Legislature(1995 - 1996)

04/20/1995 01:40 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE BILL 78                                                                
                                                                               
       "An Act relating  to the  maximum amount of  assistance                 
       that may be  granted under the adult  public assistance                 
       program  and  the  program  of  aid  to  families  with                 
       dependent children; proposing  a special  demonstration                 
       project  within  the program  of  aid to  families with                 
       dependent children  and  directing  the  Department  of                 
       Health and  Social Services  to seek  waivers from  the                 
       federal government to implement the project."                           
                                                                               
  Co-Chair Hanley provided an  overview of HB 78.   He pointed                 
  out that the intent  of welfare reform is to get  people off                 
  welfare.    According  to  a  recent  survey  by  the  State                 
  Department  of Health  and Social  Services,  88% of  Aid to                 
  Families  with Dependent Children  (AFDC) clients  in Alaska                 
  have  indicated  that they  would  rather  work than  be  on                 
  welfare.                                                                     
                                                                               
  Co-Chair Hanley  stated that  HB 78  would  provide for  the                 
  Department  of Health  and Social  Services to  apply for  a                 
  series of waivers  from the usual provisions  governing AFDC                 
  programs.   A "workfare"  project would  be established  and                 
  would require able-bodied recipients who were not working at                 
  least 15 hours a  week to perform community service  or have                 
  their benefits reduced.                                                      
                                                                               
  Co-Chair Hanley concluded that the legislation would provide                 
  positive  incentives to  work in  the form of  higher income                 
  allowance and higher vehicle allowance.   The costs of child                 
  care and  transportation necessary for participation  in the                 
                                                                               
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  program would be covered  by the Department.  He  added that                 
  HB 78 would be an initial step towards breaking the cycle of                 
  dependence on welfare by rewarding hard work.                                
                                                                               
  Co-Chair  Hanley  provided  a   sectional  analysis  of  the                 
  legislation.   HB 78 amends  existing statutes for  the AFDC                 
  program.  The legislation would  authorize the Department to                 
  seek  federal  approval  to operate  four  experimental AFDC                 
  demonstration  projects  under   the  authority  of  Section                 
  1115(a) of the  Social Security  Act, which would  authorize                 
  imposition of certain modified AFDC eligibility criteria and                 
  requirements for  participation in a mandatory  work program                 
  for project  participants.   The project  would establish  a                 
  ratable reduction in  benefit payments for the  AFDC program                 
  statewide.                                                                   
                                                                               
  Co-Chair  Hanley added, under the waiver,  a person would be                 
  allowed to receive up to $200  hundred dollars for the first                 
  amount of money  made and that,  they would be able  to keep                 
  1/3 of the remainder made.   This would provide an incentive                 
  for people while also allowing them to  improve their status                 
  by working  and at  the same  time would  help the  State by                 
  reducing the amount of money spent.                                          
                                                                               
                                                                               
  (Tape Change, HFC 95-89, Side 1).                                            
                                                                               
  Co-Chair  Hanley  continued explaining  each section  of the                 
  bill.    He   reiterated  that   the  Department  would   be                 
  responsible for  paying  the child  care  costs as  well  as                 
  transportation  costs.   One  of  the fiscal  notes included                 
  would cover those expenses.                                                  
                                                                               
  JIM  NORDLUND,  DIRECTOR,  DIVISION  OF  PUBLIC  ASSISTANCE,                 
  DEPARTMENT  OF  HEALTH  AND  SOCIAL  SERVICES,  stated  that                 
  Section  #7   would  establish  an  AFDC  unemployed  parent                 
  demonstration   project,   to  assist   two-parent  families                 
  establish self-sufficiency within three years.                               
                                                                               
  He added that  Section #8 would establish  a self-employment                 
  demonstration  project to assist AFDC recipients in reducing                 
  their need  for benefits by  allowing them to  establish and                 
  operate a microenterprise.   Co-Chair Hanley commented  that                 
  the current system prohibits participants from  saving money                 
  as it would place them over the asset limit.                                 
                                                                               
