Legislature(1999 - 2000)
02/29/2000 03:46 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 98 - PUB.ASSISTANCE:PROGRAMS/GRANTS/CONTRACTS Number 0019 CHAIRMAN DYSON announced the next order of business as House Bill No. 98, "An Act relating to contracts for the provision of state public assistance to certain recipients in the state; providing for regional public assistance plans and programs in the state; relating to grants for Alaska tribal family assistance programs; and providing for an effective date." CHAIRMAN DYSON announced the committee would hear public testimony on HB 98. Number 0159 SCOTT CALDER testified via teleconference from Fairbanks. He said this bill is a good idea because it increases the local and regional control and administration of a program. He still isn't clear on some questions from the last hearing on dual assistance in rural/urban setting. He expressed support for HB 98. Number 0254 DIANE WENDLANDT, Assistant Attorney General, Collections and Support, Civil Division (Anchorage), Department of Law, testified via teleconference from Anchorage. She represents the Child Support Enforcement Division (CSED) and understands CSED supports this bill. She was available for any questions on any legal issues relating to child support. Number 0300 BARBARA MIKLOS, Director, Central Office, Child Support Enforcement Division, Department of Revenue, testified via teleconference from Anchorage. She supports this bill and is available for questions. Number 0383 JIM NORDLUND, Director, Central Office, Division of Public Assistance, Department of Health & Social Services (DHSS), came forward to testify. He mentioned that there is a proposed committee substitute (CS) that adopts the long child support amendment into the bill. CHAIRMAN DYSON asked if there was any objection to withdrawing the amendments from the last hearing and adopting the proposed CS for HB 98, version 1-GH1011\G, Lauterbach, 2/18/00, as a work draft. REPRESENTATIVE BRICE objected for purposes of discussion. He asked for a rundown of the differences between version G and the last version. Number 0383 MR. NORDLUND responded that basically version G incorporates the lengthy child support amendment into the bill. CHAIRMAN DYSON asked Ms. Miklos to explain what the amendments do for HB 98. MS. MIKLOS explained the CSED collects child support on behalf of public assistance cases. Under the regional Native assistance program, the regional corporations will be providing public assistance services. The amendments explain what CSED will do with the child support. Prior to the amendments, that was not addressed in the legislation. The CSED has been working with the Division of Public Assistance to get language that would make it clear. MS. MIKLOS explained that the CSED will collect the child support on behalf of the Native corporations; while someone is on the regional Native assistance program, the CSED will give that child support money to the regional corporation. These changes are addressed beginning on page 2, Section 2, lines 27-28, and elsewhere through the proposed CS, where the words, "or an Alaska Native family assistance program" were added. Adding that phrase gives the CSED the ability to give the money to the Native family assistance program. She pointed out each section where that phrase occurs. She also noted come clarifying language on page 5, Section 13. MR. NORDLUND noted additional language was changed in the proposed CS not related to child support on page 13, line 21. He asked Kristen Bomengen to speak to that change. Number 0920 KRISTEN BOMENGEN, Assistant Attorney General, Human Services Section, Civil Division (Juneau), Department of Law, came forward. She said the language on page 13, line 21 of the proposed CS, clarifies that the purpose of Sec. 47.27.072 is strictly to apply to AS 47.27.005(b). The previous language that introduced it may have been too broad, perhaps extending it to other parts of the chapter that were not intended. MR. NORDLUND pointed out the title was changed to reflect the additions to the bill dealing with child support. Number 1020 REPRESENTATIVE KEMPLEN wondered which choice was made for use of the phrase "fair and equitable," which was raised in a memorandum from Terri Lauterbach [the bill drafter]. MR. NORDLUND answered that the choice was to leave the bill as it came to the committee. The issue is that the entire assignment of the child support will go to the Native corporation. When the division makes grants to the Native corporations, it will reduce the grant amount by what has been approximated as the state's share of its collection. He still feels that the language "fair and equitable" gives enough flexibility to address that. He emphasized that they have every intention of recovering the state's share of the child support collections by an appropriate reduction in the grant amount. CHAIRMAN DYSON asked Mr. Nordlund what he meant by the "state's share." Number 1127 MR. NORDLUND explained that the way child support collections interplayed with public assistance payments in the past was that half was paid by the federal government and half was paid by the state. The person signing up for public assistance agreed to assign any child support collections made on his/her behalf to pay back the state and federal government for "advancing them a public assistance payment." That payback is calculated based on the share of the funding between the state and federal government. The amount of money has changed over time, but essentially 50 percent of the money would go to the state, and 50 percent would go to the federal government. In this case, however, the federal government is not asking for its share of the child support collections; the Native organizations are allowed to retain the federal share. The state will recover its share through a reduction in the grant amount. CHAIRMAN DYSON asked why the money should go to the Native corporation and not the state. MR. NORDLUND said he believes it was the intent of the federal government to allow those child support collections to be retained by the Native organization, and the state will accede to that desire. CHAIRMAN DYSON asked if the