they had checked  with attorneys on that issue.                                                               
Certainly, he pointed out, they  were concerned with case law and                                                               
jurisprudence which  required that an employee  not be terminated                                                               
based on information from a background  check that did not have a                                                               
direct  nexus  to  their  job duties.    Therefore,  he  related,                                                               
knowing that information  and not being able to  do anything with                                                               
it was useless to the division, and  it did not want to know that                                                               
information  about its  employees if  they could  not act  on the                                                               
information.                                                                                                                    
                                                                                                                                
REPRESENTATIVE   EASTMAN   asked   whether  the   committee   had                                                               
considered a  look back window  for the relatively  new employees                                                               
who  had worked  less  than  five years  and  did  not have  that                                                               
established  record, and  whether the  division should  look more                                                               
comprehensively at that criminal background.                                                                                    
                                                                                                                                
MR. SPANOS reiterated that if the  division could not act on that                                                               
information, it did not want to know the information.                                                                           
                                                                                                                                
2:05:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX commented  that there  has been  a lot  of                                                               
talk  around concerns  of a  data breach,  which is  important to                                                               
consider because there have been  so many data breaches.  Except,                                                               
she pointed out, she was  unsure this bill actually adds anything                                                               
to the  possibility of a  data breach.   The problem may  be that                                                               
the federal government  is handing over this  information, and it                                                               
sounds like the  division has access to all of  the United States                                                               
citizens'  tax returns.   She  said that  the issue  was not  the                                                               
division's  fault,  but  if  someone was  not  under  a  criminal                                                               
investigation or not  specifically applying for a job  in the Tax                                                               
Division,  for example,  that the  federal  government is  simply                                                               
"giving this over."   For example, she pointed to  CSSD and noted                                                               
that if a  private attorney sues someone for  back child support,                                                               
or  there is  a divorce  action, and  the attorney  is trying  to                                                               
obtain  a party's  tax returns,  it is  not possible  to press  a                                                               
button and  have access to  everyone's tax returns in  the United                                                               
States.    She explained  that  the  attorney  would have  to  go                                                               
through  the discovery  process and  ask  a judge  to compel  the                                                               
party  to sign  a release  in order  to obtain  the tax  returns.                                                               
While she  sympathizes with Representatives Reinbold  and Eastman                                                               
and  anyone else  with those  concerns about  a data  breach, she                                                               
pointed out that  it is not really  the fault of this  bill.  She                                                               
said  that she  did  not  believe this  bill  would  add to  data                                                               
breaches, and it might actually limit it somewhat.                                                                              
                                                                                                                                
2:08:13 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN  noted that Representative LeDoux  is quite accurate                                                               
about  the question  of data  breaches.   Access  to federal  tax                                                               
information  has  been held  by  state  governments for  decades.                                                               
Whether or not that is a  smart policy is really not the question                                                               
of this  bill, but  rather, he explained,  the policy  is whether                                                               
the legislature  should allow the  addition of  fingerprinting to                                                               
the  employees' background  checks.   He  said that  he does  not                                                               
think the  questions about data  breaches and the  overall policy                                                               
is  the issue  addressed within  this  bill, and  he limited  the                                                               
questions to  relate specifically to the  issue of fingerprinting                                                               
and its  potential policy  here.  The  larger question  about why                                                               
the federal government  has a policy essentially  allowing all 50                                                               
states access to federal tax  information, provided they meet the                                                               
federal  requirements,  is   not  the  topic  in   front  of  the                                                               
committee.   He  remarked  that there  have  been many  questions                                                               
about  that  issue  and  it  has  been  explored  adequately  for                                                               
purposes of deciding on this bill.                                                                                              
                                                                                                                                
2:09:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP  noted that for  20 years he worked  with the                                                               
Division   of  Statewide   Service  and   Criminal  Records   and                                                               
Identification Bureau, and every time  a criminal history was run                                                               
on anyone, that employee was subject  to an audit.  Each year, if                                                               
he could not remember why he  ran a person's criminal history, he                                                               
was "in  deep trouble."   The process,  he explained is  that the                                                               
dispatcher ran the criminal history  because he requested it, and                                                               
if the audit  failed, it was on Representative Kopp.   He further                                                               
explained that  he could be charged  up to a class  A misdemeanor                                                               
if he did not  have a criminal case he was  working, or there was                                                               
a  good  reason for  running  the  criminal  history.   He  asked                                                               
whether that is the standard used in the Tax Division.                                                                          
                                                                                                                                
