BISMARCK - Cass County's top law enforcement officials testified against a bill Tuesday they say would put handcuffs on their ability to investigate white-collar crime.
House Bill 1088, introduced at the request of the state tax commissioner's office, would put restrictions on law enforcement's access to tax return information.
Donitta Wald, general counsel for the tax department, said the bill seeks to protect confidentiality of taxpayer records.
But Cass County Sheriff Paul Laney testified it would hinder authorities from investigating ongoing criminal enterprises in which tax records would be important.
Aaron Birst, representing the North Dakota Association of Counties in opposition to the bill, said prosecutors don't want to rummage through people's tax records, they're only interested in the documents if they could help a case.
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"You could have an Enron situation in North Dakota where millions of people are bilked out of their money and law enforcement could not get those tax records," Birst said.
Tax Commissioner Cory Fong said the bill stems from a search warrant his office received last summer from Cass County prosecutors.
Fong said his agency complied with the request, but he fears providing information through search warrants could put private taxpayer information at risk.
Cass County State's Attorney Birch Burdick said his office issued the search warrant after trying for months to obtain the information. As with all search warrants, the request was reviewed by a judge, he said.
Burdick, who did not name the case because it's still ongoing, said this was the first time in 10 years his office sought tax information.
But he anticipates it could become more common as white-collar crime grows. Tax information could also be helpful for securities crimes and drug cases that involve hiding assets, Burdick said.
The original bill as introduced by the tax department would have been "unworkable," Burdick said.
It said the tax department would not disclose records under subpoena or court order unless the investigation involved violence, kidnapping or national security.
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The tax commissioner's office introduced amendments Tuesday that would allow for release of information, but only after a court process had been satisfied.
The amendments are a step in the right direction, but still unnecessary Burdick said.
"I don't think any change is warranted," Burdick said.
Rep. Wes Belter, chairman of the House Finance and Taxation Committee, said legislators would like to see the two agencies work out some middle ground.
However, Belter, R-Mapleton, said the committee has a history of supporting confidentiality of records.
Readers can reach Forum reporter Amy Dalrymple at (701) 241-5590
