Legislature(1995 - 1996)

01/31/1996 01:37 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE                         
                        January 31, 1996                                       
                           1:37 p.m.                                           
  MEMBERS PRESENT                                                              
 Senator John Torgerson, Chairman                                              
 Senator Randy Phillips, Vice Chairman                                         
 Senator Tim Kelly                                                             
 Senator Fred Zharoff                                                          
 Senator Lyman Hoffman                                                         
  MEMBERS ABSENT                                                               
  COMMITTEE CALENDAR                                                           
 EXECUTIVE ORDER NO. 93                                                        
 Transferring responsibility for Alaska Regional Economic Assistance           
 SENATE BILL NO. 206                                                           
 "An Act relating to welfare reform by establishing the Alaska                 
 Family Independence Program; repealing the aid to families with               
 dependent children and job opportunity and basic skills programs;             
 relating to an exemption to Alaska Wage and Hour Act for certain              
 work activities of the Alaska Family Independence Program; relating           
 to the duty to support children of minor parents; relating to                 
 certain licenses and applications for a license for persons who are           
 not in substantial compliance with orders, judgments, or payment              
 schedules for child support; relating to an exemption to the state            
 procurement code for certain services for the general relief                  
 program and Alaska Family Independence Program; relating to                   
 eligibility for day care benefits administered by the Department of           
 Community and Regional Affairs; authorizing the Department of                 
 Health and Social Services to operate a public assistance program             
 consistent with the Alaska Family Independence Program under                  
 federal waivers and providing certain immunity from liability for             
 activities of that program; amending Alaska Rule of Civil Procedure           
 90.3; and providing for an effective date."                                   
  PREVIOUS SENATE COMMITTEE ACTION                                             
 EO 93 - No previous action to record.                                         
 SB 206 - No previous action to record.                                        
  WITNESS REGISTER                                                             
 Lamar Cotten, Deputy Commissioner                                             
 Department of Community & Regional Affairs                                    
 P.O. Box 112100                                                               
 Juneau, AK 99811-2100                                                         
  POSITION STATEMENT:   Testified in support of EO 93                          
 Jay Livey, Deputy Commissioner                                                
 Department of Health & Social Services                                        
 P.O. Box 110601                                                               
 Juneau, AK 99811-0601                                                         
  POSITION STATEMENT:   Offered information on SB 206                          
 Jim Nordlund, Director                                                        
 Division of Public Assistance                                                 
 Department of Health & Social Services                                        
 P.O. Box 110640                                                               
 Juneau, AK 99811-0640                                                         
  POSITION STATEMENT:   Presented overview on SB 206                           
 Curtis Lomas                                                                  
 Welfare Reform Program                                                        
 Division of Public Assistance                                                 
 Department of Health & Social Services                                        
 P.O. Box 110640                                                               
 Juneau, AK 99811-0640                                                         
  POSITION STATEMENT:   Responded to questions on SB 206                       
 Shannon O'Fallon, Assistant Attorney General                                  
 Human Services Section                                                        
 Civil Division                                                                
 Department of Law                                                             
 P.O. Box 110300                                                               
 Juneau, AK 99811-0300                                                         
  POSITION STATEMENT:   Offered information on SB 206                          
 Glenda Straube, Director                                                      
 Child Support Enforcement Division                                            
 Department of Revenue                                                         
 550 W. 7th Ave., Suite 312                                                    
 Anchorage, AK 99501                                                           
  POSITION STATEMENT:   Offered information on SB 206                          
  ACTION NARRATIVE                                                             
 TAPE 96-1, SIDE A                                                             
 Number 001                                                                    
  CHAIRMAN TORGERSON  called the Senate Community & Regional Affairs           
 Committee meeting to order at 1:37 p.m., and introduced Executive             
 Order No. 93 as the first order of business.                                  