MR. SPANOS answered  "Yes, absolutely," there is an  audit of the                                                               
access to federal and state  tax information, and the division is                                                               
very  interested  in  why  someone   would  be  looking  at  that                                                               
information.    He explained  that the  person would have  had to                                                               
have  an  audit   assigned  to  them  in  order   to  access  the                                                               
information.  For  instance, he pointed out, there  are large oil                                                               
and  gas   companies'  information   contained  within   the  Tax                                                               
Division's  databases, and  the division  is very  concerned when                                                               
someone wants  to look at  that information  but does not  have a                                                               
valid reason.   The division  has certain disciplines and  it has                                                               
terminated employees for those reasons, he explained.                                                                           
                                                                                                                                
2:10:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD asked  whether  there is  a trigger  for                                                               
everyone who accesses information.                                                                                              
                                                                                                                                
MR.  SPANOS  answered  that  the entire  system  is  logged,  but                                                               
specific to  federal tax information  it is logged in  a specific                                                               
location and reviewed quarterly.                                                                                                
                                                                                                                                
REPRESENTATIVE  REINBOLD   surmised  that  for  any   person  who                                                               
accesses federal  and state  information or  anything, it  is all                                                               
logged.                                                                                                                         
                                                                                                                                
MR. SPANOS answered in the affirmative.                                                                                         
                                                                                                                                
2:11:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  asked  whether   Mr.  Spanos  would  be                                                               
amenable  to  amending  the  bill   requiring  that  if  a  state                                                               
employee,  contractor, or  whoever else,  has access,  the person                                                               
they accessed is required to have knowledge of the abuse.                                                                       
                                                                                                                                
CHAIR  CLAMAN pointed  out to  Representative Reinbold  that this                                                               
bill  only   relates  to  the  fingerprinting   requirement,  her                                                               
question is beyond  the scope of the bill and  to ask a different                                                               
question.                                                                                                                       
                                                                                                                                
2:12:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD asked  why Governor  Walker is  carrying                                                               
this bill at this time, and  whether any type of organization, or                                                               
anyone, supports this legislation.                                                                                              
                                                                                                                                
MR. SPANOS answered that the  reason Governor Walker offered this                                                               
legislation  at  this  time  is because  the  IRS  finalized  its                                                               
Publication 1075 in 2017.   The IRS Publication 1075 requires the                                                               
states to  be compliant, and the  bill was introduced in  2017 so                                                               
it was  timely.   He said  he is not  aware of  any organizations                                                               
that support or are against this legislation.                                                                                   
                                                                                                                                
2:13:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  asked  whether   this  is  basically  a                                                               
request from the federal government.                                                                                            
                                                                                                                                
MR.  SPANOS  answered  that through  the  IRS  Publication  1075,                                                               
fingerprinting is  required in order  to continue to  receive the                                                               
data.  Although,  he noted, the Tax Division does  not have to be                                                               
compliant; however, the  division wants to be  compliant in order                                                               
to receive that  tax information.  That tax  information has been                                                               
used in  audits bringing in about  $2 million per year  simply by                                                               
pushing a button, he offered.                                                                                                   
                                                                                                                                
2:13:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  surmised that if the  state becomes non-                                                               
compliant by  not passing this legislation,  "basically they just                                                               
don't get as much access so basically protect people's privacy."                                                                
                                                                                                                                
MR.  SPANOS pointed  out  that  as far  as  the  Tax Division  is                                                               
concerned, it would  have less ability to do its  job, and as far                                                               
as Child Support Services Division  (CSSD) is concerned, it would                                                               
not be  able to  do its  job.  Private  individuals would  lose a                                                               
significant amount of  revenue from CSSD, and he  opined that the                                                               
CSSD budget  is supported  66 percent  by federal  dollars, which                                                               
would  be a  large hit  to CSSD.   The  Tax Division  already has                                                               
confidential  state tax  information, but  it does  not have  the                                                               
confidential federal tax information,  and the addition to having                                                               
federal  tax information  does not  make it  more of  a risk,  he                                                               
opined.                                                                                                                         
                                                                                                                                