  Representative Grussendorf  spoke in  favor of  the proposed                 
  programs,  although  expressed  hesitation on  the  proposed                 
  program funding.    He communicated  that the money to  fund                 
  the  program would  be  taken from  those  already poor  and                 
  making them more poor  for making the experiment work.   Mr.                 
  Nordlund added, a  rateable reduction  of 1.7% amounting  to                 
                                                                               
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  $13 dollars per month per one adult  and child unit would be                 
  added.   He stressed that  the current system  would operate                 
  the same, although there would be demonstration projects for                 
  certain selected persons receiving AFDC.  The auto exemption                 
  would not apply for all AFDC participants in the State.                      
                                                                               
  Co-Chair  Hanley  commented on  Section #9,  the "diversion"                 
  demonstration  project,   which  would   offer  short   term                 
  financial  assistance to job-ready  AFDC applicants in order                 
  to avoid long-term financial support.                                        
                                                                               
  Representative Martin asked  the intent  of the language  on                 
  Page 8,  Line 18, "(2)  disregard up to  $500 each  month in                 
  nonbusiness  income  set   aside  for  the  development   or                 
  operation of the microenterprise;".                                          
                                                                               
  CURTIS  LOMAS, WELFARE  REFORM PROGRAM,  DIVISION OF  PUBLIC                 
  ASSISTANCE,  DEPARTMENT  OF   HEALTH  AND  SOCIAL  SERVICES,                 
  explained that  language provided  a provision  to allow  an                 
  individual to set aside income from some source other than a                 
  business as a way to capitalize.   The provision would allow                 
  the AFDC individual to  accrue up to $500 dollars  per month                 
  and  place into  a business  capital account with  a maximum                 
  limit of $10  thousand dollars.   That amount  would not  be                 
  considered as income.                                                        
                                                                               
  Representative  Martin  questioned  how the  Permanent  Fund                 
  Dividend  checks  and  share  holding  reimbursements  would                 
  affect  a   persons  qualifications  to   receiving  welfare                 
  subsidies.  Mr. Nordlund stated that  the bill would have no                 
  effect on any AFDC recipients  dividend check resulting from                 
  the  "hold harmless"  provision in  current law.   Mr. Lomas                 
  added, in terms of the PFD checks, the "hold harmless" would                 
  allow a four  month investment limit.   Currently, a  person                 
  could  set  aside  the  check  into  a  savings account  and                 
  continue  to have their eligibility protected for up to four                 
  months.  If  that person  chose to place  that saved  amount                 
  into  a  microenterprise account,  a  limit would  no longer                 
  exist.                                                                       
                                                                               
  Mr. Nordlund added that there  would be administrative costs                 
  associated with the new demonstration projects.  In order to                 
  move  forward  with  welfare  reform,  to move  people  from                 
  welfare to work, new ideas must  be tried.  He applauded all                 
  demonstration projects found  in the bill stating  that they                 
  are good ideas and worthy of testing.                                        
                                                                               
  Representative  Martin  criticized  encouraging any  further                 
  exemptions  to  the welfare  program.   Mr.  Lomas clarified                 
  information regarding dividend payments received from Native                 
  corporations.  He stated that  as a part of the 1988  Native                 
  Claim  Settlement  Act,  a  $2  thousand  dollar  limit  was                 
                                                                               
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  established in federal law; this was not a state policy.  He                 
  added  that this  was  not an  exclusive  Alaskan policy  as                 
  referenced by Representative Martin.                                         
                                                                               
  KIRSTEN  MARTIN,  SELF,  PRISONERS  OF  WELFARE  WORKING  ON                 
  WINNING, ANCHORAGE, provided the Committee with a handout of                 
  the  monthly  expenditures for  the average  AFDC recipient.                 
  [Attachment #2].                                                             
                                                                               