  LAMAR COTTEN , Deputy Commissioner, Department of Community &                
 Regional Affairs (DCRA), related that during the past summer both             
 his department and the Department of Commerce & Economic                      
 Development (DCED) were given the assignment to review both of the            
 organizations internally and also with respect to how they                    
 coordinate.  As a result of that review, it was decided that it               
 would be more appropriate for the ARDORS program (Alaska Regional             
 Development Organizations) to be shifted from DCED to DCRA, a                 
 compelling reason being that the needs of the program were largely            
 located with those ARDORS in rural Alaska.  DCRA has offices in               
 Fairbanks, Dillingham, Bethel, Kotzebue and Nome, and it was felt             
 that the program could be better integrated into existing programs            
 at a cost savings to the state.  He pointed out that this doesn't             
 preclude involvement by DCED or other departments with the program,           
 but that DCRA would take the lead and the administrative                      
 responsibilities with the program.                                            
 Number 060                                                                    
  SENATOR TORGERSON  directed attention to a letter from the Alaska            
 ARDOR Association stating their support for the change.  He also              
 stated that it is not necessary to have a motion to pass an                   
 executive order out of committee unless there is a stated                     
                     SB 206 WELFARE REFORM                                    
  SENATOR TORGERSON  introduced SB 206 as the next order of business.          
 He said the department would be giving an overall section-by-                 
 section review of the legislation and that another hearing would be           
 scheduled in the future to take up the parts of the bill that                 
 relate to local government.  The following teleconference sites               
 were participating in the meeting in a listen-only mode:                      
 Anchorage, Bethel, Cordova, Dillingham, Fairbanks, Glennallen,                
 Homer, Kenai, Kodiak, Kotzebue, Ketchikan, Mat-Su and Tok.                    
  JAY LIVEY , Deputy Commissioner, Department of Health & Social               
 Services, explained that the Aid to Families with Dependent                   
 Children program (AFDC) is a joint federal/state program and any              
 changes made to AFDC in Washington, D.C. will greatly affect what             
 is done in Alaska.                                                            
 The stand alone welfare reform bill was sent to President Clinton             
 and it was vetoed, primarily for reasons of lack of money in child            
 care.  There are still similar welfare reform proposals that are              
 tied up in various budget reconciliation strategies, as well as a             
 welfare reform bill that is being promoted by conservative                    
 Democrats and moderate Republicans.  That bill still may be adopted           
 and go to the President.  Mr. Livey said it is a very volatile                
 issue and there is still a good chance that federal reform will               
 occur this year.                                                              
 Mr. Livey said SB 206 allows Alaska to move forward with reform               
 regardless of what happens in Washington, D.C., by providing the              
 framework for welfare reform in Alaska if federal reform were to              
 pass.  If federal reform does not pass, it provides the state with            
 the ability to write waivers and to implement portions of the bill            
 and go forward with welfare reform.                                           
 Number 101                                                                    
  SENATOR TORGERSON  inquired what would be required if it becomes             
 necessary to write waivers.                                                   
  JIM NORDLUND , Director, Division of Public Assistance, answered             
 that his division is taking a close look at what it would take to             
 implement the governor's welfare reform plan through a waiver                 
 process.  They do know that there is a fast track process that                
 President Clinton made available to the states last fall, but they            
 are still in the process of investigating just how all of the                 
 pieces would come together and the timing of those pieces.  He                
 agreed to provide information to the committee that would identify            
 which sections of the bill would necessitate waivers and which                
 sections would not.                                                           
 Mr. Nordlund explained that SB 206 is a piece of an overall                   
 comprehensive welfare reform plan.  It is an inter-agency                     
 collaborative process between many departments in state government.           
 In developing SB 206, besides that inter-agency input, they had the           
 blueprint for welfare reform that was developed a year ago by the             
 Governor and the Administration; they held a series of community              
 meetings and call-ins; and they looked at welfare reforms that have           
 been tried in other states and incorporated some things that have             
 been working in other states, as well as incorporating parts of               
 last year's legislation introduced by the Governor and                        
 Representative Hanley and Senator Green.                                      
