Legislature(1995 - 1996)

04/20/1995 01:40 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                         APRIL 20, 1995                                        
                            1:40 P.M.                                          
                                                                               
  TAPE HFC 95 - 88, Side 1, #000 - end.                                        
  TAPE HFC 95 - 88, Side 2, #000 - end.                                        
  TAPE HFC 95 - 89, Side 1, #000 - end.                                        
  TAPE HFC 95 - 89, Side 2, #000 - #273.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House  Finance Committee                 
  meeting to order at 1:40 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kohring                         
  Co-Chair Foster               Representative Martin                          
  Representative Kelly          Representative Grussendorf                     
  Representative Brown          Representative Therriault                      
                                                                               
  Representatives Mulder, Parnell and Navarre were not present                 
  for the meeting.                                                             
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative  Bill  Williams;  Tom  Dow,  Vice  President,                 
  Princess  Tours; Kirsten  Martin,  Self, Anchorage;  Sherrie                 
  Goll,  Alaska  Women's  Lobby/KIDPAC,  Juneau; Susan  Burke,                 
  Attorney,  Gross  &  Burke,  Representing  Princess   Tours,                 
  Juneau;  Dennis Poshard,  Director,  Division of  Charitable                 
  Gaming, Department  of Revenue;  Jerry Luckhaupt,  Attorney,                 
  Legal  Counsel,  Division of  Legal Services;  Curtis Lomas,                 
  Welfare  Reform  Program,  Division  of  Public  Assistance,                 
  Department of  Health  and Social  Services;  Jim  Nordlund,                 
  Director,  Division  of  Public  Assistance,  Department  of                 
  Health and Social Services.                                                  
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 78     An  Act   relating  to   the  maximum  amount   of                 
            assistance that  may  be granted  under the  adult                 
            public assistance  program and the program  of aid                 
            to families with  dependent children; proposing  a                 
            special demonstration project  within the  program                 
            of aid  to families  with  dependent children  and                 
            directing  the  Department  of  Health and  Social                 
            Services  to   seek  waivers   from  the   federal                 
            government to implement the project.                               
                                                                               
                                                                               
                                1                                              
                                                                               
                                                                               
            HB   78  was   HELD  in   Committee   for  further                 
            consideration.                                                     
                                                                               
  HB 286    An Act  providing an exemption  from gambling  and                 
            certain  alcoholic  beverage  laws   for  gambling                 
            conducted  by  cruise  ships  for  their  ticketed                 
            passengers  in  the offshore  water of  the state;                 
            relating to  promotions  on  board  cruise  ships;                 
            defining  'cruise  ship'; providing  for exemption                 
            procedures for  certain cruise  ships before  they                 
            can conduct gambling in the  offshore water of the                 
            state;   providing   an    exemption   from    the                 
            coin-operated device tax for cruise ships exempted                 
            from  the  gambling  laws;  and providing  for  an                 
            effective date.                                                    
                                                                               
            CS HB 286 (FIN) was reported out of Committee with                 
            "no recommendation" and with a  fiscal note by the                 
            Department of Revenue dated 4/6/95.                                
  HOUSE BILL 286                                                               
                                                                               
       "An  Act  providing  an  exemption  from  gambling  and                 
       certain alcoholic beverage  laws for gambling conducted                 
       by cruise ships  for their  ticketed passengers in  the                 
       offshore water of the state;  relating to promotions on                 
       board cruise  ships; defining 'cruise  ship'; providing                 
       for  exemption  procedures  for  certain  cruise  ships                 
       before they can conduct gambling  in the offshore water                 
       of   the  state;  providing   an  exemption   from  the                 
       coin-operated device tax for cruise ships exempted from                 
       the  gambling  laws;  and  providing  for  an effective                 
       date."                                                                  
                                                                               
  REPRESENTATIVE WILLIAM WILLIAMS  testified in support of  HB
  286.    He  stated   that  HB  286  would  give   the  State                 
  authorization  to offer an  exemption from gambling statutes                 
  to cruise ships.  The exemption  would allow cruise ships to                 
  operate their casinos in Alaskan waters.                                     
                                                                               
  He added  that casino  gambling aboard  cruise  ships is  an                 
  amenity  needed to  keep  Alaska on  par  with other  cruise                 
  destinations.  While gambling is not  the main attraction of                 
  cruises,  it  is  an  accepted  and  expected  part  of  the                 
  experience.                                                                  
                                                                               
  Representative Williams added that the communities of Alaska                 
  would not be negatively affected by the legislation.  Casino                 
  operations  would  be  prohibited within  three  miles  of a                 
  vessel's  port  of call.   While  in  port the  casino would                 
  remain  closed, therefore removing  the opportunity for non-                 
  ticketed people to participate in the activities.                            
                                                                               
                                2                                              
                                                                               
                                                                               
  Representative Williams concluded that the legislation would                 
  support the tourism industry and would raise State revenues.                 
  He urged Committee members' support the legislation.                         
                                                                               
  TOM  DOW,  VICE  PRESIDENT,  PRINCESS  TOURS,  testified  in                 
  support of HB  286.   The legislation  would allow  gambling                 
  aboard  cruise ships  within  Alaskan  waters  for  ticketed                 
  cruise passengers.  Cruise ships would  be required to pay a                 
  fee to  the  State  for an  exemption  prior  to  conducting                 
  gambling under the legislation.                                              
                                                                               
  Mr. Dow added  that his company  believes that there are  no                 
  public policy  reasons to prohibit  the activity.   There is                 
  public  support  to  allow  it  to  continue  and  with  the                 
  provision  of  an exemption  fee,  there would  be  a simple                 
  method for  the State to  thus secure  revenues from  cruise                 
  lines who wish to continue to offer the entertainment option                 
  to   their   passengers.     He   added,  there   is  little                 
  administrative expense or burden placed on the State for the                 
  collection of the revenues.                                                  
                                                                               
  Representative Brown asked  if the fees recommended  in this                 
  year's legislation  were the same  as those in  the original                 
  legislation  last  year.   Mr.  Dow  replied  that the  fees                 
  reflect what  was passed last  year from Committee  and that                 
  those fees should  generate $600 thousand dollars  this year                 
  and more in the following year.                                              
                                                                               
  Representative Brown referenced Section #6 and asked why the                 
  exception was necessary: This prohibition  does not apply to                 
  on-shore excursions  that are sold  on board a  cruise ship.                 
  Mr. Dow commented, last year an amendment was offered to the                 
  legislation.  The legislation was directed at prohibiting or                 
  restricting  promotions to gift shops.   The language in the                 
  bill  specifically excluded  the  sale  of  shore  excursion                 
  products on  board.   Therefore, more  narrowly defined  the                 
  disclosure requirement to the area  of gift shop promotional                 
  lectures.                                                                    
                                                                               
  He pointed out, that practice has been applied frequently in                 
  the  Caribbean  areas  although  not  a common  practice  in                 
  Alaska.  Operators have attempted to do this over the years,                 
  although  the Princess  Line  has never  supported  it.   He                 
  understood the  practice was  not legal as  informed by  the                 
  Attorney  General's   office.    Because   the  last  year's                 
  legislation  that was  vetoed  contained  the exemption  for                 
  shore  excursion activities, that area was then readdressed.                 
  He added that it is common practice for cruise ship lines to                 
  offer  shore   excursion  activities  to  passengers.    The                 
  practice  is a  convenience for  the passengers  and to  the                 
  vendors providing the service.   Mr. Dow suggested  that the                 
                                                                               
                                3                                              
                                                                               
                                                                               
  information  could  be  disclosed  on  the  shore  excursion                 
  brochures.                                                                   
                                                                               
  Representative Brown referenced correspondence  from a local                 
  vendor  who  felt  that the  inclusion  of  the  sentence in                 
  Section #6 would be detrimental  to small and local vendors.                 
  Mr. Dow responded  that the cruise  lines has a  responsible                 
  role to guarantee that activities that involve equipment and                 
  transportation are  safe.   He emphasized  that the  current                 
  system  works  for  the  greater  benefit  of  most  of  the                 
  customers, passengers and vendors who are operating.                         
                                                                               