2:14:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD referred  to the  document titled,  "SSR                                                               
Number  04:5.1.1-Background Investigations,"  and commented  that                                                               
she thought Mr. Spanos had  said that only contractors performing                                                               
the audits would have access to the information.                                                                                
                                                                                                                                
MR.  SPANOS related  his  belief  that Representative  Reinbold's                                                               
question was,  what contractors  have access  to the  federal tax                                                               
information.  Currently, only IT  contractors have access to that                                                               
information  and, he  explained, he  had previously  expanded his                                                               
response that  if the Tax  Division ever hired  other contractors                                                               
to help  with audits, that  they would  also have access  to that                                                               
information.                                                                                                                    
                                                                                                                                
2:15:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   REINBOLD   referred   to   the   above-mentioned                                                               
document, under Information Security  Management Policy and under                                                               
1. Statement of Need, which read as follows:                                                                                    
                                                                                                                                
     Certain   Department   of  Revenue   (DOR)   employees,                                                                    
     interagency    transfers,    contractors,   and    sub-                                                                    
     contractors have  potential access  to or  work closely                                                                    
     with federal taxpayer information (FTI)...                                                                                 
                                                                                                                                
REPRESENTATIVE REINBOLD commented that  the language "goes on and                                                               
on and it just seems like there's  a whole lot more than just IT,                                                               
and a  whole lot more than  potentially just an auditor  maybe in                                                               
the future," and she sees a conflict here.                                                                                      
                                                                                                                                
MR. SPANOS  responded that the  policy was drafted in  an attempt                                                               
to cover all of the bases for anyone  who might need to be on the                                                               
division's  floor as  a contractor,  but  the division  certainly                                                               
limits access to the federal  tax information.  He described that                                                               
this is  an in-place background  check policy regardless  if they                                                               
have access  to the  federal tax information.   For  example, the                                                               
division does  have contractors on  its floor, without  access to                                                               
federal tax information, who assist  the property tax auditors in                                                               
their  assessments.   These  are  non-state employees  performing                                                               
assessments  and because  they  are on  the  division's floor,  a                                                               
background check is performed, he explained.                                                                                    
                                                                                                                                
2:16:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  asked whether the terminated  employee was                                                               
turned over to the police  department for looking up unauthorized                                                               
information.                                                                                                                    
                                                                                                                                
MR.  SPANOS deferred  to Carol  Beecher,  Child Support  Services                                                               
Division (CSSD)  to answer that  question because  employees were                                                               
terminated from that division.                                                                                                  
                                                                                                                                
2:17:49 PM                                                                                                                    
                                                                                                                                
CAROL  BEECHER, Director,  Division  of  Child Support  Services,                                                               
Department  of  Revenue  (DOR),  answered  that  previously,  the                                                               
division   did  uncover   that  employees   had  been   accessing                                                               
information  in the  system, and  the division's  system includes                                                               
federal  tax  information as  well  as  other information.    The                                                               
division  realized that  a mixture  of different  information had                                                               
been accessed, and  because it operates within  a case management                                                               
system,  on a  child support  case a  lot of  the information  is                                                               
contained on  the pages in  its electronic system.   The division                                                               
went through a whole disciplinary  process and the employees were                                                               
dismissed, she offered.                                                                                                         
                                                                                                                                
CHAIR CLAMAN  explained that  the question  was whether  that was                                                               
reported to the police department, troopers, or prosecutors.                                                                    
                                                                                                                                
MS. BEECHER answered that it was not reported.                                                                                  
                                                                                                                                
REPRESENTATIVE LEDOUX asked why it  was not reported because this                                                               
appears to be a fairly serious issue.                                                                                           
                                                                                                                                
MS. BEECHER  related that when  the division goes through  such a                                                               
process and  it gets to  that level,  the process is  through the                                                               
department's  human resources  services division  and the  union.                                                               
She related that  she would have to get back  to the committee as                                                               
to reporting it to law enforcement.                                                                                             
                                                                                                                                
2:19:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX asked  that Ms.  Beecher get  back to  her                                                               
with a response.                                                                                                                
                                                                                                                                
MS. BEECHER said she would get back to the committee.                                                                           
                                                                                                                                