  She asked for  further consideration of  the portion of  the                 
  legislation requiring  the under eighteen  welfare recipient                 
  to  live with the  parent which would  require that parent's                 
  income  to  be  the  determinant  in  deciding  the  medical                 
  expenses of the AFDC recipient.  She directed her concern to                 
  "breaking"  the  grandparent's  "pocket book".    Ms. Martin                 
  requested  that   language   be  changed   to  exempt   that                 
  responsibility.                                                              
                                                                               
  Mr. Lomas instructed that federal law computes the income of                 
  a parent when  the child is living with them.  He added that                 
  the bill  could  change that  policy, however,  the way  the                 
  legislation  is  structured, there  is  a federal  option to                 
  require teens  to live  at home.   To  change that  language                 
  would depend  on the State  of Alaska adopting  that option.                 
  He added, that section  of the bill was not  a demonstration                 
  project, but was a portion of the bill which was an exercise                 
  as an option  of federal  law.  To  change that  "treatment"                 
  would require a waiver of that portion of the bill.                          
                                                                               
  Representative  Martin  interjected  that   supporting  that                 
  waiver would encourage  more teenage parents to  leave home.                 
  Representative  Martin  cited  the  responsibility  of   the                 
  biological father.  Ms. Martin discussed the lengthy time it                 
  takes for the  Child Support  Enforcement Agency to  enforce                 
  child support.   She personally  has waited  for five  years                 
  without  any child  support compensation.    Co-Chair Hanley                 
  advised that there  is not  much flexibility within  current                 
  laws.                                                                        
                                                                               
  Representative Brown asked what a cut to the benefits  would                 
  mean to  someone receiving AFDC.   Ms. Martin  affirmed that                 
  she  was  fortunate in  that  she currently  received rental                 
  assistance.  Without rental assistance,  she stated that she                 
  would most  likely lose her  housing.   Ms. Martin  stressed                 
  that  a  ($15) fifteen  dollar  cut  would  be dramatic  for                 
  someone on  such a  "tight" budget.   Ms. Martin  emphasized                 
  that all  shelters and  most churches  are full;  food banks                 
  have reached their limit.  She  stated that many people will                 
  loose their homes and the end product will be that many more                 
  children  will be  taken  by Division  of  Family and  Youth                 
  Services  (DFYS)  because  the  parents  will no  longer  be                 
  adequately able to  support the child's  needs.  She  added,                 
                                                                               
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  currently  there  are  not  enough  foster parents  for  the                 
  children needing home placements.                                            
  Ms. Martin remarked that she was involved in creating a self                 
  sufficiency group  with other AFDC  recipients through local                 
  networking.    Some  of  the   items  targeted  through  the                 
  networking are  child care  and transportation  needs.   She                 
  agreed  that  there  are  failures  in the  present  system,                 
  although there  are many AFDC  recipients who are  trying to                 
  find ways to better themselves.                                              
                                                                               
  SHERRIE GOLL,  ALASKA WOMEN'S  LOBBY/KIDPAC, JUNEAU,  stated                 
  that HB 78 was clearly the most rational approach considered                 
  by the Legislature, pointing out that  it was full of things                 
  which removed disincentives for families  to become employed                 
  and stay employed.                                                           
                                                                               
  Ms.  Goll focused  on  specific areas  of  concern with  the                 
  proposed  legislation.   The  first  concern of  the Women's                 
  Lobby is the teen parent project.  Ms. Goll pointed out that                 
  Alaska  has a high teen birth rate.  In 1993, 1189 teenagers                 
  had babies.  The total case load of teen parents on  AFDC is                 
  141.  She noted that the  vast majority of teenagers who are                 
  having children, are living  at home with their parents  and                 
  being supported.                                                             
                                                                               
  Ms. Goll applauded the exemptions for those with no parental                 
  support,  or  if the  home of  the  teenager was  an abusive                 
  situation and the  teen could not  live there.  She  pointed                 
  out that 70 recipients would be affected by the project.  In                 
  determining each case, investigation would be required.                      
                                                                               