  Representative Martin voiced concern with "opening the door"                 
  to gambling in the State of Alaska.  Mr. Dow responded  that                 
  gambling would  be available only  to the passengers  on the                 
  cruise ships.    Representative Martin  emphasized that  the                 
  State  of  Alaska  prohibits  gambling.    He  asked if  the                 
  legislation could proliferate gambling in the State.                         
                                                                               
  Mr. Dow explained that this  precedence has been established                 
  in other  states  who share  a  gambling prohibition.    The                 
  unique quality of Alaska as opposed to other coastal states,                 
  is that in  Alaska, the  cruise pattern tends  to "hug"  the                 
  inside passage.  By some  definitions, the cruise ship would                 
  be  within  the  state  territorial  waters  at  all  times.                 
  Representative  Martin reemphasized  that  the cruise  lines                 
  would  be opening gambling for profit purposes as opposed to                 
  charitable  donations.    He  asked  the  type  of  gambling                 
  available aboard the ships.                                                  
                                                                               
  Mr. Dow explained the various forms available to the  cruise                 
  line passengers.  Representative Martin voiced resistance to                 
  video gambling and credit card gambling.   He felt that once                 
  the legislation moves through the Legislature, it would open                 
  up gambling possibilities throughout the State.                              
                                                                               
  Representative  Brown referenced a  memo from the Department                 
  of Revenue addressing  the legalization of slot  machines in                 
  the  proposed  legislation.  Mr.  Dow  stated  that  current                 
  information from the Department indicates  that there may be                 
  another  section  of  State law  that  prohibits  other coin                 
  operated  devices.   He  stated  that  it could  require  an                 
  amendment.                                                                   
                                                                               
  Mr.  Dow  added  that  it  would  be possible  to  pass  the                 
  exemptive legislation  and narrowly define  what is involved                 
  without  opening  the   State  of   Alaska  to  gambling.                    
  Representative  Martin asked if  Mr. Dow would  object to an                 
  amendment indicating that  proceeds from the gambling  would                 
  not be  allowed for political  campaigning.  Mr.  Dow stated                 
  that there was no intention  that the cruise operators would                 
  be using the proceeds to fund any outside activities.                        
                                                                               
                                4                                              
                                                                               
                                                                               
  SUSAN BURKE, ATTORNEY, GROSS & BURKE,  REPRESENTING PRINCESS                 
  TOURS, JUNEAU, spoke to the need for  a technical amendment.                 
  The Department of Law indicated that a problem existed  from                 
  the drafting,  which inadvertently  excluded slot  machines.                 
  Ms.  Burke  believed  that  the bill  as  passed  last  year                 
  adequately  covers  that  concern.   Although,  having  gone                 
  through the past two years legislative work, she recommended                 
  including the amendment.                                                     
                                                                               
  Ms.  Burke  noted that  Amendment  #1 [Attachment  #1] would                 
  provide  clear  intent  that  slot  machines  would  not  be                 
  included in the exemption for cruise ships.                                  
                                                                               
  Mr. Burke  responded to Representative Martin's concern that                 
  under the  equal protection  doctrine, by  passing the  bill                 
  providing an exemption from casino gambling for cruise ships                 
  would not allow anyone in  the State the authority to go  to                 
  court and  appeal for the same rights.   She stated this was                 
  not  a concern.   Under  the equal  protection analysis,  to                 
  treat  one  class of  person  different from  another, would                 
  require good reason  for doing  so.  Ms.  Burke added,  when                 
  speaking  about   commercial  regulations  to   conduct  the                 
  gambling activity,  there would  be no  chance that  a court                 
  would  come  to  the  conclusion  that an  equal  protection                 
  problem existed.                                                             
                                                                               
  (Tape Change, HFC 95-88, Side 2).                                            
                                                                               
  Ms. Burke  noted that  Amendment #1  would clarify  existing                 
  law,  adding new  language AS 05.15.250.   The  effect would                 
  establish the  fact of cruise  ship exemption, and  that any                 
  prohibitions  resulting from  lack  of authorization  listed                 
  would not apply to the cruise ships.                                         
                                                                               
  Representative  Martin voiced  concern that  the legislation                 
  would bring gambling to the State  in order to generate more                 
  revenues.  Ms. Burke noted that  there would be a difference                 
  between having a gambling operation located on land in which                 
  everyone had access to gambling on board a cruise ship.  The                 
  activity of gambling on the cruise ship would be an activity                 
  which in actuality would not  take place in Alaska, although                 
  it would in a technical sense.                                               
                                                                               
  Representative  Therriault  MOVED  to  adopt  Amendment  #1.                 
  Representative Martin OBJECTED for purposes of discussion.                   
                                                                               
  DENNIS  POSHARD, DIRECTOR,  DIVISION  OF CHARITABLE  GAMING,                 
  DEPARTMENT  OF  REVENUE,  noted  that   the  position  paper                 
  distributed to  Committee members resulted from a discussion                 
  with  the  Department of  Law.   However,  he felt  that the                 
  amendment was not needed because of Section 2(d) which would                 
                                                                               
                                5                                              
                                                                               
                                                                               
  address the concern.                                                         
                                                                               
  The area of a potential problem results from the regulations                 
  which were  adopted in accordance with Title  43, the taxing                 
  provisions  for coin  operated devices.   The basis  for the                 
  particular regulation which  makes Class 2 and  Class 3 coin                 
  operated  devices  illegal,  was  the   criminal  and  civil                 
  statutes  which  prohibit  slot machines  and  coin operated                 
  devices.     Mr.  Poshard   added,  from   discussions  with                 
  Legislative  Legal  Counsel,  the  Department  of  Revenue's                 
  concern with the proposed legislation has been alleviated.                   
                                                                               
  Mr. Poshard  commented that the main intent  of the position                 
  paper was  to address  the relationship  between the  cruise                 
  ship gambling  bill and  the negotiations  which are  taking                 
  place  with  Klawock Native  group  involving a  contract to                 
  conduct Class 3 gaming activities.                                           
                                                                               
  Representative   Martin   asked   for  further   information                 
  regarding the Native  American court cases and  the gambling                 
  concern.   Mr. Poshard  stated that there  are several cases                 
  existing although he could not speculate on the relationship                 
  between those cases  and the proposed legislation.   Federal                 
  law requires entering  into negotiations in good  faith with                 
  any recognized  Indian tribes  as lands  that could  conduct                 
  gaming.                                                                      
                                                                               
  Representative Martin asked  if the  State could prohibit  a                 
  group of people  from gambling.  Mr.  Poshard explained that                 
  the only  basis for  allowing the  gaming to  take place  on                 
  Indian lands  is through  the Indian  Gaming Regulatory  Act                 
  which is federal law.   No other states which  have gambling                 
  prohibitions, have  also permitted  other types  of gambling                 
  following the agreement with an  Indian tribe on reservation                 
  land.                                                                        
                                                                               
  A roll call was taken on the MOTION to adopt Amendment #1.                   
                                                                               
       IN FAVOR:      Grussendorf, Kelly, Kohring, Therriault,                 
                      Brown, Foster, Hanley                                    
       OPPOSED:       Martin                                                   
                                                                               
  Representatives Mulder, Navarre and Parnell were not present                 
  for the vote.                                                                
                                                                               
  The MOTION PASSED (7-1).                                                     
                                                                               
  Representative  Grussendorf why  the  number 300  passengers                 
  qualified  a  boat  as  a   "cruise"  ship  thus  permitting                 
  gambling.   Ms. Burke stated that  it was the intent  of the                 
  legislation  to  limit the  gambling  to the  larger vessels                 
  which  offer   a  big   range  of   entertainment  services.                 
                                                                               
                                6                                              
                                                                               
                                                                               
  Establishing  that  number  would  eliminate  a  small  boat                 
  claiming status  in order to  offer gambling.   She remarked                 
  that the language would close any possible loop holes.                       
                                                                               
  JERRY LUCKHAUPT, ATTORNEY, LEGAL  COUNSEL, DIVISION OF LEGAL                 
  SERVICES, stated that the operator  of the cruise ship would                 
  have to apply for the exemption as specified in Section 2 of                 
  the legislation.  The definition would exclude anyone who is                 
  not eligible to obtain  an exemption.  Each ship  would have                 
  to apply  for an  exemption separately  and each ship  could                 
  loose their exemption separately.                                            
                                                                               
