Legislature(1995 - 1996)
05/01/1996 02:00 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 1, 1996
2:00 P.M.
TAPE HFC 96-153, Side 1, #000 - end.
TAPE HFC 96-153, Side 2, #000 - end.
TAPE HFC 96-154, Side 1, #000 - #593.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 2:00 p.m.
PRESENT
Co-Chair Hanley Representative Martin
Co-Chair Foster Representative Mulder
Representative Brown Representative Navarre
Representative Grussendorf Representative Parnell
Representative Kelly Representative Therriault
Representative Kohring
ALSO PRESENT
Senator Steve Rieger; Senator Lydia Green; Kelly Huber,
Staff, Senator Halford; Louise Charles, Tanana Chiefs
Conference; Don Shircel, Director, Family Services, Tanana
Chiefs Conference; Mike Tibbles, Staff, Senator Green; Jim
Nordlund, Director, Division of Public Assistance;
Department of Health & Social Services; Jay Livey, Deputy
Commissioner, Department of Health & Social Services; Curtis
Lomas, Welfare Reform Program, Department of Health & Social
Services.
SUMMARY
SB 89 An Act relating to the members of the board and
staff of the Alaska Permanent Fund Corporation.
HCS CSSB 89 (FIN) a "do pass" recommendation and
with a fiscal impact note by the Department of
Revenue, 3/8/96.
SB 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
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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.
SB 98 was HELD in Committee for further
consideration.
SB 289 An Act relating to runaway minors and their
families or legal custodians.
SB 289 was rescheduled to another time.
SB 320 An Act increasing the number of superior court
judges designated for the Third Judicial District
to provide an additional superior court judge at
Dillingham.
SB 320 was reported out of Committee with a "do
pass" recommendation and with a fiscal impact note
by the Alaska Court System, 4/15/96; and with a
fiscal impact note by the Department of
Administration.
SCR 23 Relating to long range financial planning.
SCR 23 was rescheduled to another time.
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."
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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. 320
An Act increasing the number of superior court judges
designated for the Third Judicial District to provide
an additional superior court judge at Dillingham.
KELLY HUBER, STAFF, SENATOR HALFORD testified in support of
SB 320. She explained that SB 320 would provide an
additional Superior Court judge in the Third Judicial
District with the intent that the position be located in
Dillingham. She noted that the Department of Law and the
Alaska Court System support the legislation.
Representative Parnell spoke in support of the legislation.
Representative Mulder MOVED to report SB 320 out of
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Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
SB 320 was reported out of Committee with a "do pass"
recommendation and with a fiscal impact note by the Alaska
Court System, 4/15/96; and with a fiscal impact note by the
Department of Administration.
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
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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.
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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
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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.
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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
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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.
ADJOURNMENT
The meeting adjourned at 4:05 p.m.
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