REPRESENTATIVE LEDOUX referred  to the comment that  if the Child                                                               
Support Services  Division (CSSD) did  not have access,  it would                                                               
not  be able  to  obtain the  money.   Except,  she commented,  a                                                               
private attorney  would not  have access and  would have  to work                                                               
through the  discovery process, and she  understood the testimony                                                               
to be that CSSD would not be able to prosecute its cases.                                                                       
                                                                                                                                
2:20:46 PM                                                                                                                    
                                                                                                                                
MS.  BEECHER answered  that the  Child Support  Services Division                                                               
(CSSD)  does  not  have  access  to look  into  IRS  records,  it                                                               
receives  IRS  data from  its  federal  Office of  Child  Support                                                               
Enforcement for the  purposes of federal tax  intercept for child                                                               
support obligations  and arrearages.   In the event  the division                                                               
wanted a  tax return, it would  receive it from the  client or as                                                               
part of  the Federal Intercept  Program, the division  is allowed                                                               
to intercept  a tax  return.   She advised that  as part  of "our                                                               
state plan,"  and as part  of the  Social Security Act,  Part 4D,                                                               
CSSD  is  mandated  to  be  part of  the  Federal  Tax  Intercept                                                               
Program.   In order  to be  compliant, clearly  the CSSD  must be                                                               
able  to obtain  the  IRS  data, and  those  intercept funds  are                                                               
considered to  be IRS data.   She explained that the  division is                                                               
not even  allowed, on its  statements, to indicate that  they are                                                               
IRS Intercept Program funds, they are called "other funds."                                                                     
                                                                                                                                
CHAIR  CLAMAN  referred  to  her  testimony  regarding  receiving                                                               
federal tax  returns and explained  that the  division's interest                                                               
is in the federal tax refunds  from the person not complying with                                                               
their child  support obligations.  The  Federal Intercept Program                                                               
allows the division  to seize that tax refund for  the benefit of                                                               
the person who  is supposed to receive child support  and it does                                                               
not go  to the  taxpayer who  is not  paying their  child support                                                               
obligations, he surmised.                                                                                                       
                                                                                                                                
MS. BEECHER answered that Chair Claman is correct.                                                                              
                                                                                                                                
2:23:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX  asked how  a  private  litigant would  go                                                               
about intercepting tax refund money.                                                                                            
                                                                                                                                
MS.  BEECHER  opined  that  she  does not  believe  it  would  be                                                               
possible,  for the  division's purposes,  without having  a child                                                               
support case with arrearages due.                                                                                               
                                                                                                                                
REPRESENTATIVE LEDOUX  said that  in other  words, "you  would go                                                               
through the courts."                                                                                                            
                                                                                                                                
MS. BEECHER explained that CSSD  is an administrative agency, and                                                               
it is  not required to  go through the  court to intercept  a tax                                                               
refund.                                                                                                                         
                                                                                                                                
2:23:56 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN offered  that generally, if there  are child support                                                               
arrearages, a  court order is  not necessarily needed.   A person                                                               
could  hire a  private lawyer  and  with the  child support  duty                                                               
obligation would go to child  support enforcement and advise that                                                               
Mr. Smith owed his client  $20,000, and child support enforcement                                                               
would investigate  the claim and then  proceed.  In the  event it                                                               
was a civil judgement unrelated  to child support, a person would                                                               
not  have that  same access  to the  federal tax  returns because                                                               
there is a federal statute that  allows access to those funds for                                                               
child support, but not necessarily for other means, he offered.                                                                 
                                                                                                                                
MS.  BEECHER  answered  that  Chair  Claman  was  correct.    She                                                               
explained that there must be a  child support order for the Child                                                               
Support Services Division  (CSSD) to intercept those  funds.  She                                                               
said  she was  unsure whether  Representative LeDoux  was talking                                                               
about  a private  attorney working  with a  client and  explained                                                               
that even if the attorney  wanted that information, there must be                                                               
a child  support order, be  it court created  or administratively                                                               
created.                                                                                                                        
                                                                                                                                
2:25:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD asked whether  the $2 million received by                                                               
the state was all child support money.                                                                                          
                                                                                                                                