 A principle that went into the legislation and is carried through             
 in the legislation and the budget is that in order to receive                 
 welfare in the future, individuals are going to basically have to             
 work for it, either through community work activities or by moving            
 into paid employment.  He added that there will be individuals who            
 will not be able to work and they do allow for those exemptions.              
 A major part of the new emphasis on work is the need to provide               
 adequate job training and child care for individuals so that they             
 can move into the work force, stay in the work force and then be              
 able to stay permanently off of AFDC.                                         
 The legislation also places a five-year limit on benefits.  This              
 will place a greater responsibility on all of the agencies                    
 represented to make sure that when that five-year limit runs out              
 the individuals have been given the opportunity to go into the work           
 force to be able to provide for their own self- sufficiency.                  
 Number 290                                                                    
  SENATOR KELLY  asked if the bill makes changes to benefits and  JIM          
 NORDLUND  responded that the bill carries forward the level of                
 benefits that the state pays right now.  Generally, their approach            
 to dealing with the amount of state money that goes into AFDC and             
 their efforts to try to reduce that is by reducing the caseload  --           
 taking the number of people who are currently on AFDC and moving              
 them into the workforce, thereby reducing the budget that's                   
 necessary to fund benefits.  He added that in this year's budget              
 request, the department is asking for reinvestment of dollars that            
 they have already saved due to lower caseloads; they are asking for           
 that money to be reinvested back into child care and job training.            
  SENATOR KELLY  asked if there is any kind of automatic increase on           
 the cost of benefits or if they are established by statute.   JIM             
 NORDLUND  replied that the benefit level is established by statute            
 so it necessitates a statutory change to increase the benefit                 
 Number 320                                                                    
  SENATOR TORGERSON  asked how many people are currently in the                
 system.   JIM NORDLUND  responded that there are approximately 12,500         
 families on AFDC, which translates into about 37,000 individuals,             
 24,000 of which are children.                                                 
 Number 330                                                                    
 Continuing his overview,  JIM NORDLUND  said another principle of the         
 legislation is to maintain a safety net for the poor.   He said               
 they recognize that AFDC primarily, right now, is a cash assistance           
 program for needy individuals in the state and they don't                     
 anticipate that poverty is going to go away.  There will be                   
 citizens in Alaska, especially children, who are going to continue            
 to need help and this program still maintains that general                    
 Another principle is the notion of promoting parental                         
 responsibility, both in terms of child support, as well as taking             
 on the responsibility to do more to move off of public assistance             
 and into self-sufficiency.                                                    
 Administratively, the division is taking a new direction.  When               
 leases come up for Division of Public Assistance offices, they are            
 taking that opportunity to share space with the Employment Security           
 offices around the state.  Also, they are looking towards changing            
 the role of their individual workers; eligibility technicians will            
 become case managers and will work with clients and provide them              
 with the necessary tools for them to move off of public assistance            
 and into a job.                                                               
 Mr. Nordlund outlined the following features included in SB 206:              
 (1)  The legislation repeals AFDC statutes and the JOBS program               
      entirely.  It creates a new program called the Alaska Family             
      Independence Program.  The bill is designed to take advantage            
      of what is anticipated will happen with federal welfare                  
 (2)  The Child Support Enforcement provisions in the bill give the            
      Child Support Agency additional tools to collect payments from           
     delinquent obligors, primarily through the threat of                      
     revocation of occupational and drivers licenses.                          
 (3)  It establishes limits on assistance and achieves cost                    
 (4)  It emphasizes work and job development through reinvestment of           
     benefit savings.                                                          
 (5)  It maintains a safety net for low income families.                       
 (6)  It involves communities in achieving meaningful reform of the            
 Mr. Nordlund discussed the equalizing of benefit distribution.                
 Currently, there can be two families in the state in exactly the              
 same situation, but one family may receive subsidized housing or              
 free housing and the other family doesn't; however, they receive              
 the same cash benefit.  It is proposed to equalize those benefits             
 through regulation, which will mean an appropriation level savings            
 to the state that the department plans to reinvest into providing             
 additional incentives for people to go to work.                               
