Legislature(2001 - 2002)

02/28/2002 01:54 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 402                                                                                                            
                                                                                                                                
     An Act  relating to diversion payments,  wage subsidies,                                                                   
     cash   assistance,   and  self-   sufficiency   services                                                                   
     provided under the Alaska  temporary assistance program;                                                                   
     relating to  the food stamp  program; relating  to child                                                                   
     support  cases that  include  persons  who receive  cash                                                                   
     assistance  or   self-sufficiency  services   under  the                                                                   
     Alaska temporary  assistance program; and  providing for                                                                   
     an effective date.                                                                                                         
                                                                                                                                
REPRESENTATIVE  FRED DYSON  spoke in  support of  HB 402.  He                                                                   
explained that  the legislation  would take Alaska  Temporary                                                                   
Assistance to Needy Families (TANF)  funds and food stamps to                                                                   
subsidize employment.  Instead of  receiving a welfare  check                                                                   
clients would  get a job.  This would allow small  businesses                                                                   
to employ  persons that  they might  not otherwise  have been                                                                   
able to justify.  He noted that  in the state of Oregon  65 -                                                                   
85 percent  of their  clients retained  their jobs  after the                                                                   
subsidy  period.   He  noted  that  Sandy   Hoback,  American                                                                   
Institute  of Full  Employment  Oregon, helped  to draft  the                                                                   
legislation based on the experiences  of the state of Oregon.                                                                   
                                                                                                                                
This bill authorizes full family  sanctions, which allows the                                                                   
Department  to sanction  (withdraw benefits)  until a  job is                                                                   
found.  The  bill repeals  the  limit  of the  percentage  of                                                                   
people  on  welfare that  can  extend  the benefits  past  60                                                                   
months.  There   is  currently   a  20  percent   limit.  The                                                                   
department  supports  the  lifting  of the  20  percent  cap.                                                                   
There  are some  people that  will not  be able  to make  the                                                                   
transition  due   to  disabilities   or  other  problems.   A                                                                   
percentage  of hard-core  welfare  people will  need to  have                                                                   
continued   assistance.   He   acknowledged   concerns   that                                                                   
elimination of  the 20 percent  cap could be  taken advantage                                                                   
of and  that there  should be some  limits. He observed  that                                                                   
the legislature  could require a report regarding  the number                                                                   
of waivers or exceptions.                                                                                                       
                                                                                                                                
Representative  Dyson  provided   members  with  a  committee                                                                   
substitute  for consideration.  He acknowledged that  concern                                                                   
remains  regarding  the  20% limit.  The  proposed  committee                                                                   
substitute  raises the  limit  to 30  percent for  discussion                                                                   
purposes.                                                                                                                       
                                                                                                                                
Representative   Hudson   MOVED   to  ADOPT   the   committee                                                                   
substitute 22-LS1431\F, Lauterbach,  2/27/02.  There being NO                                                                   
OBJECTION, it was adopted.                                                                                                      
                                                                                                                                
JIM  NORDLUND,  DIRECTOR,  DIVISION   OF  PUBLIC  ASSISTANCE,                                                                   
DEPARTMENT  OF   HEALTH  AND  SOCIAL  SERVICES,   voiced  his                                                                   
appreciation  for creation  of the  bill. He  noted that  the                                                                   
department  supports  all five  provisions  of  the bill.  He                                                                   
noted  that the  department  has  some trepidation  with  the                                                                   
family sanction  provision. This provision would  require the                                                                   
department  to  fully  sanction  a family  off  benefits  for                                                                   
failure to  cooperate with the  program. He pointed  out that                                                                   
very few  families are not  cooperative with the  Department.                                                                   
He  noted that  the department  would  support the  provision                                                                   
with adequate  protection  to make sure  that the  department                                                                   
does not make  a mistake in cutting off a  family's benefits.                                                                   
He stressed the need to for a  determination to fully explain                                                                   
the sanction to the family.                                                                                                     
                                                                                                                                
Mr. Nordlund  discussed the 20%  provision. He noted  that of                                                                   
the temporary  caseload, 20% of  the current caseload  can be                                                                   
exempt from the  5 year limit. He observed  that the caseload                                                                   
has come down  by 40 - 50  percent across the nation.  The 20                                                                   
percent applies to  the current size of the  caseload not the                                                                   
caseload that  existed when  the law was  passed in  1996. As                                                                   
the caseload has  been reduced 20% becomes a  lower number of                                                                   
families. Those  that are most  able to get off  the caseload                                                                   
have moved  off, but  those with  the greatest disability  or                                                                   
inability to work stay on the caseload.                                                                                         
                                                                                                                                