MR.  SPANOS responded  that he  was speaking  solely for  the Tax                                                               
Division, and  on average, it  collects approximately  $2 million                                                               
in audits.  He explained that  the audits are what "we call piggy                                                               
back  audits" wherein  the federal  government  had performed  an                                                               
audit,  it then  notified the  division that  the audit  had been                                                               
completed and that the income rose  by "X" dollars.  The division                                                               
then follows up  with a piggy back audit because  the person owes                                                               
the state more money as well.                                                                                                   
                                                                                                                                
REPRESENTATIVE REINBOLD surmised  that it had nothing  to do with                                                               
the Child  Support Services Division  (CSSD), and the  $2 million                                                               
was from taxpayers.                                                                                                             
                                                                                                                                
MR. SPANOS answered that Representative Reinbold was correct.                                                                   
                                                                                                                                
CHAIR CLAMAN pointed out to  Representative Reinbold that [within                                                               
the committee packets] the 4/6/2017  letter from Governor Walker,                                                               
page 2, paragraph 1, references as follows:                                                                                     
                                                                                                                                
     In FY16, CSSD collected over $8.6 million in past due                                                                      
      child support through the federal tax refund offset                                                                       
     program.                                                                                                                   
                                                                                                                                
2:26:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  asked whether  the state has  a database                                                               
or  do  the  300  employees  simply  have  access  to  a  federal                                                               
database, and  whether it  is linked  to the  (indisc.) database.                                                               
She explained that she was interested in data security.                                                                         
                                                                                                                                
MR. SPANOS replied that the database  is made by a company called                                                               
Fast Enterprises, it  is a GenTax system that  is "customized off                                                               
the shelf"  and the  division refers  to it  as "the  tax revenue                                                               
management system  or TRMS."  It  is within that system  that all                                                               
of the state and federal tax  information for the Tax Division is                                                               
stored, he explained.                                                                                                           
                                                                                                                                
CHAIR CLAMAN reminded Representative  Reinbold that the committee                                                               
will not keep  going down the path of data  breaches as there has                                                               
been no indication of data breach issues from this department.                                                                  
                                                                                                                                
2:28:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  said that the testimony  sounds like one                                                               
employee  had  been  terminated  "due to  a  child  payment  type                                                               
situation"  that was  not  reported  to the  police.   She  asked                                                               
whether anyone had ever received a misdemeanor                                                                                  
                                                                                                                                
CHAIR CLAMAN  noted that  the question  is whether  anyone, other                                                               
than the  dismissed employee, had  ever been charged  with crimes                                                               
related to improper data access.                                                                                                
                                                                                                                                
MR. SPANOS responded  that he would have to get  back to her, but                                                               
during his time  as deputy director, the  division has terminated                                                               
at least one employee for releasing confidential information.                                                                   
                                                                                                                                
REPRESENTATIVE REINBOLD  commented that  there are  300 employees                                                               
with access,  and the policy was  put in place on  February 2016.                                                               
It appears that the temptation could  be there to access the data                                                               
and distribute  it whether  or not  they are  caught.   She asked                                                               
whether  there was  any history  of  more than  one person  being                                                               
terminated, and whether there was a class A misdemeanor.                                                                        
                                                                                                                                
CHAIR  CLAMAN  pointed  out  that  Representatives  Reinbold  and                                                               
Eastman have multiple questions on  this same topic and they have                                                               
been adequately asked and answered.                                                                                             
                                                                                                                                
2:30:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN opined that at  the point a person reaches                                                               
that ten-year  period, and in  looking back the  background check                                                               
at the  national database  level will  list any  convictions, and                                                               
the division will be alerted to those convictions.                                                                              
                                                                                                                                
CHAIR  CLAMAN expressed  that this  question has  been asked  and                                                               
answered so  many times he  could not  even count them,  and this                                                               
question would not be asked again.                                                                                              
                                                                                                                                
2:30:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN referred  to  "that ten  years look  back                                                               
going forwards,"  and asked whether  it would be common  sense to                                                               
also  do a  look back  backwards  for some  period of  time.   He                                                               
opined that  the committee has  not recommended that  option, but                                                               
he would be  interested to know why the committee  would not want                                                               
to have,  at least, a five  year look back.   Currently, he said,                                                               
the federal  government asked Alaska  to perform  this background                                                               
check and  if someone  lied on their  job application  last week,                                                               
"we  really don't  want  to  know about  that"  because they  are                                                               
already employed and "we can't do anything about it."                                                                           
                                                                                                                                
