Legislature(1995 - 1996)
05/01/1996 02:00 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 89 An Act relating to the members of the board and staff of the Alaska Permanent Fund Corporation. Co-Chair Hanley provided members with a proposed committee substitute, Work Draft #9-LS0683\R, dated 4/30/96 (copy on file). SENATOR STEVE RIEGER, SPONSOR, compared the proposed work draft for SB 89 to the previous version, HCS CSSB 89 (STA). He noted that the individuals that could be selected would have competence and experience in investment portfolio management. The word "wide" was deleted before "experience" in the proposed committee substitute. The definition of cause in Section 4, Subsection (3) was deleted. Section 6 of the proposed committee substitute was clarified by additional language: "The executive director and other employees with investment responsibilities serve at the pleasure of the board, except that the board may enter into employment contracts that do not exceed two years' duration." 2 Section 6, HCS CSSB 89 (STA), was deleted and a new sentence was added: "Each board member has a fiduciary duty to the fund, and each member shall perform official actions solely in accordance with that duty." Representative Brown questioned if employees would be hired by the Board. Senator Rieger clarified that employees would serve at the pleasure of the Board. Representative Martin questioned the use of "prudent". Senator Rieger clarified that "prudent" is in current statute. He explained the prudent investor rule. He referred to HB 525. Representative Parnell MOVED to adopt the proposed committee substitute, Work Draft #9-LS0683\R, dated 4/30/96. There being NO OBJECTION, it was so ordered. Representative Brown provided members with Amendment 1 (copy on file). She explained that Amendment 1 would delete Section 4, page 2, lines 8 - 20. Senator Rieger maintained that Amendment 1 would "gut" the bill. He stressed that the legislation would help assure that staggered terms occur and put an end to the practice of each new Governor placing their own people on the Board. He asserted that the change of management is detrimental. Representative Brown WITHDREW Amendment 1. Representative Martin MOVED to report HCS CSSB 89 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. HCS CSSB 89 (FIN) a "do pass" recommendation and with a fiscal impact note by the Department of Revenue, 3/8/96. SENATE BILL NO. 98 An Act making changes related to the aid to families with dependent children program, the Medicaid program, the general relief assistance program, and the adult public assistance program; directing the Department of Health and Social Services to apply to the federal government for waivers to implement the changes where necessary; relating to eligibility for permanent fund dividends of certain individuals who receive state assistance, to notice requirements applicable to the dividend program; and providing for an effective date. LOUISE CHARLES, TANANA CHIEFS CONFERENCE (TCC) testified that TCC is opposed to the provision requiring grandparents to assume child support payments for their grandchildren or great grandchildren. She noted that in many cases grandparents are on fixed, limited or no income. She maintained that this requirement would be a detriment to a family structure that allows grandchildren to remain within a family unit, rather than being placed in foster care. (Tape Change, HFC 96-153, Side 2) DON SHIRCEL, DIRECTOR, FAMILY AND YOUTH SERVICES, TANANA CHIEFS CONFERENCE, in response to a question by Representative Martin, stated that individual villages within the Interior would have a preference as to the administration of programing. Representative Brown questioned if permanent fund dividend eligibility would be affected by the legislation. JIM NORDLUND, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES stated that permanent fund dividend eligibility would not be affected. He explained that the legislation is divided into welfare reform through waivers and comprehensive welfare reform. Welfare reform through waivers would take place if federal reforms are not initiated. If federal welfare reform is enacted the legislation would implement welfare reform in a comprehensive manner. Both forms would cut benefits for two parent families for the months of July, August and 4 September. Mr. Nordlund maintained that in a two parent family, where a parent has the ability to participate in summer employment or subsistence activities, that a cut in the benefit during this time is a fair way to look at reducing the program. MIKE TIBBLES, STAFF, SENATOR GREEN noted that the seasonal benefit reduction is contained on page 17, lines 24 -25. One or both of the parents could be unemployed. CURTIS LOMAS, WELFARE REFORM PROGRAM, DEPARTMENT OF HEALTH AND SOCIAL SERVICES explained that eligibility is measured against the principle wage earner's employment. In response to a question by Representative Martin, Mr. Lomas discussed the definition of "family". He noted that the child must be living with someone that they are related to in some degree. Parents do not have to be married. The income of both parents are counted regardless of their marriage status. Representative Brown referred to the shelter clause. Mr. Lomas