  Ms. Goll emphasized that her main  concern would be with the                 
  health  care  needs  of  a   pregnant  teenager.    Pregnant                 
  teenagers have poor  health outcomes  which often mean  poor                 
  health outcomes for  their children.   Premature births  are                 
  much more common in teens, and most of the low birth  weight                 
  babies born prematurely will have health problems throughout                 
  their  life.   Ms.  Goll emphasized  that  prenatal care  is                 
  important as is  good nutrition as  well as the delivery  of                 
  the child.                                                                   
                                                                               
  In  considering  the  parents  income,  the  minor  will  be                 
  required  to  live at  home as  a condition  of eligibility.                 
  Unless the parent of the minor  is also on welfare, the teen                 
  would not be  eligible for any  assistance.  The concept  of                 
  holding the parents income harmless in  some way so that the                 
  teen could be  eligible for assistance necessary  for her to                 
  have a healthy baby needs to be reconsidered if that section                 
  remains in the bill.                                                         
                                                                               
  Ms. Goll  continued  addressing other  issues regarding  the                 
  personal responsibility  of the  "other" parent  of the  new                 
                                                                               
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  baby.  In 60% of the cases where a teenage girl is pregnant,                 
  the father of that child is an adult.   Ms. Goll recommended                 
  that the State provide active child support collection.  The                 
  other 40% of the  fathers are teen age boys.   The family of                 
  the teenage  girl is required to take personal and financial                 
  responsibility for the  teenager and new baby,  although the                 
  same  responsibility  is  not  required  of the  teen  dad's                 
  family.    Ms. Goll  emphasized  that consideration  of that                 
  section of the bill be given deeper scrutiny or that section                 
  of the bill be dropped.   Ms. Goll requested that one  other                 
  exemption be considered.                                                     
                                                                               
  (Tape Change, HFC 95-89, Side 2).                                            
                                                                               
  Ms. Goll stated that if a student is enrolled in a four year                 
  education program, they  should not be  required to work  20                 
  hours a week as well.                                                        
                                                                               
  Ms. Goll spoke to the "unemployed"  parent project.  Until a                 
  few years ago, AFDC was only available to single parents who                 
  had dependent  children.   In 1988,  there was  a change  in                 
  federal  law, which  indicated that  law  broke-up families.                 
  The federal  law mandated on states that two parent families                 
  should be  included in welfare  eligibility when one  of the                 
  parents was unemployed.   She pointed out that at  that time                 
  case  loads grew significantly.  She  noted that by October,                 
  that mandate could be terminated.                                            
                                                                               
  Much of the JOBS training money currently is distributed for                 
  the two parent families.  Those are the persons who  will be                 
  greatly affected by the hundred hour rule.  That group could                 
  most  benefit from  the  limit and  could  live within  that                 
  restraint.                                                                   
                                                                               
  Ms.  Goll  opposed   the  rateable   reductions.     Without                 
  subsidized  housing, of which  only 20% percent  of the AFDC                 
  recipients qualify, an AFDC recipient could not make it with                 
  a $15  dollar monthly  reduction.   She emphasized  that the                 
  costs of  welfare changes  should be  offset with  increased                 
  child support collections.                                                   
                                                                               
  Ms. Goll noted that major changes on the federal level would                 
  be occurring by October.  She  added that these changes will                 
  probably block  grant the funds  and will  most likely  come                 
  with  less  restrictions,  rather  than  new  and  different                 
  restrictions.     However,  the  welfare   system  will   be                 
  redesigned.    She  requested that  the  Committee  consider                 
  putting off changes to the welfare system  until the federal                 
  changes  have been  made.  Ms.  Goll suggested  changing the                 
  effective  dates   for  applying  for  the  "waivers"  until                 
  January, 1996.                                                               
                                                                               
                                                                               
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  Ms. Goll  urged the  Committee to  consider off-setting  the                 
  cost of the programs other than on the "backs  of the poor".                 
   She pointed out that action  would hurt 14,000 children  in                 
  Alaska.                                                                      
                                                                               
  HB 78 was HELD in Committee for further consideration.                       

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