  Representative Therriault MOVED  to report  CS HB 286  (FIN)                 
  out of Committee  with individual  recommendations and  with                 
  the accompanying fiscal note.   There being NO OBJECTION, it                 
  was so ordered.                                                              
                                                                               
  CS  HB  286 (FIN)  was reported  out  of Committee  with "no                 
  recommendations" and with a fiscal note by the Department of                 
  Revenue dated 4/06/95.                                                       
  HOUSE BILL 78                                                                
                                                                               
       "An Act relating  to the  maximum amount of  assistance                 
       that may be  granted under the adult  public assistance                 
       program  and  the  program  of  aid  to  families  with                 
       dependent children; proposing  a special  demonstration                 
       project  within  the program  of  aid to  families with                 
       dependent children  and  directing  the  Department  of                 
       Health and  Social Services  to seek  waivers from  the                 
       federal government to implement the project."                           
                                                                               
  Co-Chair Hanley provided an  overview of HB 78.   He pointed                 
  out that the intent  of welfare reform is to get  people off                 
  welfare.    According  to  a  recent  survey  by  the  State                 
  Department  of Health  and Social  Services,  88% of  Aid to                 
  Families  with Dependent Children  (AFDC) clients  in Alaska                 
  have  indicated  that they  would  rather  work than  be  on                 
  welfare.                                                                     
                                                                               
  Co-Chair Hanley  stated that  HB 78  would  provide for  the                 
  Department  of Health  and Social  Services to  apply for  a                 
  series of waivers  from the usual provisions  governing AFDC                 
  programs.   A "workfare"  project would  be established  and                 
  would require able-bodied recipients who were not working at                 
  least 15 hours a  week to perform community service  or have                 
  their benefits reduced.                                                      
                                                                               
  Co-Chair Hanley concluded that the legislation would provide                 
  positive  incentives to  work in  the form of  higher income                 
  allowance and higher vehicle allowance.   The costs of child                 
  care and  transportation necessary for participation  in the                 
                                                                               
                                7                                              
                                                                               
                                                                               
  program would be covered  by the Department.  He  added that                 
  HB 78 would be an initial step towards breaking the cycle of                 
  dependence on welfare by rewarding hard work.                                
                                                                               
  Co-Chair  Hanley  provided  a   sectional  analysis  of  the                 
  legislation.   HB 78 amends  existing statutes for  the AFDC                 
  program.  The legislation would  authorize the Department to                 
  seek  federal  approval  to operate  four  experimental AFDC                 
  demonstration  projects  under   the  authority  of  Section                 
  1115(a) of the  Social Security  Act, which would  authorize                 
  imposition of certain modified AFDC eligibility criteria and                 
  requirements for  participation in a mandatory  work program                 
  for project  participants.   The project  would establish  a                 
  ratable reduction in  benefit payments for the  AFDC program                 
  statewide.                                                                   
                                                                               
  Co-Chair  Hanley added, under the waiver,  a person would be                 
  allowed to receive up to $200  hundred dollars for the first                 
  amount of money  made and that,  they would be able  to keep                 
  1/3 of the remainder made.   This would provide an incentive                 
  for people while also allowing them to  improve their status                 
  by working  and at  the same  time would  help the  State by                 
  reducing the amount of money spent.                                          
                                                                               
                                                                               
  (Tape Change, HFC 95-89, Side 1).                                            
                                                                               
  Co-Chair  Hanley  continued explaining  each section  of the                 
  bill.    He   reiterated  that   the  Department  would   be                 
  responsible for  paying  the child  care  costs as  well  as                 
  transportation  costs.   One  of  the fiscal  notes included                 
  would cover those expenses.                                                  
                                                                               
  JIM  NORDLUND,  DIRECTOR,  DIVISION  OF  PUBLIC  ASSISTANCE,                 
  DEPARTMENT  OF  HEALTH  AND  SOCIAL  SERVICES,  stated  that                 
  Section  #7   would  establish  an  AFDC  unemployed  parent                 
  demonstration   project,   to  assist   two-parent  families                 
  establish self-sufficiency within three years.                               
                                                                               
  He added that  Section #8 would establish  a self-employment                 
  demonstration  project to assist AFDC recipients in reducing                 
  their need  for benefits by  allowing them to  establish and                 
  operate a microenterprise.   Co-Chair Hanley commented  that                 
  the current system prohibits participants from  saving money                 
  as it would place them over the asset limit.                                 
                                                                               
  Representative Grussendorf  spoke in  favor of  the proposed                 
  programs,  although  expressed  hesitation on  the  proposed                 
  program funding.    He communicated  that the money to  fund                 
  the  program would  be  taken from  those  already poor  and                 
  making them more poor  for making the experiment work.   Mr.                 
  Nordlund added, a  rateable reduction  of 1.7% amounting  to                 
                                                                               
                                8                                              
                                                                               
                                                                               
  $13 dollars per month per one adult  and child unit would be                 
  added.   He stressed that  the current system  would operate                 
  the same, although there would be demonstration projects for                 
  certain selected persons receiving AFDC.  The auto exemption                 
  would not apply for all AFDC participants in the State.                      
                                                                               
  Co-Chair  Hanley  commented on  Section #9,  the "diversion"                 
  demonstration  project,   which  would   offer  short   term                 
  financial  assistance to job-ready  AFDC applicants in order                 
  to avoid long-term financial support.                                        
                                                                               
  Representative Martin asked  the intent  of the language  on                 
  Page 8,  Line 18, "(2)  disregard up to  $500 each  month in                 
  nonbusiness  income  set   aside  for  the  development   or                 
  operation of the microenterprise;".                                          
                                                                               
  CURTIS  LOMAS, WELFARE  REFORM PROGRAM,  DIVISION OF  PUBLIC                 
  ASSISTANCE,  DEPARTMENT  OF   HEALTH  AND  SOCIAL  SERVICES,                 
  explained that  language provided  a provision  to allow  an                 
  individual to set aside income from some source other than a                 
  business as a way to capitalize.   The provision would allow                 
  the AFDC individual to  accrue up to $500 dollars  per month                 
  and  place into  a business  capital account with  a maximum                 
  limit of $10  thousand dollars.   That amount  would not  be                 
  considered as income.                                                        
                                                                               
  Representative  Martin  questioned  how the  Permanent  Fund                 
  Dividend  checks  and  share  holding  reimbursements  would                 
  affect  a   persons  qualifications  to   receiving  welfare                 
  subsidies.  Mr. Nordlund stated that  the bill would have no                 
  effect on any AFDC recipients  dividend check resulting from                 
  the  "hold harmless"  provision in  current law.   Mr. Lomas                 
  added, in terms of the PFD checks, the "hold harmless" would                 
  allow a four  month investment limit.   Currently, a  person                 
  could  set  aside  the  check  into  a  savings account  and                 
  continue  to have their eligibility protected for up to four                 
  months.  If  that person  chose to place  that saved  amount                 
  into  a  microenterprise account,  a  limit would  no longer                 
  exist.                                                                       
                                                                               
  Mr. Nordlund added that there  would be administrative costs                 
  associated with the new demonstration projects.  In order to                 
  move  forward  with  welfare  reform,  to move  people  from                 
  welfare to work, new ideas must  be tried.  He applauded all                 
  demonstration projects found  in the bill stating  that they                 
  are good ideas and worthy of testing.                                        
                                                                               
  Representative  Martin  criticized  encouraging any  further                 
  exemptions  to  the welfare  program.   Mr.  Lomas clarified                 
  information regarding dividend payments received from Native                 
  corporations.  He stated that  as a part of the 1988  Native                 
  Claim  Settlement  Act,  a  $2  thousand  dollar  limit  was                 
                                                                               
                                9                                              
                                                                               
                                                                               
  established in federal law; this was not a state policy.  He                 
  added  that this  was  not an  exclusive  Alaskan policy  as                 
  referenced by Representative Martin.                                         
                                                                               
  KIRSTEN  MARTIN,  SELF,  PRISONERS  OF  WELFARE  WORKING  ON                 
  WINNING, ANCHORAGE, provided the Committee with a handout of                 
  the  monthly  expenditures for  the average  AFDC recipient.                 
  [Attachment #2].                                                             
                                                                               
