(a) The department shall establish an enhanced computerized income, asset, and identity eligibility verification system for the purposes of verifying eligibility, eliminating duplication of public assistance payments, and deterring waste and fraud in public assistance programs administered by the department under AS 47.05.010. Nothing in this section prohibits the department from verifying eligibility for public assistance through additional procedures or authorizes the department or a third-party vendor to use data to verify eligibility for a federal program if the use of that data is prohibited by federal law.

(b) The department shall enter into a competitively bid contract with a third- party vendor for the purpose of developing a system under this section to prevent fraud, misrepresentation, and inadequate documentation when determining an applicant's eligibility for public assistance before the payment of benefits and for periodically verifying eligibility between eligibility redeterminations and during eligibility redeterminations and reviews. The department may also contract with a third-party vendor to provide information to facilitate reviews of recipient eligibility and income verification.

(c) The annual savings to the state resulting from the use of the system under this section must exceed the cost of implementing the system. A contract under this section must require the third-party vendor to report annual savings to the state realized from implementing the system. Payment to the third-party vendor may be based on a fee for each applicant and may include incentives for achieving a rate of success established by the department for identifying duplication, waste, and fraud in public assistance programs.

(d) To avoid a conflict of interest, the department may not award a contract to provide services for the enrollment of public assistance providers or applicants under this title to a vendor that is awarded a contract under this section.