Health and Welfare committee introduces RS 31795 to let department seek tax data in benefit-fraud probes

Jared Larson, Legislative and Regulatory Affairs chief at the Department of Health and Welfare, told the Health and Welfare Committee that RS 31795 would allow the department to enter a memorandum of understanding with the State Tax Commission to receive tax information in suspected benefit-fraud cases.

Larson said the code section at issue “governs benefit fraud” and that the department currently uses subpoenas for bank records to determine income, which he characterized as “a pretty intrusive process that goes into great detail about how people use their money.” He said subpoenas can be difficult to enforce against out-of-state financial institutions. Larson said adjusted gross income is recorded in tax filings and that receiving that information from the Tax Commission would “significantly relieve the burden on investigating suspected fraud.”

Larson told the committee the Tax Commission “does not have any objection” to the proposed authority and that the department has pursued the change for roughly two years. He also thanked Representative Fuhrman for agreeing to sponsor the bill should the request statement (RS) be printed.

Representatives discussed a handful of technical edits before the motion. Representative Wheeler pointed out a minor grammatical issue in the RS; Larson said staff would note the typo and correct it. Representative Rubel asked whether correcting the RS text required a separate motion; the committee chair replied that the RS language (the request statement) can be edited and the motion to introduce did not need a substitute motion to correct typographical items. Representative Grama noted a word choice in the fiscal note and suggested changing “recuperate” to “recover.”

Representative Redmond moved to introduce RS 31,795; Representative Wheeler seconded. The committee voted by voice; the chair recorded the motion as passing and announced, “RS 31,795 is introduced.” The transcript records a voice vote with committee members saying “aye”; no roll-call tally or individual yes/no counts appear in the transcript.

The RS would add a new subsection to the chapter that governs benefit-fraud investigations to authorize the Department of Health and Welfare to receive tax information via an MOU with the State Tax Commission. The committee did not take further substantive action at the meeting; Larson said a printed bill and a hearing would give the committee an opportunity to discuss implementation details.

The meeting lasted a short period, covered only RS 31,795 on the agenda, and adjourned after the introduction vote. Larson and department staff indicated they would return with a printed bill and additional detail if the RS is printed and scheduled for a hearing.