  She asked for  further consideration of  the portion of  the                 
  legislation requiring  the under eighteen  welfare recipient                 
  to  live with the  parent which would  require that parent's                 
  income  to  be  the  determinant  in  deciding  the  medical                 
  expenses of the AFDC recipient.  She directed her concern to                 
  "breaking"  the  grandparent's  "pocket book".    Ms. Martin                 
  requested  that   language   be  changed   to  exempt   that                 
  responsibility.                                                              
                                                                               
  Mr. Lomas instructed that federal law computes the income of                 
  a parent when  the child is living with them.  He added that                 
  the bill  could  change that  policy, however,  the way  the                 
  legislation  is  structured, there  is  a federal  option to                 
  require teens  to live  at home.   To  change that  language                 
  would depend  on the State  of Alaska adopting  that option.                 
  He added, that section  of the bill was not  a demonstration                 
  project, but was a portion of the bill which was an exercise                 
  as an option  of federal  law.  To  change that  "treatment"                 
  would require a waiver of that portion of the bill.                          
                                                                               
  Representative  Martin  interjected  that   supporting  that                 
  waiver would encourage  more teenage parents to  leave home.                 
  Representative  Martin  cited  the  responsibility  of   the                 
  biological father.  Ms. Martin discussed the lengthy time it                 
  takes for the  Child Support  Enforcement Agency to  enforce                 
  child support.   She personally  has waited  for five  years                 
  without  any child  support compensation.    Co-Chair Hanley                 
  advised that there  is not  much flexibility within  current                 
  laws.                                                                        
                                                                               
  Representative Brown asked what a cut to the benefits  would                 
  mean to  someone receiving AFDC.   Ms. Martin  affirmed that                 
  she  was  fortunate in  that  she currently  received rental                 
  assistance.  Without rental assistance,  she stated that she                 
  would most  likely lose her  housing.   Ms. Martin  stressed                 
  that  a  ($15) fifteen  dollar  cut  would  be dramatic  for                 
  someone on  such a  "tight" budget.   Ms. Martin  emphasized                 
  that all  shelters and  most churches  are full;  food banks                 
  have reached their limit.  She  stated that many people will                 
  loose their homes and the end product will be that many more                 
  children  will be  taken  by Division  of  Family and  Youth                 
  Services  (DFYS)  because  the  parents  will no  longer  be                 
  adequately able to  support the child's  needs.  She  added,                 
                                                                               
                               10                                              
                                                                               
                                                                               
  currently  there  are  not  enough  foster parents  for  the                 
  children needing home placements.                                            
  Ms. Martin remarked that she was involved in creating a self                 
  sufficiency group  with other AFDC  recipients through local                 
  networking.    Some  of  the   items  targeted  through  the                 
  networking are  child care  and transportation  needs.   She                 
  agreed  that  there  are  failures  in the  present  system,                 
  although there  are many AFDC  recipients who are  trying to                 
  find ways to better themselves.                                              
                                                                               
  SHERRIE GOLL,  ALASKA WOMEN'S  LOBBY/KIDPAC, JUNEAU,  stated                 
  that HB 78 was clearly the most rational approach considered                 
  by the Legislature, pointing out that  it was full of things                 
  which removed disincentives for families  to become employed                 
  and stay employed.                                                           
                                                                               
  Ms.  Goll focused  on  specific areas  of  concern with  the                 
  proposed  legislation.   The  first  concern of  the Women's                 
  Lobby is the teen parent project.  Ms. Goll pointed out that                 
  Alaska  has a high teen birth rate.  In 1993, 1189 teenagers                 
  had babies.  The total case load of teen parents on  AFDC is                 
  141.  She noted that the  vast majority of teenagers who are                 
  having children, are living  at home with their parents  and                 
  being supported.                                                             
                                                                               
  Ms. Goll applauded the exemptions for those with no parental                 
  support,  or  if the  home of  the  teenager was  an abusive                 
  situation and the  teen could not  live there.  She  pointed                 
  out that 70 recipients would be affected by the project.  In                 
  determining each case, investigation would be required.                      
                                                                               
  Ms. Goll emphasized that her main  concern would be with the                 
  health  care  needs  of  a   pregnant  teenager.    Pregnant                 
  teenagers have poor  health outcomes  which often mean  poor                 
  health outcomes for  their children.   Premature births  are                 
  much more common in teens, and most of the low birth  weight                 
  babies born prematurely will have health problems throughout                 
  their  life.   Ms.  Goll emphasized  that  prenatal care  is                 
  important as is  good nutrition as  well as the delivery  of                 
  the child.                                                                   
                                                                               
  In  considering  the  parents  income,  the  minor  will  be                 
  required  to  live at  home as  a condition  of eligibility.                 
  Unless the parent of the minor  is also on welfare, the teen                 
  would not be  eligible for any  assistance.  The concept  of                 
  holding the parents income harmless in  some way so that the                 
  teen could be  eligible for assistance necessary  for her to                 
  have a healthy baby needs to be reconsidered if that section                 
  remains in the bill.                                                         
                                                                               
  Ms. Goll  continued  addressing other  issues regarding  the                 
  personal responsibility  of the  "other" parent  of the  new                 
                                                                               
                               11                                              
                                                                               
                                                                               
  baby.  In 60% of the cases where a teenage girl is pregnant,                 
  the father of that child is an adult.   Ms. Goll recommended                 
  that the State provide active child support collection.  The                 
  other 40% of the  fathers are teen age boys.   The family of                 
  the teenage  girl is required to take personal and financial                 
  responsibility for the  teenager and new baby,  although the                 
  same  responsibility  is  not  required  of the  teen  dad's                 
  family.    Ms. Goll  emphasized  that consideration  of that                 
  section of the bill be given deeper scrutiny or that section                 
  of the bill be dropped.   Ms. Goll requested that one  other                 
  exemption be considered.                                                     
                                                                               
  (Tape Change, HFC 95-89, Side 2).                                            
                                                                               
  Ms. Goll stated that if a student is enrolled in a four year                 
  education program, they  should not be  required to work  20                 
  hours a week as well.                                                        
                                                                               
  Ms. Goll spoke to the "unemployed"  parent project.  Until a                 
  few years ago, AFDC was only available to single parents who                 
  had dependent  children.   In 1988,  there was  a change  in                 
  federal  law, which  indicated that  law  broke-up families.                 
  The federal  law mandated on states that two parent families                 
  should be  included in welfare  eligibility when one  of the                 
  parents was unemployed.   She pointed out that at  that time                 
  case  loads grew significantly.  She  noted that by October,                 
  that mandate could be terminated.                                            
                                                                               
  Much of the JOBS training money currently is distributed for                 
  the two parent families.  Those are the persons who  will be                 
  greatly affected by the hundred hour rule.  That group could                 
  most  benefit from  the  limit and  could  live within  that                 
  restraint.                                                                   
                                                                               
  Ms.  Goll  opposed   the  rateable   reductions.     Without                 
  subsidized  housing, of which  only 20% percent  of the AFDC                 
  recipients qualify, an AFDC recipient could not make it with                 
  a $15  dollar monthly  reduction.   She emphasized  that the                 
  costs of  welfare changes  should be  offset with  increased                 
  child support collections.                                                   
                                                                               
  Ms. Goll noted that major changes on the federal level would                 
  be occurring by October.  She  added that these changes will                 
  probably block  grant the funds  and will  most likely  come                 
  with  less  restrictions,  rather  than  new  and  different                 
  restrictions.     However,  the  welfare   system  will   be                 
  redesigned.    She  requested that  the  Committee  consider                 
  putting off changes to the welfare system  until the federal                 
  changes  have been  made.  Ms.  Goll suggested  changing the                 
  effective  dates   for  applying  for  the  "waivers"  until                 
  January, 1996.                                                               
                                                                               
                                                                               
                               12                                              
                                                                               
                                                                               
  Ms. Goll  urged the  Committee to  consider off-setting  the                 
  cost of the programs other than on the "backs  of the poor".                 
   She pointed out that action  would hurt 14,000 children  in                 
  Alaska.                                                                      
                                                                               
  HB 78 was HELD in Committee for further consideration.                       
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:55 P.M.                                           
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                         APRIL 20, 1995                                        
                            1:40 P.M.                                          
                                                                               