Native organization is going to make money. Number 1280 JODI OLMSTEAD testified via teleconference from North Pole and said she had the answer to that question. She was looking at the "Federal Incentives Earned on Collections from Child Support Enforcement" and using the 1993 figure; the AFDC [Aid to Families with Dependent Children] amount collected was $15 million. The incentive earned was $1.18 million. The "non-AFDC," at 115 percent, times the AFDC incentive earned was $1.171 million, which was a $2.190 million bonus or incentive for the collections done - for some but not all. Number 1335 MR. NORDLUND said the answer to Chairman Dyson's question was there is a change in the approach that the federal government is taking towards the administration of a Native-run TANF [Temporary Assistance to Needy Families] in that the federal government does not consider a participant in a Native-run program as a participant in the TANF program. Therefore, all the attachments regarding child support don't attach to the participants in that program; therefore, the federal government doesn't really care what happens to the child support collections. He further explained that traditionally those funds have gone to the federal government. One of the benefits of encouraging the Native organizations to run this program would be for them to keep this relatively small amount of money (compared to the overall cost of the program) that is collected. CHAIRMAN DYSON asked if he can infer that the state is not going to get reimbursed from obligor parents for much of the state or federal money given to the Native families. MR. NORDLUND indicated that the state will be reimbursed by the Native organization by reducing a fair and equitable grant amount. Number 1420 CHAIRMAN DYSON asked if the state would only be reimbursed for half of the CSED collection. MR. NORDLUND said that is correct, which is essentially the amount of money returned to the state presently by those clients, which is not a great deal of money. CHAIRMAN DYSON referred to previous discussion and asked about the language in the new bill [Version G] that still has the amount vary by region. Number 1474 MR. NORDLUND agreed that Chairman Dyson did point out two inconsistencies in the bill, and an amendment would be appropriate. In Version G, the differences are found between page 2, line 3, and page 7, line 12. He suggested an amendment: Page 2, line 4, strike "social and economic" and insert "varying," so it would read "accurately reflect the varying conditions of that region;" MR. NORDLUND explained that it would make the language consistent between the two pages. One additional provision of this bill is it allows the state to run slightly varying programs in different regions. That is a good idea because it gives the state the flexibility to do demonstration programs. MR. NORDLUND explained another reason is if a Native program was operating and then ceased to exist, the state might want to retain certain parts of the Native-run program that are different from the state program. He added that there are constraints in statute as to how much variation there could be within the region. It would allow the state to vary within the statute, but through regulations to have a slightly different program from one region to another. The programs couldn't be wildly different, however. CHAIRMAN DYSON indicated that is so the state couldn't discriminate and treat one region far better than another. MR. NORDLUND agreed that the state couldn't provide different benefit levels because those levels are stated in statute. Number 1673 REPRESENTATIVE BRICE withdrew his objection to adopting Version G as the work draft; therefore, the proposed CS for HB 98, version 1-GH1011\G, Lauterbach, 2/18/00, was before the committee. Number 1678 CHAIRMAN DYSON asked the committee if there was any objection to striking the words "social and economic" and inserting "varying" on page 2, line 4. There was no objection; therefore, Amendment 1 was adopted. MR. NORDLUND suggested that the word "economic" on page 7, line 12, should be deleted. That would make it consistent with the first amendment. It does allow for a bit broader interpretation of regional conditions not particular to economic circumstances, like cultural or social circumstances. CHAIRMAN DYSON asked: If the word "economic" was struck, would there still be small allowances made for the cost of living from one region or another? MR. NORDLUND answered no, that was never part of the program. Right now the benefit levels and the qualifying criteria are the same across the state. Number 1762 CHAIRMAN DYSON asked the committee if there was any objection to striking the word "economic" on page 7, line 12. There was no objection; therefore, Amendment 2 was adopted. CHAIRMAN DYSON asked if CSED is going to contract its services to the Native corporation to do the collections and those receipts will all go to the Native nonprofit organization. MR. NORDLUND agreed that is true. CHAIRMAN DYSON asked how CSED gets reimbursed for the cost of its efforts. Number 1818 MS. MIKLOS answered it would be the same if the CSED were collecting on behalf of a private family. The CSED wouldn't be reimbursed by the corporation. Sixty-six percent of CSED's funding is federal funding, so it would continue to get that level of reimbursement. CHAIRMAN DYSON asked Mr. Nordlund why it should say "fair and equitable". MR. NORDLUND explained that in determining the grant amount, a number of things that come into consideration. First of all, there are constantly changing caseloads. In some regions of the state the caseload might go up or down faster than in other regions. That needs to be considered every year as the grant amount is determined. In some regions there are more two-parent families than in other parts of the state. Under state law, two- parent families receive a benefit reduction of 50 percent in the summer months. The region with more two-parent families will receive less money. If that situation changed and more two- parent families were able to go to work, the funding would be greater. It is those kinds of situations that fluctuate size and makeup of caseload