 Number 520                                                                    
  SENATOR KELLY  asked if this means they are not going to give the            
 rent payment to the people who are living in subsidized housing.              
  CURTIS LOMAS , Division of Public Assistance, explained that the way         
 AFDC payments are currently calculated under law, housing costs are           
 simply not taken into consideration.  The number of people in the             
 family and their income are the two main factors that go into the             
 calculation.  Although they are still developing the details, in              
 effect, what they propose to do is to take a family's housing costs           
 into account when they calculate the payment for their overall                
 living expenses.                                                              
  TAPE 96-1, SIDE B                                                            
 Number 001                                                                    
 There was brief discussion on food banks in the state, and  SENATOR           
 TORGERSON  asked that the committee be provided with a list of where          
 these food banks are located.                                                 
  Number 025                                                                   
 JIM NORDLUND  pointed out that one thing that was heard through               
 their community meeting process this past summer was that local               
 communities would like to play a greater role in the administration           
 of the AFDC program or the Alaska Family Independence Program, if             
 SB 206 passes.  The legislation provides the authority for local              
 organizations, nonprofits, as well as local communities to                    
 administer parts of the program.  Because there is still a lot of             
 uncertainty surrounding welfare reform, this idea has not really              
 been developed yet.  He added that it is the intent of the Governor           
 and Commissioner Perdue to divest some of the services that are               
 currently provided by state government to local organizations in              
 the administration of the program.                                            
 Mr. Nordlund said the bill also asks the state to cooperate with              
 Native organizations in terms of the administration of the new                
 program.  In the federal law, which is anticipated to pass, Native            
 organizations will be allowed to contract directly with the federal           
 government for provisions of services that the state currently                
 Number 060                                                                    
  JAY LIVEY  related that federal welfare reform proposals contain a           
 provision that would allow Indian tribes to provide welfare                   
 services directly to their tribal members.  In Alaska, each village           
 is a tribe, so in Alaska, the term "Indian tribe" is defined as               
 meaning a regional corporation.  Therefore, there would not be 200            
 different AFDC programs, there would be at a maximum of 12.                   
  SENATOR KELLY  asked if there was any reason why all 12 regional             
 corporations  wouldn't take advantage of that provision.   JAY LIVEY          
 answered that he thinks most tribes want to do it, and when the               
 committee takes public testimony on the legislation, he believes              
 that some of the tribes will be discussing that.  He added that the           
 considerations are that the administrative responsibilities are               
 still fairly fierce in terms of meeting the reporting requirements            
 of federal law, even under the new block grant proposal.  When the            
 cost of setting up administration versus the number of recipients,            
 etc., are considered, some tribes may just not be willing to take             
 that on.   SENATOR KELLY  commented that he could not imagine them            
 not wanting that to happen because this would mean jobs that could            
 be handled by the tribal members.   JIM NORDLUND  added that the idea         
 needs a lot more development, and one of his concerns is that just            
 the administrative infrastructure that it takes to do eligibility             
 alone is very costly and some of the smaller organizations may not            
 have enough recipients to pay for an eligibility system.                      
  SENATOR KELLY  asked if the provision is Native-specific only.               
  CURTIS LOMAS  answered that the way the bill reads is that if a              
 corporation takes one of these block grants, their obligation is to           
 serve all Alaska Native and American Indian people who live within            
 the boundaries of the ANCSA region, regardless of their tribal                
 affiliation.  He added that the American Indian population in the             
 AFDC caseload represents approximately one percent of the total.              
  SENATOR KELLY  asked if there is going to be a finite number that            
 each of these 12 corporations are responsible for dollar wise.   JAY          
 LIVEY  answered that the way the current federal law is proposed,             
 the state would receive a block grant that is the amount of money             
 that was received for AFDC in 1994.  However, if for some reason              
 the number of people that required benefits happened to increase,             
 there would be more people to serve with the same amount of money.            