  TAPE HFC 95 - 88, Side 1, #000 - end.                                        
  TAPE HFC 95 - 88, Side 2, #000 - end.                                        
  TAPE HFC 95 - 89, Side 1, #000 - end.                                        
  TAPE HFC 95 - 89, Side 2, #000 - #273.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark Hanley  called  the  House Finance  Committee                 
  meeting to order at 1:40 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kohring                         
  Co-Chair Foster               Representative Martin                          
  Representative Kelly          Representative Grussendorf                     
  Representative Brown          Representative Therriault                      
                                                                               
  Representatives Mulder, Parnell and Navarre were not present                 
  for the meeting.                                                             
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative  Bill  Williams;  Tom  Dow,  Vice  President,                 
  Princess  Tours;  Kirsten Martin,  Self,  Anchorage; Sherrie                 
  Goll, Alaska  Women's  Lobby/KIDPAC,  Juneau;  Susan  Burke,                 
  Attorney,  Gross  &   Burke,  Representing  Princess  Tours,                 
  Juneau;  Dennis  Poshard, Director,  Division  of Charitable                 
  Gaming, Department  of Revenue;  Jerry Luckhaupt,  Attorney,                 
  Legal  Counsel, Division  of Legal  Services; Curtis  Lomas,                 
  Welfare  Reform  Program,  Division  of  Public  Assistance,                 
  Department  of Health  and  Social  Services; Jim  Nordlund,                 
  Director,  Division  of  Public  Assistance,  Department  of                 
  Health and Social Services.                                                  
                                                                               
  SUMMARY                                                                      
                                                                               
                                                                               
                               13                                              
                                                                               
                                                                               
  HB 78     An  Act   relating  to   the  maximum  amount   of                 
            assistance that  may  be granted  under the  adult                 
            public assistance  program and the program  of aid                 
            to families with  dependent children; proposing  a                 
            special demonstration project  within the  program                 
            of aid  to families  with  dependent children  and                 
            directing  the  Department  of  Health and  Social                 
            Services  to   seek  waivers   from  the   federal                 
            government to implement the project.                               
                                                                               
            HB   78  was   HELD   in  Committee   for  further                 
            consideration.                                                     
                                                                               
  HB 286    An Act providing  an exemption  from gambling  and                 
            certain  alcoholic  beverage  laws   for  gambling                 
            conducted  by  cruise  ships  for  their  ticketed                 
            passengers  in the  offshore water  of the  state;                 
            relating  to  promotions  on board  cruise  ships;                 
            defining  'cruise  ship'; providing  for exemption                 
            procedures for  certain cruise  ships before  they                 
            can conduct gambling in the  offshore water of the                 
            state;   providing   an    exemption   from    the                 
            coin-operated device tax for cruise ships exempted                 
            from  the  gambling  laws; and  providing  for  an                 
            effective date.                                                    
                                                                               
            CS HB 286 (FIN) was reported out of Committee with                 
            "no recommendation" and with a  fiscal note by the                 
            Department of Revenue dated 4/6/95.                                
                                                                               
  HOUSE BILL 286                                                               
                                                                               
       "An  Act  providing  an  exemption  from  gambling  and                 
       certain alcoholic beverage laws  for gambling conducted                 
       by cruise ships  for their  ticketed passengers in  the                 
       offshore water of the state;  relating to promotions on                 
       board cruise ships;  defining 'cruise ship';  providing                 
       for  exemption  procedures  for  certain  cruise  ships                 
       before they can conduct gambling  in the offshore water                 
       of  the   state;  providing   an  exemption   from  the                 
       coin-operated device tax for cruise ships exempted from                 
       the  gambling  laws;  and  providing for  an  effective                 
       date."                                                                  
                                                                               
  REPRESENTATIVE WILLIAM  WILLIAMS testified in support  of HB
  286.    He  stated   that  HB  286  would  give   the  State                 
  authorization to  offer an exemption from  gambling statutes                 
  to cruise ships.  The exemption  would allow cruise ships to                 
  operate their casinos in Alaskan waters.                                     
                                                                               
  He  added that  casino gambling  aboard cruise  ships is  an                 
  amenity  needed  to keep  Alaska  on par  with  other cruise                 
                                                                               
                               14                                              
                                                                               
                                                                               
  destinations.  While  gambling is not the main attraction of                 
  cruises,  it  is  an  accepted  and  expected  part  of  the                 
  experience.                                                                  
                                                                               
  Representative Williams added that the communities of Alaska                 
  would not be negatively affected by the legislation.  Casino                 
  operations  would  be  prohibited within  three  miles  of a                 
  vessel's  port  of call.   While  in  port the  casino would                 
  remain  closed, therefore removing  the opportunity for non-                 
  ticketed people to participate in the activities.                            
                                                                               
  Representative Williams concluded that the legislation would                 
  support the tourism industry and would raise State revenues.                 
  He urged Committee members' support the legislation.                         
                                                                               
  TOM  DOW,  VICE  PRESIDENT,  PRINCESS  TOURS,  testified  in                 
  support of  HB 286.   The legislation  would allow  gambling                 
  aboard  cruise  ships  within  Alaskan  waters  for ticketed                 
  cruise passengers.  Cruise ships would  be required to pay a                 
  fee  to  the State  for  an  exemption prior  to  conducting                 
  gambling under the legislation.                                              
                                                                               
  Mr. Dow added  that his company  believes that there are  no                 
  public policy  reasons to prohibit  the activity.   There is                 
  public  support  to  allow  it  to  continue  and  with  the                 
  provision  of an  exemption  fee, there  would  be a  simple                 
  method for  the State  to thus secure  revenues from  cruise                 
  lines who wish to continue to offer the entertainment option                 
  to   their   passengers.     He   added,  there   is  little                 
  administrative expense or burden placed on the State for the                 
  collection of the revenues.                                                  
                                                                               
  Representative Brown asked  if the fees recommended  in this                 
  year's legislation were  the same as  those in the  original                 
  legislation last  year.    Mr.  Dow replied  that  the  fees                 
  reflect  what was passed  last year from  Committee and that                 
  those fees should  generate $600 thousand dollars  this year                 
  and more in the following year.                                              
                                                                               
  Representative Brown referenced Section #6 and asked why the                 
  exception was necessary: This prohibition  does not apply to                 
  on-shore excursions  that are sold  on board a  cruise ship.                 
  Mr. Dow commented, last year an amendment was offered to the                 
  legislation.  The legislation was directed at prohibiting or                 
  restricting promotions to  gift shops.  The language  in the                 
  bill  specifically  excluded  the  sale  of  shore excursion                 
  products on  board.   Therefore, more  narrowly defined  the                 
  disclosure requirement to the area  of gift shop promotional                 
  lectures.                                                                    
                                                                               
  He pointed out, that practice has been applied frequently in                 
  the  Caribbean  areas  although  not  a common  practice  in                 
                                                                               
                               15                                              
                                                                               
                                                                               
  Alaska.  Operators have attempted to do this over the years,                 
  although  the Princess  Line  has never  supported  it.   He                 
  understood  the practice was  not legal  as informed  by the                 
  Attorney  General's   office.    Because   the  last  year's                 
  legislation  that was  vetoed  contained  the exemption  for                 
  shore  excursion activities, that area was then readdressed.                 
  He added that it is common practice for cruise ship lines to                 
  offer  shore   excursion  activities  to  passengers.    The                 
  practice  is a  convenience for  the  passengers and  to the                 
  vendors  providing the service.   Mr. Dow suggested that the                 
  information  could  be  disclosed  on  the  shore  excursion                 
  brochures.                                                                   
                                                                               
  Representative Brown referenced correspondence from a  local                 
  vendor  who  felt that  the  inclusion  of the  sentence  in                 
  Section #6 would be detrimental to  small and local vendors.                 
  Mr. Dow  responded that the  cruise lines has  a responsible                 
  role to guarantee that activities that involve equipment and                 
  transportation are  safe.   He emphasized  that the  current                 
  system  works  for  the  greater  benefit  of  most  of  the                 
  customers, passengers and vendors who are operating.                         
                                                                               
