The chairman of the Senate Judiciary Committee wants to make lying on permanent fund dividend applications a felony punishable by up to five years in prison.
The bill by Sen. Ralph Seekins, R-Fairbanks, also calls for creating a special investigative group to root out dishonest applicants.
There are already investigators working within the state Department of Revenue's Permanent Fund Dividend Division. But designating the group would allow the division to apply for access to federal records of suspects, which it can't do now when seeking out people receiving a dividend payment while living outside Alaska, division director Sharon Barton said.
"In practice, it wouldn't change anything," she said. "It makes our case for access stronger."
More than 600,000 Alaskans received nearly $920 in last year's dividend payout from the fund. The dividends are calculated from a five-year average of the fund's investment income. The fund itself, started in 1976 as an investment account for oil royalties, is today worth more than $30 billion.
About 635,000 people apply for dividends every year.
Last year, more than 1,600 fraud tips were checked out and 1,700 applications were suspected of being fraudulent, said Brian Hove, an aide to Seekins who presented the bill Tuesday to the Senate State Affairs Committee.
That resulted in $1.4 million in denied dividends, three federal indictments and one conviction for fraud, he said.
Seekins' bill would not only increase the punishment for offenders, it would also serve as a deterrent to people considering lying on an application, proponents of the measure contend.
After H. Christopher Nelson was convicted in January and sentenced to 15 months in federal prison for claiming to be two people and receiving two dividend checks, 14 people immediately withdrew their applications for the 2005 dividend, PFD division investigator Daniel Boone said.
Under Seekins' measure, if somebody submits a dividend application knowing he is not eligible, lies on the application or makes a false statement about his eligibility to a public worker, he commits a class C felony.
Under current law, knowingly making a false statement in an application for a benefit, such as a dividend check, is a misdemeanor that carries a term of imprisonment of up to a year.