Legislature(2001 - 2002)
02/28/2002 01:54 PM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 28, 2002
1:54 PM
TAPE HFC 02 - 33, Side A
TAPE HFC 02 - 33, Side B
TAPE HFC 02 - 34, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 1:54 PM.
MEMBERS PRESENT
Representative Eldon Mulder, Co-Chair
Representative Bill Williams, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Richard Foster
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
Representative Carl Moses
Representative Jim Whitaker
MEMBERS ABSENT
No absences
ALSO PRESENT
Representative Norm Rokeberg; Representative Drew Scalzi
Anne Carpeneti, Assistant Attorney General, Legal Services
Section, Criminal Division, Department of Law; Jerry McCune,
United Fishermen of Alaska, Juneau; Mary McDowell,
Commissioner, Commercial Fisheries Entry Commission; Jim
Nordlund, Director, Division of Public Assistance,
Department of Health and Social Services.
PRESENT VIA TELECONFERENCE
Sandy Hoback, American Institute of Full Employment Oregon.
SUMMARY
HB 288 "An Act relating to commercial fisheries limited
entry permit buy-back programs."
HB 288 was heard and HELD in Committee for further
consideration.
HB 330 "An Act relating to providing alcoholic beverages
to a person under 21 years of age."
CSHB 330 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with previously
published fiscal notes: LAW (1), ADM (2) and DOR
(3).
HB 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."
CSHB 402 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with previously
published fiscal note: HSS #1.
HOUSE BILL NO. 330
"An Act relating to providing alcoholic beverages to a
person under 21 years of age."
REPRESENTATIVE NORMAN ROKEBERG, SPONSOR, testified in
support of HB 330. He observed that a major tragedy occurred
in Anchorage last summer. An Anchorage police officer,
Justin Wollan, was killed in an automobile accident. The
officer was killed when he was hit by a teenager [under the
influence of alcohol], who perished along with other young
people in the automobile. The two individuals that were
convicted of furnishing alcohol to a minor could only be
charged with misdemeanors. The legislation would raise the
penalty for a person who furnishes alcohol to a minor from a
misdemeanor to a class C felony, if the action of the minor
results in serious injury or death. A class C felony is
punishable by a sentence of up to five years and up to a $50
thousand dollar fine. A misdemeanor is limited to up to one
year in prison and up to a $5 thousand dollar fine. He noted
that in the Anchorage incident one of the individuals was
convicted of two counts of misdemeanor furnishing alcohol to
a minor and sentenced to a maximum penalty of two
consecutive years [in prison] and a fine of $10 thousand
dollars. The legislation would allow the judge to pursue a
felony if the situation is egregious; where there was a
serious injury or death as a result of the cause of drinking
alcohol.
Representative Croft spoke in support of the legislation's
intent. He questioned if "negligently causes serious
physical injury" would include "intentionally" causing
serious physical injury. Representative Rokeberg noted that
the standard is simple negligence. Representative Croft
asked if the legislation would cover a case where a minor
who was provided alcohol assaulted somebody or, as in
Officer Wollam's case, they intentionally drove across the
meridian. Representative Rokeberg deferred the question to
legal counsel.
Representative Croft expected the legislation to tie the
harmful act to the intoxication. He asked the legal standard
for "under the influence". He questioned if it would be the
.08 blood alcohol content (BAC) level or the alcohol having
any affect on the conduct. Representative Rokeberg thought
that the standard was changed from .10 BAC to .08 BAC. He
pointed out that impairment is .04 BAC.
Representative Croft concluded that impairment would be
included. Representative Rokeberg agreed, in that it affects
the actions of the youthful miscreant. He stated that it was
his interpretation that "impairment" would be included under
the legislation.
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES
SECTION, CRIMINAL DIVISION, DEPARTMENT OF LAW provided
information regarding the legislation. She clarified that
the Department interprets the law to be "under the
influence" of an alcoholic beverage. She pointed out that
the state prosecuted DWI cases for "under the influence"
prior to blood alcohol standards and breathalyzers. She
observed that it is a question of fact; whether or not the
state can prove beyond reasonable doubt that the person was
under the influence of alcoholic beverages. "Under the
influence" is not defined statutorily. There are definitions
of drunken person in Title 4. "Under the influence" is a
term that courts apply depending on the individual defendant
and the surrounding circumstances of their behavior.