  Representative Martin voiced concern with "opening the door"                 
  to gambling in the State of Alaska.  Mr.  Dow responded that                 
  gambling would be  available only to  the passengers on  the                 
  cruise  ships.   Representative Martin  emphasized that  the                 
  State of  Alaska  prohibits  gambling.    He  asked  if  the                 
  legislation could proliferate gambling in the State.                         
                                                                               
  Mr. Dow explained that this  precedence has been established                 
  in  other  states who  share  a gambling  prohibition.   The                 
  unique quality of Alaska as opposed to other coastal states,                 
  is that in  Alaska, the  cruise pattern tends  to "hug"  the                 
  inside passage.  By some definitions,  the cruise ship would                 
  be  within  the  state  territorial  waters  at  all  times.                 
  Representative  Martin reemphasized  that  the cruise  lines                 
  would be opening  gambling for profit purposes as opposed to                 
  charitable  donations.    He  asked  the  type  of  gambling                 
  available aboard the ships.                                                  
                                                                               
  Mr. Dow  explained the various forms available to the cruise                 
  line passengers.  Representative Martin voiced resistance to                 
  video gambling and credit card gambling.   He felt that once                 
  the legislation moves through the Legislature, it would open                 
  up gambling possibilities throughout the State.                              
                                                                               
  Representative Brown  referenced a memo from  the Department                 
  of Revenue addressing  the legalization of slot  machines in                 
  the  proposed  legislation.  Mr.  Dow  stated  that  current                 
  information from the Department indicates  that there may be                 
  another  section  of  State law  that  prohibits  other coin                 
  operated  devices.    He stated  that  it  could require  an                 
                                                                               
                               16                                              
                                                                               
                                                                               
  amendment.                                                                   
                                                                               
  Mr.  Dow  added  that  it  would  be possible  to  pass  the                 
  exemptive legislation  and narrowly define  what is involved                 
  without  opening  the   State  of   Alaska  to  gambling.                    
  Representative Martin  asked if Mr.  Dow would object  to an                 
  amendment indicating that  proceeds from the gambling  would                 
  not be  allowed for political  campaigning.  Mr.  Dow stated                 
  that  there was no intention that the cruise operators would                 
  be using the proceeds to fund any outside activities.                        
                                                                               
  SUSAN BURKE, ATTORNEY, GROSS  & BURKE, REPRESENTING PRINCESS                 
  TOURS, JUNEAU, spoke to the need for a technical  amendment.                 
  The Department  of Law indicated that a problem existed from                 
  the  drafting, which  inadvertently excluded  slot machines.                 
  Ms.  Burke  believed  that  the  bill as  passed  last  year                 
  adequately  covers  that  concern.   Although,  having  gone                 
  through the past two years legislative work, she recommended                 
  including the amendment.                                                     
                                                                               
  Ms.  Burke  noted that  Amendment  #1 [Attachment  #1] would                 
  provide  clear  intent  that  slot  machines  would  not  be                 
  included in the exemption for cruise ships.                                  
                                                                               
  Mr. Burke responded to Representative Martin's concern  that                 
  under the  equal protection  doctrine, by  passing the  bill                 
  providing an exemption from casino gambling for cruise ships                 
  would not allow  anyone in the State the authority  to go to                 
  court and appeal for the  same rights.  She stated this  was                 
  not a  concern.   Under  the equal  protection analysis,  to                 
  treat  one  class of  person  different from  another, would                 
  require good reason  for doing  so.  Ms.  Burke added,  when                 
  speaking  about   commercial  regulations  to   conduct  the                 
  gambling activity, there  would be  no chance  that a  court                 
  would  come  to  the  conclusion  that an  equal  protection                 
  problem existed.                                                             
                                                                               
  (Tape Change, HFC 95-88, Side 2).                                            
                                                                               
  Ms. Burke  noted that  Amendment #1  would clarify  existing                 
  law,  adding new  language AS  05.15.250.  The  effect would                 
  establish the  fact of cruise  ship exemption, and  that any                 
  prohibitions  resulting  from lack  of  authorization listed                 
  would not apply to the cruise ships.                                         
                                                                               
  Representative Martin  voiced concern  that the  legislation                 
  would bring gambling to the State  in order to generate more                 
  revenues.  Ms. Burke noted that  there would be a difference                 
  between having a gambling operation located on land in which                 
  everyone had access to gambling on board a cruise ship.  The                 
  activity of gambling on the cruise ship would be an activity                 
  which in actuality would not take  place in Alaska, although                 
                                                                               
                               17                                              
                                                                               
                                                                               
  it would in a technical sense.                                               
                                                                               
  Representative  Therriault  MOVED  to  adopt  Amendment  #1.                 
  Representative Martin OBJECTED for purposes of discussion.                   
                                                                               
  DENNIS  POSHARD, DIRECTOR,  DIVISION  OF CHARITABLE  GAMING,                 
  DEPARTMENT  OF  REVENUE,  noted  that   the  position  paper                 
  distributed to  Committee members resulted from a discussion                 
  with  the  Department of  Law.   However,  he felt  that the                 
  amendment was not needed because of Section 2(d) which would                 
  address the concern.                                                         
                                                                               
  The area of a potential problem results from the regulations                 
  which were adopted in  accordance with Title 43, the  taxing                 
  provisions for  coin operated  devices.   The basis  for the                 
  particular regulation which makes  Class 2 and Class  3 coin                 
  operated  devices  illegal,  was   the  criminal  and  civil                 
  statutes  which prohibit  slot  machines and  coin  operated                 
  devices.     Mr.  Poshard   added,  from   discussions  with                 
  Legislative  Legal  Counsel,  the  Department  of  Revenue's                 
  concern with the proposed legislation has been alleviated.                   
                                                                               
  Mr. Poshard commented that  the main intent of the  position                 
  paper was  to address  the relationship  between the  cruise                 
  ship gambling  bill and  the negotiations  which are  taking                 
  place  with  Klawock Native  group  involving a  contract to                 
  conduct Class 3 gaming activities.                                           
                                                                               
  Representative   Martin   asked   for  further   information                 
  regarding the Native  American court cases and  the gambling                 
  concern.  Mr.  Poshard stated that  there are several  cases                 
  existing although he could not speculate on the relationship                 
  between those cases  and the proposed legislation.   Federal                 
  law requires entering  into negotiations in good  faith with                 
  any recognized  Indian tribes  as lands  that could  conduct                 
  gaming.                                                                      
                                                                               
  Representative Martin asked  if the  State could prohibit  a                 
  group of people from gambling.   Mr. Poshard explained  that                 
  the only  basis for  allowing the  gaming to  take place  on                 
  Indian lands  is through  the Indian  Gaming Regulatory  Act                 
  which is federal law.   No other states which  have gambling                 
  prohibitions, have  also permitted  other types of  gambling                 
  following the agreement with an  Indian tribe on reservation                 
  land.                                                                        
                                                                               
  A roll call was taken on the MOTION to adopt Amendment #1.                   
                                                                               
       IN FAVOR:      Grussendorf, Kelly, Kohring, Therriault,                 
                      Brown, Foster, Hanley                                    
       OPPOSED:       Martin                                                   
                                                                               
                                                                               
                               18                                              
                                                                               
                                                                               
  Representatives Mulder, Navarre and Parnell were not present                 
  for the vote.                                                                
                                                                               
  The MOTION PASSED (7-1).                                                     
                                                                               
  Representative  Grussendorf why  the  number 300  passengers                 
  qualified  a  boat  as  a   "cruise"  ship  thus  permitting                 
  gambling.  Ms.  Burke stated that  it was the intent  of the                 
  legislation  to  limit the  gambling  to the  larger vessels                 
  which  offer   a  big   range  of   entertainment  services.                 
  Establishing  that  number  would  eliminate  a  small  boat                 
  claiming  status in order  to offer gambling.   She remarked                 
  that the language would close any possible loop holes.                       
                                                                               
  JERRY LUCKHAUPT,  ATTORNEY, LEGAL COUNSEL, DIVISION OF LEGAL                 
  SERVICES, stated that the operator of  the cruise ship would                 
  have to apply for the exemption as specified in Section 2 of                 
  the legislation.  The definition would exclude anyone who is                 
  not eligible to obtain  an exemption.  Each ship  would have                 
  to apply  for an  exemption separately  and each  ship could                 
  loose their exemption separately.                                            
                                                                               