explained that families that have low housing expenses receive a reduction. Families that do not incur a minimum of $240 dollars a month in housing expenses would not receive this portion of their Aid to Families with Dependent Children (AFDC) payment. He further noted that currently AFDC families with two parents are paid $102 dollars per month more than families with one parent. The legislation would pay a family with the same amount of children the same regardless of the number of parents living in the home. In response to a question by Representative Brown, Mr. Nordlund observed that the legislation would establish a five year limit for benefits, on page 14. He noted that Section 7 only takes effect if federal welfare reform is enacted. JAY LIVEY, DEPUTY COMMISSIONER DEPARTMENT OF HEALTH AND SOCIAL SERVICES emphasized that the provisions contained in the comprehensive portion of the legislation have been contained in all the proposed versions of federal reform. He noted that the State will have to comply with federal law to obtain federal money. Representative Brown questioned the advantage of enacting state reforms before federal reforms are enacted. Mr. Livey replied that the Department gains planning time. He stressed that federal reform will completely change the Aid to Families with Dependent Children Program. 5 Mr. Nordlund noted that the trigger date is October 1, 1996. If federal reforms are not implemented by that date the State will implement waivers. Representative Brown asked if the provisions of the bill apply equally throughout Alaska. Mr. Nordlund responded that the waiver portion of the bill does not apply evenly. The waiver approach would implement pilot projects in the State. The pilot areas have not been selected. He stated that Anchorage would be one of the sites. The State is required to set up a pilot program consisting of 3,00 families. Anchorage is the only community that could meet this requirement. He noted that comprehensive provisions would apply throughout the whole state. In response to a question by Representative Brown, Mr. Nordlund observed that Native organizations will be allowed to contract with the federal government for provision of services. Representative Brown referred to the 10 percent hardship provision. Mr. Nordlund stated that the Department has concerns regarding the application of the 5 year limit in the state of Alaska. He observed that if federal reforms are enacted there will be a 20 percent exemption. He noted that the legislation allows for a 10 percent exemption or the maximum percent allowed under federal law. He clarified that the intent is to go to the greater amount. Mr. Tibbles noted that when the legislation was drafted the federal level was anticipated at 10 percent. He pointed out that the language would allow the State to respond to the level enacted in federal legislation. Mr. Lomas estimated that Native organizations would have greater latitude to reflect the economic conditions in their areas. Representative Kelly questioned the definition of "emotional" as contained in Subsection (c) on page 9. Mr. Nordlund noted that under existing law the State has the option to require teen parents to remain at home. He stressed that the provision ensures that if a teen parent is required to live in their parents home, that the Department can assure that it is a safe living environment for the teen. Mr. Livey noted that the teen would have to live with another adult or in a supervised setting if they did not remain at home. He stated that the teen might live with another adult relative or neighbor. Representative Brown referred to provisions for the 6 redetermination of benefits on page 50. Mr. Nordlund noted that this language was added in the Senate Finance Committee. He noted that if the total amount of state funds appropriated for AFDC or the Alaska Temporary Assistance Program was greater in FY 99 than appropriated in FY 97 a benefit reduction would be implemented equal to the percentage of the increase. This is a default. If the Legislature does not take action to change the benefit structure based on a needs study that will be completed by the Department the default will be implemented. He stressed that this applies to total state operating money and not capital funds. He acknowledged that the legislation does not allow for the reduction to be diffused in the case of high unemployment. He noted that the language is a compromise. If the caseload is reduced the provision will not be needed. Representative Brown noted that funding for job training and childcare was reduced from the Department's request. Mr. Nordlund noted that the comprehensive approach requires funding for job training and childcare. Out of the Department's $6 million dollar request, one million dollars have been appropriated. He observed that without the additional $5 million dollars it will be difficult to reduce the caseload. Representative Brown referred to the confidentiality provisions on page 45. She asked the why legislators need to have special access to confidential AFDC records that are not available to other members of the public. Mr. Tibbles maintained that legislators are not able to address concerns of constituents without access to the information. He