Representative Croft reiterated that he expected to see a
nexus between providing the alcohol, specifically being
under the influence, and the negligence. He noted that [the
legislation pertains] to persons who cause physical injury
and are under the influence, without any link that indicates
that the drunken state was a contributing factor to or was a
substantial factor in the injury. Being negligent and being
under the influence are independent in the bill.
Ms. Carpeneti thought that the conditions were connected.
She thought "while under the influence of the alcoholic
beverage received in violation of the section" speaks to the
intent of the legislation. She noted that the intent was to
cover situations where individuals furnish alcoholic to
minors and [the minor] goes out and hurts people because of
their alcoholic intoxication. She emphasized the difficulty
of defining "under the influence" because it depends on the
person. Young people tend to be influenced at a lower level
of alcohol than more experienced drinkers.
Representative Croft observed that in cases where a license
holder in alcohol provides alcohol to a minor or someone who
is intoxicated, and they can be held civilly liable do not
require that it be shown that the particular alcohol that
was sold contributed to the accident, but they do require a
link to the actual drunkenness to the incident. He stressed
that there is precedent for linking the intoxicated state to
the negligent act.
Representative Rokeberg noted that the previous versions of
the bill connected both negligence and under the influence;
both negligence and under the influence would have to be
present. The current statute for .08 BAC is driving while
intoxicated.
Ms. Carpeneti explained that criminal law sets a certain
culpable mental state for the state to prove in order for a
person to be found guilty of an offense, Title 11 provides
that any culpable state more serious than that stated,
qualifies for that culpable mental state. She explained that
if the standard is criminal negligence and a person is
proved to have acted recklessly then they could be convicted
for criminally negligent homicide under the circumstances.
Representative Rokeberg added that the standard is civil
negligence.
Representative Lancaster questioned if drugs could be
included. Representative Rokeberg pointed out that Title 4
deals with alcohol. The inclusion of "controlled substances"
would need to be included under another title.
Representative Lancaster questioned if there is a way to
present the message without the legal penalty.
Representative Rokeberg noted that other laws have required
the posting of signs. He did not think that [posting signs]
would be warranted if the state does its job and gets the
word out. He expressed the hope that people would become
aware that the Legislature has reacted to the Anchorage
tragedy. He maintained that young people and children often
know the laws, such as minor possession, before adults.
Representative John Davies asked for further interpretation
regarding the language contained in the legislation.
Ms. Carpeneti explained that Title 11 speaks to the person
that furnishes alcohol to a minor, which results in harm to
other persons.
Representative Croft read A.S. 11.81.900:
(1) a person acts with "criminal negligence" with
respect to a result or to a circumstance described by a
provision of law defining an offense when the person
fails to perceive a substantial and unjustifiable risk
that the result will occur or that the circumstance
exists; the risk must be of such a nature and degree
that the failure to perceive it constitutes a gross
deviation from the standard of care that a reasonable
person would observe in the situation.
Representative John Davies questioned if a person would be
criminally negligent if they had alcohol in their cupboard
and knew that [the minor(s) who consumed the alcohol and
subsequently committed an offense which causes harm to
another person] knew that it was there. He also questioned
if a person provides alcohol [to a minor] and the minors
promise not to go anywhere but subsequently go out and
drive, if the person would be criminally negligent.
Representative Rokeberg observed that there were substantial
discussions in the House Judicial Committee on the "hosting
event" issue. He explained that criminal negligence is on
the part of the person that furnishes. The person that does
the act would also have to be negligent and cause physical
harm. Supervision around the dispensing of alcohol, such as
from a parent to a child, is recognized as legal under the
statutes. There are circumstances that are allowed under
Title 4 for hosting. He did not think that the situation in
a home where there was no supervision would be qualified as
a criminally negligent activity.