  Representative Therriault MOVED  to report  CS HB 286  (FIN)                 
  out of  Committee with  individual recommendations  and with                 
  the accompanying fiscal note.  There  being NO OBJECTION, it                 
  was so ordered.                                                              
                                                                               
  CS  HB  286 (FIN)  was reported  out  of Committee  with "no                 
  recommendations" and with a fiscal note by the Department of                 
  Revenue dated 4/06/95.                                                       
                                                                               
  HOUSE BILL 78                                                                
                                                                               
       "An Act relating  to the  maximum amount of  assistance                 
       that may be  granted under the adult  public assistance                 
       program  and  the  program  of  aid  to  families  with                 
       dependent children; proposing  a special  demonstration                 
       project  within  the program  of  aid to  families with                 
       dependent  children  and  directing the  Department  of                 
       Health and  Social Services  to seek  waivers from  the                 
       federal government to implement the project."                           
                                                                               
  Co-Chair Hanley provided an  overview of HB 78.   He pointed                 
  out that the  intent of welfare reform is to  get people off                 
  welfare.    According  to  a  recent  survey  by  the  State                 
  Department  of Health  and Social  Services, 88%  of  Aid to                 
  Families with  Dependent Children  (AFDC) clients  in Alaska                 
  have  indicated  that  they  would rather  work  than  be on                 
  welfare.                                                                     
                                                                               
  Co-Chair  Hanley stated  that HB  78 would  provide for  the                 
  Department  of  Health and  Social Services  to apply  for a                 
                                                                               
                               19                                              
                                                                               
                                                                               
  series of waivers  from the usual provisions  governing AFDC                 
  programs.   A "workfare"  project would  be established  and                 
  would require able-bodied recipients who were not working at                 
  least 15 hours a  week to perform community service  or have                 
  their benefits reduced.                                                      
                                                                               
  Co-Chair Hanley concluded that the legislation would provide                 
  positive incentives  to work in  the form  of higher  income                 
  allowance  and higher vehicle allowance.  The costs of child                 
  care and  transportation necessary for participation  in the                 
  program would be covered  by the Department.  He  added that                 
  HB 78 would be an initial step towards breaking the cycle of                 
  dependence on welfare by rewarding hard work.                                
                                                                               
  Co-Chair  Hanley   provided  a  sectional  analysis  of  the                 
  legislation.  HB  78 amends existing  statutes for the  AFDC                 
  program.  The legislation would  authorize the Department to                 
  seek  federal approval  to  operate four  experimental  AFDC                 
  demonstration  projects  under  the   authority  of  Section                 
  1115(a) of the  Social Security  Act, which would  authorize                 
  imposition of certain modified AFDC eligibility criteria and                 
  requirements for participation in  a mandatory work  program                 
  for project  participants.   The project  would establish  a                 
  ratable reduction in  benefit payments for the  AFDC program                 
  statewide.                                                                   
                                                                               
  Co-Chair Hanley added,  under the waiver, a person  would be                 
  allowed to receive up to $200  hundred dollars for the first                 
  amount  of money made  and that, they would  be able to keep                 
  1/3 of the remainder made.   This would provide an incentive                 
  for people while also allowing them to improve their  status                 
  by  working and  at the  same time  would help the  State by                 
  reducing the amount of money spent.                                          
                                                                               
                                                                               
  (Tape Change, HFC 95-89, Side 1).                                            
                                                                               
  Co-Chair  Hanley continued  explaining each  section of  the                 
  bill.    He   reiterated  that   the  Department  would   be                 
  responsible  for  paying the  child  care costs  as  well as                 
  transportation  costs.   One  of  the fiscal  notes included                 
  would cover those expenses.                                                  
                                                                               
  JIM  NORDLUND,  DIRECTOR,  DIVISION  OF  PUBLIC  ASSISTANCE,                 
  DEPARTMENT  OF  HEALTH  AND  SOCIAL  SERVICES,  stated  that                 
  Section  #7  would  establish  an  AFDC  unemployed   parent                 
  demonstration   project,   to  assist   two-parent  families                 
  establish self-sufficiency within three years.                               
                                                                               
  He added that  Section #8 would establish  a self-employment                 
  demonstration project to assist AFDC recipients  in reducing                 
  their need for  benefits by allowing  them to establish  and                 
                                                                               
                               20                                              
                                                                               
                                                                               
  operate a microenterprise.   Co-Chair Hanley commented  that                 
  the current system prohibits participants from  saving money                 
  as it would place them over the asset limit.                                 
                                                                               
  Representative Grussendorf  spoke in  favor of  the proposed                 
  programs,  although  expressed  hesitation on  the  proposed                 
  program funding.    He communicated  that the money to  fund                 
  the  program would  be  taken from  those  already poor  and                 
  making them more poor  for making the experiment work.   Mr.                 
  Nordlund added, a  rateable reduction  of 1.7% amounting  to                 
  $13 dollars per month per one  adult and child unit would be                 
  added.   He stressed  that the current  system would operate                 
  the same, although there would be demonstration projects for                 
  certain selected persons receiving AFDC.  The auto exemption                 
  would not apply for all AFDC participants in the State.                      
                                                                               
  Co-Chair  Hanley commented  on Section  #9, the  "diversion"                 
  demonstration   project,  which   would  offer   short  term                 
  financial assistance  to job-ready AFDC applicants  in order                 
  to avoid long-term financial support.                                        
                                                                               
  Representative Martin asked  the intent  of the language  on                 
  Page 8, Line  18, "(2) disregard  up to  $500 each month  in                 
  nonbusiness  income   set  aside  for  the   development  or                 
  operation of the microenterprise;".                                          
                                                                               
  CURTIS LOMAS,  WELFARE REFORM  PROGRAM,  DIVISION OF  PUBLIC                 
  ASSISTANCE,  DEPARTMENT  OF  HEALTH   AND  SOCIAL  SERVICES,                 
  explained that  language provided  a provision  to allow  an                 
  individual to set aside income from some source other than a                 
  business as a way to capitalize.   The provision would allow                 
  the AFDC individual to  accrue up to $500 dollars  per month                 
  and place  into a  business capital  account with  a maximum                 
  limit of $10  thousand dollars.   That amount  would not  be                 
  considered as income.                                                        
                                                                               
  Representative  Martin  questioned  how  the Permanent  Fund                 
  Dividend  checks  and  share  holding  reimbursements  would                 
  affect  a   persons  qualifications  to   receiving  welfare                 
  subsidies.  Mr. Nordlund stated that  the bill would have no                 
  effect on any AFDC recipients  dividend check resulting from                 
  the "hold  harmless" provision  in current  law.   Mr. Lomas                 
  added, in terms of the PFD checks, the "hold harmless" would                 
  allow a  four month investment  limit.  Currently,  a person                 
  could set  aside  the  check  into  a  savings  account  and                 
  continue to have  their eligibility protected for up to four                 
  months.  If  that person  chose to place  that saved  amount                 
  into  a  microenterprise account,  a  limit would  no longer                 
  exist.                                                                       
                                                                               
  Mr. Nordlund added that there  would be administrative costs                 
  associated with the new demonstration projects.  In order to                 
                                                                               
                               21                                              
                                                                               
                                                                               
  move  forward  with  welfare  reform,  to move  people  from                 
  welfare to work, new ideas must be tried.   He applauded all                 
  demonstration projects found  in the bill stating  that they                 
  are good ideas and worthy of testing.                                        
                                                                               
  Representative  Martin  criticized  encouraging any  further                 
  exemptions  to  the welfare  program.   Mr.  Lomas clarified                 
  information regarding dividend payments received from Native                 
  corporations.  He stated  that as a part of  the 1988 Native                 
  Claim  Settlement  Act,  a  $2  thousand  dollar  limit  was                 
  established in federal law; this was not a state policy.  He                 
  added that  this  was not  an  exclusive Alaskan  policy  as                 
  referenced by Representative Martin.                                         
                                                                               
  KIRSTEN  MARTIN,  SELF,  PRISONERS  OF  WELFARE  WORKING  ON                 
  WINNING, ANCHORAGE, provided the Committee with a handout of                 
  the  monthly expenditures  for the  average AFDC  recipient.                 
  [Attachment #2].                                                             
                                                                               