MR. SPANOS related that that  issue is something the division can                                                               
look  at  and consider.    He  reiterated that  the  department's                                                               
Criminal Investigation Unit  runs this background check  and if a                                                               
crime showed  up for  an employee hired  last week,  the Criminal                                                               
Investigation Unit would notify the  division and it would review                                                               
the  person's  application to  verify  that  the information  was                                                               
listed.   The  division  does try  to use  common  sense, but  in                                                               
drafting a  policy on  whether it  will retain  or not  retain an                                                               
employee, it really  does have to get down to  the specifics.  He                                                               
said, "This was shared" with  the unions, they had an opportunity                                                               
to comment,  and it  was finalized.   The division  has certainly                                                               
prepared policies  relating to protecting information,  except it                                                               
has  never created  a  policy based  on  performing a  background                                                               
check.  In that  the policy is new, the division  did not want to                                                               
get  cross-ways with  the unions  or tenured  employees in  going                                                               
back  15-20 years  ago as  to whether  they did  not disclose  an                                                               
unrelated  crime.    Certainly,  he commented,  the  division  is                                                               
trying to use common sense in this as well.                                                                                     
                                                                                                                                
2:33:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  asked when will the  [DOR] committee look                                                               
at that issue and get an answer back to this committee.                                                                         
                                                                                                                                
CHAIR CLAMAN  expressed that this  legislation is not  about that                                                               
policy,  this  is  about fingerprinting.    The  House  Judiciary                                                               
Standing Committee is not revisiting  the division's policy so he                                                               
does not  see how  his questions  have anything  to do  with this                                                               
bill.  Chair  Claman asked Representative Eastman  to explain how                                                               
that  has  anything  to  do  with  the  bill  in  front  of  this                                                               
committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE EASTMAN  answered that  the state pays  to perform                                                               
these background  checks and  he would like  to know  that common                                                               
sense is being applied.                                                                                                         
                                                                                                                                
CHAIR CLAMAN  stressed that "You've  done the best you  can," but                                                               
the state is spending the  money on the background checks already                                                               
and  this bill  allows  that fingerprinting  is  included in  the                                                               
background checks.                                                                                                              
                                                                                                                                
2:34:00 PM                                                                                                                    
                                                                                                                                
CHAIR  CLAMAN  opened   public  testimony  on  HB   219.    After                                                               
ascertaining no  one wished to  testify, closed  public testimony                                                               
on HB 219.                                                                                                                      
                                                                                                                                
2:34:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  asked  when  amendments  would  be  due                                                               
because the committee had not had a chance to amend the bill.                                                                   
                                                                                                                                
2:34:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES requested  confirmation that  the proposed                                                               
legislation does not  allow any additional people  access to this                                                               
information;   it  simply   states  that   the  state   needs  to                                                               
fingerprint current and new employees.                                                                                          
                                                                                                                                
MR. SPANOS  answered that Representative Stutes  was correct, the                                                               
bill only asks for authority to perform fingerprinting.                                                                         
                                                                                                                                
REPRESENTATIVE STUTES  requested verification  that the  bill has                                                               
nothing to do  with additional access, where  the division stores                                                               
its database, or anything else along those lines.                                                                               
                                                                                                                                
MR. SPANOS advised that Representative Stutes was correct.                                                                      
                                                                                                                                
2:35:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN  commented  that  it is  the  custom  and                                                               
practice of this committee to  wait until the committee had heard                                                               
public  testimony  before  submitting amendments  to  Legislative                                                               
Legal and Research Services.                                                                                                    
                                                                                                                                
CHAIR  CLAMAN said  that the  committee did  not hear  any public                                                               
testimony, and what are his comments on the bill.                                                                               
                                                                                                                                
REPRESENTATIVE   EASTMAN  commented   that   it   has  been   the                                                               
committee's  practice to  hear public  testimony,  whether it  is                                                               
long,  short,  or  non-existent,  before  contacting  Legislative                                                               
Legal and Research Services to  discuss amendments.  He requested                                                               
24 hours concerning an amendment he would like to propose.                                                                      
                                                                                                                                