Ms. Carpeneti stressed that, as in all criminal cases, it
depends on the facts. If the alcohol is in a cupboard and
the person doesn't invite their children or their friends to
use it they would not be criminally negligent. If the adult
invites the underage children to consume the substance then
they would be negligent because they would know that there
was a risk that the minors would drink [the alcohol]; they
would be inviting them to violate the law.
Representative John Davies concluded that the alcohol has to
be provided with criminal negligence and secondly, the
person has to negligently cause physical injury. Ms.
Carpeneti stated that the legislation is more of a penalty
provision because the law already prohibits providing
alcohol to minors.
Representative Rokeberg interjected that the legislation is
just stepping up the penalty provision. Ms. Carpeneti
pointed out that the second time a person furnishes alcohol
to a minor they can be charged and convicted of a class C
felony.
Representative Croft questioned if someone who creates an
intentional act would be covered. Ms. Carpeneti stated that
the intent was that an intentional act be covered as long as
the child is acting under the influence of alcohol at the
time.
Representative Croft expressed concern that an adult that
allows their 19 or 20 year old child to have a beer would be
the guarantor of their subsequent conduct.
Representative Rokeberg pointed out that it is currently a
misdemeanor [to furnish alcohol to a minor] even if the
child does not injure someone. Representative Croft
concluded that it would be a class C felony if a person
negligently furnishes a minor with alcohol, who causes
injury, even if it is not related to being under the
influence.
Ms. Carpeneti noted that it would be class C felony if it
were the second occasion and no one was hurt. The clear
intent is that the injury is related to "under the
influence".
In response to a question by Representative Foster,
Representative Rokeberg reviewed the sentencing of the
individuals convicted of furnishing alcohol to the minors
involved in the Wollam case.
Representative Harris referred to the fiscal note by the
Alaska Public Defenders Agency. The Alaska Public Defenders
Agency expressed concerns regarding determinations and what
constitutes an "injury". Representative Rokeberg noted that
the definition is in Title 11. He explained that "serious
physical" was added [to injury].
Vice-Chair Bunde drew the parallel of a loaded firearm and
questioned if it would be negligent to have a loaded firearm
in a home where it is misused and someone is injured. Ms.
Carpeneti did not know the civil negligence ramifications
under the law. On a personal level, she felt that it would
be egregious to leave loaded guns where children could get
them and felt that it could rise to civil negligence. It
would depend on the facts. Vice-Chair Bunde asked if alcohol
in the home would potentially have the same problems as the
loaded firearm. Ms. Carpeneti responded that alcohol has the
potential of being very harmful, "as we have seen, over and
over."
Representative Rokeberg noted that there is another piece of
legislation on the issue, which provides a cause of action
in civil damages that would come before the committee. The
could not be combined due to the single subject rule.
Vice-Chair Bunde stated that he did not think it was
negligent to have a bottle of wine in an unlocked cabinet.
Ms. Carpeneti agreed and explained that the legislation
addresses "furnishing" which is much more serious.
Representative Whitaker agreed with the intent but
questioned the threshold necessary to achieve the intent. He
summarized that there must be a provision of alcohol by an
adult, which is currently a misdemeanor. Then there must be
a criminally intent occurrence, which also has a provision
of negligence associated with the minor. He questioned if
both were necessary to make the penalty more severe. Ms.
Carpeneti explained that the legislation addresses the
penalty section. The legislation provides a standard for the
negligent furnishing of alcohol to a minor to be classified
as a class C felony on the second occurrence within a five-
year period. The legislation also provides a class C felony
if the alcohol was given to a minor with criminal negligence
and the minor commits an act with civil negligence (after
they received and consumed the alcohol), which results in
serious physical injury or death to another person.
Representative Whitaker concluded that criminal negligence
must be attached to the provision of alcohol to the minor.
Ms. Carpeneti explained that for the offense to move to the
next penalty that there would have to be a past occurrence
of furnishing to a minor; or the minor would have to commit
an act, which causes serious physical injury [or death],
with some degree of negligence.
Representative Whitaker questioned if the act of illegally
receiving and consuming the alcohol could be deemed to be
negligent on the part of the minor, automatically rising to
the second standard. Ms. Carpeneti did not think that the
mere act of drinking the alcohol would raise the standard.