that really have a dramatic effect on the amount of funding necessary to run the program. It would be hard to design a formula that would take all that into consideration. MR. NORDLUND said the state might anticipate what the child support collections will be and deduct them up-front and then reconcile it at the end, or it might do a partial reduction up- front and reconcile at the end of the year. It is in the state's interest to make the reduction because the amount of money for this program is a limited and static sum. Whatever funding the state provides to the Native organization comes at the detriment, in a sense, to the non-Native population in the state, so the state has to make sure it is balanced and fair. The department is not asking for additional funds for the Native-run program; the money is coming out of what has already been appropriated. Number 2029 REPRESENTATIVE BRICE said basically the reduction in grants to the Native corporations is not some type of disincentive to work with the child support collection; it is a refinancing of state general fund dollars with money coming in from child support. REPRESENTATIVE GREEN asked: When the program is being administered by the Native corporation, will it be the same as the state is doing? For example, if there were two families in a village, one Native and one non-Native, would the programs be the same? MR. NORDLUND answered this bill would allow the state to contract services with the Native corporation to provide services to that non-Native, who would have to come under the program rules of the Native corporation. In larger villages or cities, there will be non-Natives receiving services from the state and Natives receiving services from the Native organization. The programs are required under federal law to be comparable, but they can be slightly different. REPRESENTATIVE COGHILL asked: In a place where both the state and the Native corporation are offering services, can an individual choose which program to use? Can only Natives use the Native-run program? Or can a Native use the state program? MR. NORDLUND said the individual is not eligible for both programs. Under the federal law that sets up for the administration of the Native-run programs, the Native organization defines its service area and population. Once that service population is defined, then the federal money that used to come to the state to serve that individual now goes to the Native organization. The Native organization might decide to redefine its service population, and that would affect the amount of federal funding. The federal government wants to make sure the federal funding follows the client, whether the client is served by the state or the Native organization. Once that decision is made and the federal funding is flowing to the Native being served by the Native organization, then that person would not have the choice of being served by the state. REPRESENTATIVE COGHILL asked: If a Native didn't want to get into that, could he/she sign up with the state? MR. NORDLUND answered no. For the purposes of the temporary assistance program, he/she would need to be served by the Native organization. CHAIRMAN DYSON asked Mr. Nordlund if the Native corporations would be audited. MR. NORDLUND answered yes, the Department of Health & Social Services will be auditing the Native organizations for fiduciary kinds of responsibilities, but the federal government will continue to audit the programs for welfare reform requirements. CHAIRMAN DYSON asked: If a recipient of one of the programs feels he/she is not being treated fairly, what is the appeal process? TAPE 00-24, SIDE B Number 2353 MR. NORDLUND responded that the first level of appeal would be with the Native-run program. If a satisfactory conclusion is not reached there, an appeal can be made to the department, and beyond that, the court. CHAIRMAN DYSON asked if the legislators could act as ombudsmen on behalf of a constituent. MR. NORDLUND said he believes someone could appeal to the local representative informally, and the representative could talk to the department. He pointed out that the legislature still has the "power of the purse" over this program. There is a separate component for the program in the department's budget called "Native Family Assistance Programs" where there is money to run the program. Certainly the threat of changing that appropriation through the normal process that the legislature uses is a hammer that the legislature could have over the department, and that the department, therefore, would have over the Native organization. MS. BOMENGEN added that the individual being served by the Native program is really in the same position as anyone who is being served through a grantee of the state. In the circumstance of a grantee of the DHSS, the DHSS would be contacted, and then the department would have to deal with the grantee directly on the issue. It would not necessarily be a matter of contacting the grantee. Number 2168 MS. OLMSTEAD asked if this bill will increase the CSED's workload. MS. MIKLOS answered that it will not affect the workload of the CSED one way or another. She stated that there is no priority of collecting one type of case over another. CHAIRMAN DYSON announced that if there was no objection, the committee would withdraw Version G and adopt Version H of HB 98 as the working document. There being no objection, the proposed CS for HB 98, version 1-GH1011\H, Lauterbach, 2/24/00, was adopted as a work draft. [Note: Version H incorporates the amendments adopted in Version G.] The committee took an at-ease from 4:45 p.m.-4:46 p.m. REPRESENTATIVE BRICE made a motion to move CSHB 98, version 1- GH1011\H, Lauterbach, 2/24/00, out of committee with individual recommendations and attached fiscal note. REPRESENTATIVE COGHILL objected. A roll call vote was taken. Representatives Whitaker, Green, Morgan, Brice and Dyson voted in favor of moving the bill. Representative Coghill voted against it. Representative Kemplen was absent. Therefore, CSHB 98(HES) moved from the House Health, Education and Social Services Standing Committee by a vote of 5- 1.
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