2:36:09 PM                                                                                                                    
                                                                                                                                
CHAIR  CLAMAN   asked  Representative  Eastman  to   explain  the                                                               
amendment he would like to propose.                                                                                             
                                                                                                                                
REPRESENTATIVE  EASTMAN  said  he  would  like  to  discuss  with                                                               
Legislative Legal and Research Services  whether the laws need an                                                               
amendment, he  thinks they might and  he would like to  have that                                                               
conversation before bringing something to the committee.                                                                        
                                                                                                                                
CHAIR  CLAMAN  pointed  out  that  this  bill  has  been  on  the                                                               
committee's  agenda   since  last  Friday,  and   he  asked  what                                                               
prevented  Representative Eastman  from having  that conversation                                                               
in the last several days.                                                                                                       
                                                                                                                                
REPRESENTATIVE  EASTMAN  answered  that   no  deadline  had  been                                                               
assigned for amendments  because the bill had  not been discussed                                                               
in committee.                                                                                                                   
                                                                                                                                
2:36:49 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN asked  whether there were any other  comments on the                                                               
bill other than the desire to take up amendments.                                                                               
                                                                                                                                
REPRESENTATIVE REINBOLD said the bill  was filed in 2017, and Mr.                                                               
Spanos testified that this was the first hearing on the bill.                                                                   
                                                                                                                                
MR. SPANOS said that Representative Reinbold was correct.                                                                       
                                                                                                                                
REPRESENTATIVE REINBOLD related that it  is the first hearing and                                                               
"we've got a whole  lot of stuff going on.   He couldn't answer a                                                               
ton  of  questions that  we  had."    She described  that  public                                                               
testimony was about 15 seconds ...                                                                                              
                                                                                                                                
CHAIR  CLAMAN   interjected  that   he  understands  she   has  a                                                               
perspective  about  the  public  testimony,  but  in  fact,  this                                                               
hearing had been noticed for some  time and not one single member                                                               
of  the public  chose  to testify  (audio  difficulties) for  not                                                               
coming and testifying.  It is  his belief, he commented, that the                                                               
public not  testifying indicates  that they are  comfortable with                                                               
this bill because it had been noticed.                                                                                          
                                                                                                                                
REPRESENTATIVE  REINBOLD  related  that  she  had  said  that  15                                                               
seconds  was  a ridiculous  amount  for  public testimony.    She                                                               
opined that  the public would want  to weigh in on  this bill and                                                               
they want legislators to offer amendments ...                                                                                   
                                                                                                                                
CHAIR  CLAMAN   asked  Representative  Reinbold  to   direct  her                                                               
comments  to the  bill  and  not comments  trying  to attack  the                                                               
chair.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  REINBOLD said  she  has deep  concerns with  this                                                               
bill, it is  the committee's first hearing, and the  bill has not                                                               
been  well vetted.   She  offered concern  regarding the  400,000                                                               
taxpayers  and  approximately   [17,000]  corporations  that  pay                                                               
income  tax  wherein the  300  employees  could potentially  have                                                               
access to confidential  information.  She said that  she does not                                                               
understand  why the  committee is  "cramming  this through  right                                                               
now," and  she will be a  no-vote in moving this  legislation out                                                               
of committee.                                                                                                                   
                                                                                                                                
2:39:01 PM                                                                                                                    
                                                                                                                                
CHAIR  CLAMAN,   in  response  to  Representatives   Eastman  and                                                               
Reinbold's  request, said  that  the deadline  for amendments  is                                                               
5:00 on Thursday.  He related  that an amendment will be prepared                                                               
to change the effective date of HB  219 from July 1, 2017 to July                                                               
1, 2018.                                                                                                                        
                                                                                                                                
[HB 219 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB219 ver A 3.7.18.PDF HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Transmittal Letter 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Sectional Analysis 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Supporting Document-IRS Publication 1075 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Fiscal Note DPS-CJISP 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Fiscal Note DHSS-ASS 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Fiscal Note DOLWD-UI 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Fiscal Note DOR-CSSD 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Fiscal Note DOR-TAX 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219
HB219 Additional Document-DOR Information Security Management Policy 3.7.18.pdf HJUD 3/7/2018 1:00:00 PM
HJUD 3/9/2018 1:00:00 PM
HB 219