The minor would have to drink the alcohol and then act in
some way that was not free from guilt. Alcohol consumption
alone would not be considered civil negligence on the part
of the receiver. The child is breaking the law by consuming,
but it is a violation, not a crime. The law does not make
the association.
Representative Hudson questioned if the current law defines
"provider". He questioned if a parent who had a bottle of
scotch in the cupboard, which was consumed by minors, would
be guilty of a felony. Representative Rokeberg pointed out
that a person may not furnish or deliver an alcoholic
beverage to a person under the age of 21. It must be a
willful act on the part of the deliverer. Merely having a
bottle of wine in the cupboard would not be negligent.
Vice-Chair Bunde acknowledged the egregious behavior of
providing alcohol to 13 - 14 year olds. He observed that
there are indeterminate fiscal notes from the Department of
Corrections and the Alaska Public Defenders Agency. He
questioned the fiscal impact. Representative Rokeberg
emphasized the difficulty of making projections about
discrete criminal activity and did not think that the
statute would be frequently enforced. He noted that the law
would be put on the books as a deterrent. He could not
determine the specific cost. There would already be a charge
under current law. The statute change would result in
additional hard time.
Vice-Chair Bunde questioned how many people had been charged
with furbishing alcohol to a minor in the last 5 years,
whether or not a serious accident was involved.
Representative Rokeberg observed that the fiscal note was
based on the original draft, which spoke to "injury". The
current version speaks to "serious [physical] injury". Vice-
Chair Bunde reiterated that they should be able to tell how
many cases occurred in the past five years.
Co-Chair Mulder summarized that there is a certain amount of
anxiety about the family member who is caught in a bad
situation, which was not intentional, but could somehow be
construed as negligent. He emphasized that it is difficult
to establish the negligence standard in court. Ms. Carpeneti
explained that the culpable state of criminal negligence
must be proved beyond a reasonable doubt. Co-Chair Mulder
felt that the provision would only occur in extreme cases.
Ms. Carpeneti agreed. She thought that the Department of Law
would have looked at statistics for second offenses. She
reiterated that it would be utilized for extreme cases, "not
for your everyday furnishing, which is not the most common
offense anyway." Co-Chair Mulder stated that he would
support the legislation with the assurance that it would be
used for extreme cases.
Representative John Davies questioned if the simple
provision of alcohol to a minor is by definition criminal
negligence. Ms. Carpeneti noted that criminal negligence,
which is a higher standard, would have to be proved in order
to convict someone of a class C felony.
Representative Davies asked if: "I were in my house, [and] I
provided alcohol to a friend of my son's or daughter's, is
that provision of alcohol to a minor criminally negligent?"
Ms. Carpeneti responded that it would be criminally
negligent, if he knew that they were minors. Representative
Davies concluded that the simple provision of alcohol to a
minor is by definition criminal negligence.
Representative Rokeberg observed that under AS 04.106.051,
the mere act of the misdemeanor would not be negligent.
Representative Davies disagreed with Representative
Rokeberg's interpretation of the statute. He concluded that
he would be criminally negligent if he provided a beer to
the underage friend of his son's. Ms. Carpeneti affirmed
that it would be criminally negligent if he knowingly
provided the alcohol to minors.
Representative Davies MOVED to ADOPT Amendment 1: Page 1,
line 12 delete, "while" and insert "as a result of being".
Representative Rokeberg stated that he would not object to
the amendment if there were no objections from the
Department of Law.
Representative Davies clarified that the intent of the
amendment is to make it clear that there is a causal
element. He stated that there could be circumstances where
the fact of the alcohol could be a non-issue in the cause of
the injury.
TAPE HFC 02 - 33, Side B
Ms. Carpeneti expressed concern that if the minor received
alcohol from multiple sources it would be impossible to
prove that it was the result of one particular place.
Representative Davies stressed that the furnisher might not
be criminally negligent if there were multiple sources that
they were not aware of. She acknowledged the intent to
specify causation, but argued that the intent could be
established without having to proving that a particular
alcohol was the one that caused the injury to a person.
Representative John Davies WITHDREW his amendment.