  She asked  for further consideration  of the portion  of the                 
  legislation requiring  the under eighteen  welfare recipient                 
  to live with  the parent which  would require that  parent's                 
  income  to  be  the  determinant  in  deciding  the  medical                 
  expenses of the AFDC recipient.  She directed her concern to                 
  "breaking"  the grandparent's  "pocket  book".   Ms.  Martin                 
  requested   that  language   be  changed   to  exempt   that                 
  responsibility.                                                              
                                                                               
  Mr. Lomas instructed that federal law computes the income of                 
  a parent when the child is living with them.  He  added that                 
  the bill  could change  that  policy, however,  the way  the                 
  legislation  is  structured, there  is  a federal  option to                 
  require teens  to live  at home.   To  change that  language                 
  would depend on  the State of  Alaska adopting that  option.                 
  He added, that section  of the bill was not  a demonstration                 
  project, but was a portion of the bill which was an exercise                 
  as an option  of federal  law.  To  change that  "treatment"                 
  would require a waiver of that portion of the bill.                          
                                                                               
  Representative  Martin  interjected  that   supporting  that                 
  waiver would encourage  more teenage parents to  leave home.                 
  Representative  Martin  cited   the  responsibility  of  the                 
  biological father.  Ms. Martin discussed the lengthy time it                 
  takes for the  Child Support  Enforcement Agency to  enforce                 
  child support.   She  personally has waited  for five  years                 
  without  any child  support  compensation.   Co-Chair Hanley                 
  advised that there  is not  much flexibility within  current                 
  laws.                                                                        
                                                                               
  Representative Brown  asked what a cut to the benefits would                 
  mean to  someone receiving AFDC.   Ms. Martin  affirmed that                 
  she  was  fortunate in  that  she currently  received rental                 
                                                                               
                               22                                              
                                                                               
                                                                               
  assistance.  Without rental assistance,  she stated that she                 
  would most  likely lose  her housing.   Ms.  Martin stressed                 
  that  a  ($15)  fifteen  dollar cut  would  be  dramatic for                 
  someone  on such  a "tight" budget.   Ms.  Martin emphasized                 
  that  all shelters  and most  churches are full;  food banks                 
  have reached their limit.  She  stated that many people will                 
  loose their homes and the end product will be that many more                 
  children  will be  taken  by Division  of  Family and  Youth                 
  Services  (DFYS)  because  the  parents  will no  longer  be                 
  adequately able to  support the child's  needs.  She  added,                 
  currently  there  are  not  enough  foster parents  for  the                 
  children needing home placements.                                            
  Ms. Martin remarked that she was involved in creating a self                 
  sufficiency group with  other AFDC recipients through  local                 
  networking.    Some  of  the   items  targeted  through  the                 
  networking are  child care  and transportation  needs.   She                 
  agreed  that  there  are  failures  in the  present  system,                 
  although  there are many  AFDC recipients who  are trying to                 
  find ways to better themselves.                                              
                                                                               
  SHERRIE  GOLL, ALASKA  WOMEN'S LOBBY/KIDPAC,  JUNEAU, stated                 
  that HB 78 was clearly the most rational approach considered                 
  by the Legislature, pointing out that  it was full of things                 
  which removed disincentives for  families to become employed                 
  and stay employed.                                                           
                                                                               
  Ms. Goll  focused  on specific  areas  of concern  with  the                 
  proposed  legislation.   The  first  concern of  the Women's                 
  Lobby is the teen parent project.  Ms. Goll pointed out that                 
  Alaska has a high teen birth rate.  In 1993,  1189 teenagers                 
  had babies.  The total case load  of teen parents on AFDC is                 
  141.  She  noted that the vast majority of teenagers who are                 
  having children, are  living at home with  their parents and                 
  being supported.                                                             
                                                                               
  Ms. Goll applauded the exemptions for those with no parental                 
  support,  or  if the  home of  the  teenager was  an abusive                 
  situation and the  teen could not  live there.  She  pointed                 
  out that 70 recipients would be affected by the project.  In                 
  determining each case, investigation would be required.                      
                                                                               
  Ms. Goll emphasized that her main  concern would be with the                 
  health  care  needs  of  a   pregnant  teenager.    Pregnant                 
  teenagers have poor  health outcomes  which often mean  poor                 
  health outcomes for  their children.   Premature births  are                 
  much more common in teens, and most of the  low birth weight                 
  babies born prematurely will have health problems throughout                 
  their life.    Ms. Goll  emphasized  that prenatal  care  is                 
  important as is  good nutrition as  well as the delivery  of                 
  the child.                                                                   
                                                                               
  In  considering  the  parents  income,  the  minor  will  be                 
                                                                               
                               23                                              
                                                                               
                                                                               
  required  to live  at home  as a  condition  of eligibility.                 
  Unless the parent of the minor is also on  welfare, the teen                 
  would not be  eligible for any  assistance.  The concept  of                 
  holding the parents income harmless in  some way so that the                 
  teen could be eligible  for assistance necessary for her  to                 
  have a healthy baby needs to be reconsidered if that section                 
  remains in the bill.                                                         
                                                                               
  Ms. Goll  continued  addressing other  issues regarding  the                 
  personal responsibility  of the  "other" parent  of the  new                 
  baby.  In 60% of the cases where a teenage girl is pregnant,                 
  the father of that child is an  adult.  Ms. Goll recommended                 
  that the State provide active child support collection.  The                 
  other 40% of the fathers are  teen age boys.  The family  of                 
  the teenage girl is required  to take personal and financial                 
  responsibility for the  teenager and new baby,  although the                 
  same  responsibility  is  not  required  of the  teen  dad's                 
  family.    Ms. Goll  emphasized  that consideration  of that                 
  section of the bill be given deeper scrutiny or that section                 
  of the bill be  dropped.  Ms. Goll requested  that one other                 
  exemption be considered.                                                     
                                                                               
  (Tape Change, HFC 95-89, Side 2).                                            
                                                                               
  Ms. Goll stated that if a student is enrolled in a four year                 
  education program,  they should not  be required to  work 20                 
  hours a week as well.                                                        
                                                                               
  Ms. Goll spoke to the "unemployed"  parent project.  Until a                 
  few years ago, AFDC was only available to single parents who                 
  had dependent  children.   In 1988,  there was  a change  in                 
  federal  law, which  indicated  that law  broke-up families.                 
  The federal law mandated on  states that two parent families                 
  should be included  in welfare eligibility  when one of  the                 
  parents was unemployed.   She pointed out that at  that time                 
  case loads grew  significantly.  She noted that  by October,                 
  that mandate could be terminated.                                            
                                                                               
  Much of the JOBS training money currently is distributed for                 
  the two parent families.  Those are the  persons who will be                 
  greatly affected by the hundred hour rule.  That group could                 
  most  benefit from  the  limit and  could  live within  that                 
  restraint.                                                                   
                                                                               
  Ms.  Goll   opposed  the   rateable  reductions.     Without                 
  subsidized housing, of  which only 20%  percent of the  AFDC                 
  recipients qualify, an AFDC recipient could not make it with                 
  a  $15 dollar monthly  reduction.   She emphasized  that the                 
  costs of  welfare changes  should be  offset with  increased                 
  child support collections.                                                   
                                                                               
  Ms. Goll noted that major changes on the federal level would                 
                                                                               
                               24                                              
                                                                               
                                                                               
  be occurring by October.  She  added that these changes will                 
  probably block  grant the  funds and  will most  likely come                 
  with  less  restrictions,  rather  than  new  and  different                 
  restrictions.     However,  the  welfare   system  will   be                 
  redesigned.    She  requested that  the  Committee  consider                 
  putting off changes to the  welfare system until the federal                 
  changes have been  made.   Ms. Goll  suggested changing  the                 
  effective  dates   for  applying  for  the  "waivers"  until                 
  January, 1996.                                                               
                                                                               
  Ms. Goll  urged the  Committee to  consider off-setting  the                 
  cost of the programs other than on  the "backs of the poor".                 
   She pointed  out that action would hurt  14,000 children in                 
  Alaska.                                                                      
                                                                               
  HB 78 was HELD in Committee for further consideration.                       
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:55 P.M.                                           
                                                                               
                                                                               
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