TAPE HFC 02 - 34, Side A                                                                                                        
                                                                                                                                
Mr. Nordlund  maintained that  there will be families  forced                                                                   
off  the caseload  that  have  disabilities,  are caring  for                                                                   
disabled children, victims of  domestic violence or have some                                                                   
other form  of hardship that  prevents them from  working and                                                                   
supporting  their families. The  Department proposes  getting                                                                   
rid of the arbitrary number and  look at the circumstances of                                                                   
the family.  If the  family meets  a set  of strict  criteria                                                                   
than they would receive an extension.                                                                                           
                                                                                                                                
Mr. Nordlund observed  that the terminology would  be changed                                                                   
from  exemption to  extension. Situations  would be  reviewed                                                                   
and decided  based on  the circumstances  of the family.  The                                                                   
proposed  committee substitute  would  change the  cap to  30                                                                   
percent, which the department  would prefer over current law.                                                                   
The  department  would  prefer  not  to  have  any  arbitrary                                                                   
number, but rely on criteria established in regulation.                                                                         
                                                                                                                                
In  response  to  a question  by  Representative  Croft,  Mr.                                                                   
Nordlund explained  that the maximum under federal  law is 20                                                                   
percent. State  law provided  for 10  percent or the  federal                                                                   
percentage,  whichever is  greater. Federal  law is  greater.                                                                   
passed before  the federal law  passed. State law  was passed                                                                   
before federal law.                                                                                                             
                                                                                                                                
Mr. Nordlund  noted that  the original  caseload was  12,483.                                                                   
The department anticipates a caseload of 5,598 in FY03.                                                                         
                                                                                                                                
Representative  John Davies  suggested that  if the  caseload                                                                   
was reduced  to less than 50  percent, that the  limit should                                                                   
go from 20 - 40 percent.                                                                                                        
                                                                                                                                
In  response to  a  question  by Representative  Davies,  Mr.                                                                   
Nordlund noted  that the limitation  was repealed  in section                                                                   
54 of the original version of the bill.                                                                                         
                                                                                                                                
Representative  John  Davies  asked  if there  is  a  federal                                                                   
limit,   which   would   limit  the   state.   Mr.   Nordlund                                                                   
acknowledged that  the federal limit is still  20 percent. He                                                                   
explained that many  states do not have a time  limit. States                                                                   
that  want  to  provide  benefits to  families  over  the  20                                                                   
percent  limit use  their state  funds. Alaska  law does  not                                                                   
allow the  use of state funds.  He thought that a  30 percent                                                                   
limitation would  be better, but emphasized that  it is still                                                                   
an arbitrary number,  which creates a disincentive  to reduce                                                                   
the  caseload. He  pointed out  that  it is  a federal  block                                                                   
grant with a required minimum  effort of state general funds.                                                                   
The  program  has  a set  amount  of  funding  regardless  of                                                                   
caseload.                                                                                                                       
                                                                                                                                
Representative Lancaster questioned  if clients are returning                                                                   
to the  program. Mr.  Nordlund noted that  after 2  years, 30                                                                   
percent of their clients had returned  to the caseload. There                                                                   
is a 60-month lifetime limit.                                                                                                   
                                                                                                                                
Representative Dyson stressed  that he did not want people to                                                                   
get waivers  because there  are no jobs  where they  live. He                                                                   
maintained that people should  move to where the jobs are. He                                                                   
suggested  that  there  is  a  stable  group  of  chronically                                                                   
unemployed.  He  thought that  those  coming  into the  state                                                                   
would  be  more  employable.   He  did  not  think  that  the                                                                   
percentage of  new people  coming on to  rolls would  be less                                                                   
than 30  - 40  percent. He  pointed out  that as the  numbers                                                                   
shrink, the  percentage of chronically unemployed  increases.                                                                   
The department  will  be against  the 20 percent  limit  in a                                                                   
couple of years  if it is not removed. He maintained  that an                                                                   
increase in  the limit would  provide additional time  to see                                                                   
what  is  happening  and make  adjustments  based  on  better                                                                   
factors.  He   emphasized  the   importance  of   moving  the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Representative  Hudson  asked if  there  is  anything in  the                                                                   
existing  law that  establishes the  standards. Mr.  Nordlund                                                                   
explained  that there  are criteria  for  exemptions in  law.                                                                   
Exemptions include  persons with  disabilities, caring  for a                                                                   
disabled child, victims of domestic  violence, and people who                                                                   
face hardship.  The hardship category needs  more definition.                                                                   
The  department is  in the  process of  defining hardship  in                                                                   
regulation.                                                                                                                     
                                                                                                                                