Representative John Davies MOVED to ADOPT Amendment 2:
insert "acting" after "while" on line 12, page 1. There
being NO OBJECTION, it was so ordered.
Co-Chair Mulder observed that the fiscal notes were zero and
MOVED to report CSHB 330 (FIN) out of Committee with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 330 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with previously published fiscal
notes: LAW (1), ADM (2) and DOR (3).
HOUSE BILL NO. 288
"An Act relating to commercial fisheries limited entry
permit buy-back programs."
REPRESENTATIVE DREW SCALZI, SPONSOR, spoke in support of the
legislation. He observed that the legislation would change
state statutes governing the buy back provision, currently
allowed under the limited entry permit system. He noted that
the bill removes the requirement that a state buyback
program be implemented after determination from an optimum
number study that the optimum number of permits is lower
than the number of permits currently in fishery. The
legislation eliminates the requirement that a buyback
program, buy out vessels and gear as well as permits. This
is the biggest detriment to a buy back program. He
maintained that the provision has prevented the
implementation of a program since its inclusion in statute
28 years ago. [Buying back vessels and gear] is a very
cumbersome and costly process.
Representative Scalzi explained that the legislation also
eliminates the mandate for a "dedicated fund", which is a
constitutional problem that exists in the funding mechanism
under current law. The provision provides that an assessment
on fishermen go directly into a buyback fund. Currently,
assessments go to the general fund and the legislature has
the discretion to appropriate the funds. The Commission has
no taxing authority. The provision [for a dedicated fund]
would be eliminated because it is constitutionally illegal.
Representative Scalzi observed that the legislation makes
only transferable permits eligible for buyback. (Current law
has provision for buying out nontransferable permits if
sufficient funds are available in the buyback fund.) He
acknowledged those with a nontransferable permit would be
unhappy with the provision, but emphasized that it would
help to extenuate a cheaper buy back program.
Representative Scalzi summarized the remaining changes
incorporated in the proposed committee substitute. The
committee substitute would eliminate the requirement to buy
the permits back within a 10-year period. The holder of a
permit may voluntarily relinquish their permit (whether
under a fleet consolidation or for any other reason). The
committee substitute also adds a definition of "optimum
number" to set an optimum number range, rather than one
number. The Commission doesn't know the optimum number that
would constitute a buy back. The only way that the
Commission can do it now is to throw out a number, buy the
permits to that number and then go to a judicial test; the
courts would decide the actual optimum number. He observed
that there is a disincentive since the court could rule
permits must be put back into the system if the buy back is
too low.
Representative Scalzi reiterated that under the current
law, the permit, vessel, and gear would have to be bought
out, which would be cumbersome and expensive. The
legislation would help streamline the process.
Vice-Chair Bunde questioned which limited entry permits
would be non-transferable.
Representative Scalzi explained that there were non-
transferable interim permits.
Vice-Chair Bunde questioned if permits that are bought back
would still be transferable and could be reissued if the
fisheries regained strength or would they always remain
property of the state. Representative Scalzi explained that
the permits would be retired unless the court required them
to be issued.
In response to a question by Vice-Chair Bunde,
Representative Scalzi noted that there is a zero fiscal note
because the provision already exists. Until a buy back plan
is implemented there is no cost. The state controls the
resource and permits, but those remaining in the fishery
would pay for the Fund. The provision was removed because
the dedicated fund portion was illegal. However, a collected
program receipts such as operates under Alaska Seafood
Marketing Institute would be possible and the sponsor would
not object. A buy back plan would be tailored to each
individual area. He observed that other legislation would
allow a consolidation and stressed that the intent is to
stimulate buy backs.
Vice-Chair Bunde questioned if the legislation would make a
buy back more likely and asked when a buy back program would
begin. Representative Scalzi noted that there have been no
buy backs since 1974, due to the difficulty.
Co-Chair Mulder noted that: "The commission may establish a
buy-back program, a buy-back plan, and a buy-back fund for
that fishery. If the commission establishes a buy-back
program for a fishery, the commission shall request the
legislature to appropriate money…" He asked why "shall" was
used instead of "may". He clarified that it would be funded
through an assessment of the membership.