emphasized that this provision allows the Legislature to assure that the program is working. Representative Therriault noted the difficulty of legislators would have tracking down this information regarding constituent concerns without the use of staff. Confidential information would not be available to staff. He acknowledged the need for double checks. Representative Brown suggested that the legislation could read: "In response to investigation of a particular fraud report, the Department may disclose information relating to the disposition." Representative Grussendorf questioned if an audit by the Legislative Budget and Audit Committee would consider more than the flow of funds. He didn't think the concerns could be addressed by the Ombudsman. He expressed concern with the wording of the provision. He asked if a standing committee could respond to the concerns. 7 Representative Therriault expressed concern that without access to the information legislators cannot respond to specific allegations made to them by constituents. Representative Grussendorf asked how the Department handles allegations of frauds by legislators or individuals. Mr. Lomas stated that all reports are given to the case worker handling the case. Mr. Nordlund acknowledged that there has been a back log of fraud investigations. He noted that 5 additional fraud unit positions were added by the Legislature in FY 96. He anticipated that an additional position would be added in FY 97. Mr. Livey discussed benefit restructuring. He noted that incentives for AFDC participants to work have been added. The auto allowance has been changed to allow for more reliable transportation. ANGELA SOLARNO, NATIONAL ASSOCIATION OF SOCIAL WORKERS stated that the legislation allows Alaska to respond to the mandate of federal welfare reform in a productive and beneficial way. She spoke in support of incentives to work contained in Section 1. She maintained that provisions in Section 7, the comprehensive package, represents the best thinking of Alaska policy makers, social service professionals, community members and the recipients. She spoke in support of Section 23, Delinquent Obligor's. She observed that this Section has the potential to generate $16 million dollars in additional AFDC receipts. Ms. Solarno discussed three areas of concern. She referred to page 14, line 20. She stressed that the National Association of Social Workers are opposed to a lifetime limit on public assistance benefits. She maintained that this section ignores the facts regarding the use of welfare in Alaska. She stressed that the majority of AFDC recipients use welfare in times of crisis and transition. The average time on the program is 2 years. She alleged that this provision will result in some families living in poverty. She cited studies that show that for every dollar cut from public assistance the State will eventually spend $1.50 to $1.90 dollars in health care cost and lost productivity. Ms. Solarno stated that they are opposed to the unlimited access by legislators to confidential records. She questioned the purpose of the provision. She acknowledged that fraud exists but emphasized that additional funds have been made available for fraud investigation. Ms. Solarno referred to Section 54, page 50, Redetermination 8 of Benefits. She summarized that a rateable reduction would be triggered by an increase in state funds appropriated to the program. If caseloads go up, for any reason including economic downturns, benefits will go down. She recommended that language be added to diffuse the trigger if unemployment rates rise. Ms. Solarno expressed support for job training and childcare funding. She maintained that job training and childcare is the engine that will move people off welfare. In response to a question by Representative Therriault, Ms. Solarno discussed the inclusion of the term "emotional" in regards to a teen parent's welfare. She acknowledged that it is a mental health issue. She stressed that emotional abuse occurs as a very damaging and dangerous condition for children. She spoke in support of retaining the language. SENATOR LYDIA GREEN, SPONSOR, spoke in support of the legislation. She noted that the 5 year issue is not in the waiver portion of the bill. She noted that the Senate has concerns regarding the ability of Legislators to access confidential records. She emphasized that legislators are held to a high standard. She noted that the provisions contain guidelines on the use and containment of confidential information which would be accessed by legislators. She emphasized that the purpose of the legislation is to lower and increase the efficiency of funding. She maintained that case load will be reduced. She observed that the legislation will be reviewed in four years. She emphasized that the State could face a 90 percent match for this entitlement in 5 to 6 years without amendment. She stated that she anticipates that there will be extra money in federal welfare reform block grants. She observed that provisions for an emergency account would put this money, with a legislative appropriation, back into the system. She stressed that the deferred benefit is the trade off for the rateable reduction. SB 89 was HELD in Committee for further consideration.