Representative  Harris  asked  for  a  clarification  on  the                                                                   
limitation. Representative Dyson  stated that he did not have                                                                   
a strong feeling  on inclusion of a limitation.  He expressed                                                                   
confidence  with the department.  He would  support the  bill                                                                   
with or without the limit.                                                                                                      
                                                                                                                                
SANDY HOBACK,  INDEPENDENT CONSULTANT, AMERICAN  INSTITUTE OF                                                                   
FULL  EMPLOYMENT  OREGON testified  via  teleconference.  She                                                                   
noted  that  she   helped  to  draft  the   legislation.  The                                                                   
legislation     incorporates     the     five     legislative                                                                   
recommendations that were made  to improve the program. Their                                                                   
report recommended  the use of  narrowly crafted  criteria as                                                                   
opposed  to an  arbitrary cap.  She emphasized  the need  for                                                                   
legislative  reporting  regarding  extensions  and  cautioned                                                                   
that a  cap not  be a disincentive  for caseload  reductions.                                                                   
She agreed  that the  there would  not be  the same  level of                                                                   
need for new  clients in regards to the five-year  limit. She                                                                   
thought  that   a  30  percent   cap  would  be   reasonable,                                                                   
especially for the next couple of years.                                                                                        
                                                                                                                                
Ms. Hoback  explained that Oregon  reduced their  caseload by                                                                   
65 percent. She  estimated that when the caseload  is reduced                                                                   
to about  35 percent that a  third of the remaining  caseload                                                                   
would remain for a significant amount of time.                                                                                  
                                                                                                                                
Representative John Davies questioned  why the new population                                                                   
would not have the same percentage  of the population staying                                                                   
on the caseload.                                                                                                                
                                                                                                                                
Ms. Hoback  noted that  a portion  of the chronic  unemployed                                                                   
have  been on  welfare for  a long  period of  time and  were                                                                   
unable to  be re-meditated. New  clients have a  higher level                                                                   
of  employability.  She  pointed  out  that  the  chronically                                                                   
unemployed have  been attached  to assistance for  years. She                                                                   
did not  think that  the same  level of  difficulty would  be                                                                   
brought into  the system. She  acknowledged that  there would                                                                   
be some multi  generation welfare recipients.  She emphasized                                                                   
that if the Department  is doing a good job  that there would                                                                   
be fewer children  coming into the system as  adults. She did                                                                   
not think that  there would be the same flow rate  as the old                                                                   
system, which did no more than provide a welfare check.                                                                         
                                                                                                                                
Representative Whitaker  asked why the legislation  needed to                                                                   
pass in the current year. Representative  Dyson stressed that                                                                   
there is a paradigm  shift toward providing a  job instead of                                                                   
a check.  He stated that  the sooner that the  Administration                                                                   
is empowered; the  sooner benefits would be  reaped. He noted                                                                   
that the  20 percent  limit would  present  a problem in  the                                                                   
future and emphasized the need to get the program going.                                                                        
                                                                                                                                
Vice-Chair  Bunde spoke  in  support of  a  30 percent  limit                                                                   
accompanied by reports.                                                                                                         
                                                                                                                                
Mr.  Nordlund  responded that  first  timer's  will meet  the                                                                   
limit in  July. There  will be  families without benefits  in                                                                   
July because they do not meet  the criteria for an extension.                                                                   
                                                                                                                                
Representative  Dyson  observed that  the  measures had  been                                                                   
adjusted.                                                                                                                       
                                                                                                                                
Representative  John  Davies  MOVED  to  ADOPT  Amendment  1:                                                                   
delete  "30"   and  insert  "33"  percent.  There   being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Representative Davies  MOVED to report CSHB 402  (FIN) out of                                                                   
Committee with the accompanying fiscal note.                                                                                    
                                                                                                                                
CSHB  402 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass"  recommendation and  with  previously published  fiscal                                                                   
note: HSS #1.                                                                                                                   

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