Representative Hudson observed that it would be similar to
the funding of the Northern/Southeast Aquaculture
Associations. Co-Chair Mulder pointed out that there are
alternative means to asking the legislature for a "big
check." He suggested that the language be clarified to
indicate that a general fund expenditure is not expected; it
would be an other funds expenditure.
Representative John Davies questioned if the intent was for
the Fund to be capitalized with an appropriation from the
legislature. Co-Chair Mulder noted that he would not support
capitalization by the legislation.
MARY MCDOWELL, COMMISSIONER, COMMERCIAL FISHERIES ENTRY
COMMISSION, DEPARTMENT OF FISH AND GAME explained that the
intent was to get around the designated fund source problem,
with the understanding that an assessment of fishermen would
be the most likely source of funds. Any money collected has
to come into the general fund and be appropriated by the
legislature. The current language does not provide authority
for an assessment on fishermen. She observed that language
would need to be added. There is a question as to whether
the Commercial Fisheries Entry Commission has taxing
authority. Language would need to be drafted to allow funds
collected off fish sales to go through the Department of
Revenue. She clarified that state funds for a buy back are
not anticipated. The legislature would be the source of the
pass through funds. There may be some federal funds. The
legislation removes the provision to automatically kick into
a state run buy back program if an optimum number study
determined that there are too many permits in the fishery.
Under current law, if a study were done, the state would
automatically kick into a buy back program [if the number of
permits exceeded the optimum number. Fishermen are
interested in pursuing other options such as federal
funding. The legislation would provide the flexibility for
the Commission to do an optimum number study. She noted that
there is a risk [without an optimum number study] that the
court would declare that the fisheries is too exclusive and
permits would have to be put back in [after a buy out] and
all of the effort and expense of buying permits would have
gone to waste. Fishermen would like help in determining a
defensible range, so that they would have some assurance
that that they won't be forced to put bought out permits
back into the fisheries.
Representative Lancaster summarized the need to clarify the
funding source.
Representative Scalzi explained that is the current language
identifies the legislature for the appropriation. The state
controls the fisheries and the permitting process.
Representative Hudson agreed that clarification is needed to
establish the funding source; how it is to be accounted for;
and the responsibility of all the participants. He noted
that aquaculture associations tax members a little so that
the funds continue to grow. He agreed that section 5 needs
more work. He thought that the language inferred that the
legislature would put the "seed" money into the fund. He
noted that the money would go out but nothing would come in.
Both need to happen. He observed that the remaining members
might want to underwrite an assessment in order to refuel
the fund. He agreed concluded that more work needs to be
done regarding an assessment.
Ms. McDowell recounted discussions with fishermen. She noted
that if a particular fleet had an optimum number
determination which showed that it was necessary to buy out
some of the permits a plan would be establish, which would
probably included an assessment. A statutory request would
then be brought back to the legislature for that fishery.
Buy back programs would be specialized for the individual
fisheries. There has been an assumption that the fishermen
would have to pay for the program "one way or anohter." An
assessment would have to be authorized in another piece of
legislation if it is not included in section 5.
Representative Hudson recommended the addition of assessment
authorization.
Representative Scalzi did not object to the addition of
assessment authorization. He acknowledged that it has been
difficult to get fishermen to consider a buy back program.
There is no one that feels that the state of Alaska is going
to pub money into a buy back program without an assessment.
The language was removed because it was illegal. He observed
that there are concerns regarding a mandatory buy back
program.
Representative John Davies did not think that the Commission
could establish a fund. There needs to be a receiving fund
and an expending fund created by the legislature. He
stressed that the intent needs to be clarified if it is to
be a sub fund in the general fund.
Ms. McDowell noted that discussions with the sponsor
occurred regarding an assessment of fishermen, which the
legislature would appropriated for the intended use. There
was legal concern about the Commission's taxing authority to
implement an assessment. An amendment would be needed to
allow the Department of Revenue to collect the funds.
HB 288 was heard and HELD in Committee for further
consideration.
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.
ADJOURNMENT
The meeting was adjourned at 4:09 PM
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