Legislature(2001 - 2002)
02/28/2002 01:54 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.