  SENATOR KELLY'S  concern is the 12 potential organizations that              
 might not feel the same pressures to come in at a budget that the             
 department comes in at and then will need more money.  He asked               
 where the checks and balances are against that happening.   JIM               
 NORDLUND  said he thought the checks and balances would be the same           
 that the state would face and that is that there is basically no              
 more money.  If they come to the department seeking more money and            
 if it is given to them, it has got to come out of the pot of the              
 rest of the people that AFDC is supposed to be taking care of.   JAY          
 LIVEY  pointed out that there is no requirement in the federal law            
 that the state provide a match to the Indian tribes should they               
 take on responsibility for their members, but the department                  
 believes that there should be some level of general fund                      
 appropriation to help that tribe provide services because they are            
 essentially taking cases away from the state and lowering the                 
 state's obligation.                                                           
 Number 200                                                                    
  SENATOR TORGERSON  commented that there had been discussion earlier          
 about other nonprofits, as well as local governments, being                   
 eligible to administer the state's portion of this program.  The              
 question is how much competition are we actually trying to create             
 and how are these dollars going to be tracked through whatever it             
 is that we're trying to accomplish.                                           
 Number 300                                                                    
  SENATOR ZHAROFF  commented that corporations that he has dealt with          
 have very limited resources and most of them are dependent upon               
 either state or federal dollars or private contributions.  He said            
 they have been going through staff reductions, cutting expenses,              
 etc., just like everybody else.                                               
 Number 330                                                                    
  JAY LIVEY  said the tribal representatives have said their concern           
 has been that the AFDC program, as currently configured, is not a             
 program that is particularly beneficial to rural Alaska.  By                  
 providing some kind of regional control, and through that more                
 local control, the program could be designed to be more beneficial            
 for rural Alaska in terms of job creation and job and work                    
 activities that are more related to subsistence kinds of lifestyle            
 and those kinds of issues.                                                    
 Number 410                                                                    
  SENATOR ZHAROFF  asked if the state would have to provide matching           
 money.   JAY LIVEY  said he assumed the Native organizations that             
 would want to do this would need to get the state complement to               
 what they get from the federal government in order to run an                  
 effective program.  However, he also pointed out that the federal             
 law says that the state currently has to match up to 80 percent of            
 the federal contribution, but it doesn't say anything about the               
 state having to make a match if a Native organization decides to              
 pursue this.                                                                  
 Number 454                                                                    
  SENATOR KELLY  asked how much the state's obligation would be in             
 matching general fund dollars.   JAY LIVEY  responded it would be 80          
 percent of what the general fund match was in FY 94, which would be           
 80 percent of approximately $68 million.                                      
  CURTIS LOMAS  said the state basically is not required to                    
 participate in this program at all.  The 80 percent match is a                
 condition of the state getting a block grant, and, if the state is            
 not willing to provide that level of state funding, then we                   
 basically don't have the federal block grant.  However, the Native            
 portion could continue because that relationship would be directly            
 between the federal government and the tribal government.                     
 Number 500                                                                    
  SENATOR TORGERSON  said he is not opposed to the Native                      
 organizations doing this, but he is concerned about the widely                
 disparate programs because the funding level available to the                 
 Native organizations and to the state would be vastly different.              
 There is no definition of comparable services for Native or non               
 Native.   JIM NORDLUND  pointed out that there is the provision in            
 the federal bill that requires comparability of programs or                   
 comparability of benefits.                                                    
  SENATOR TORGERSON  asked if there are federal matching dollars for           
 the jobs training program.   JIM NORDLUND  replied that there isn't           
 a federal share.  The department is requesting the same level of              
 appropriation this year for AFDC, $130 million, but because they              
 have seen a reduction in caseload, they anticipate paying $122                
 million in benefits and they are asking the Legislature to put the            
 difference of $8 million into job training and child care.                    
  SENATOR ZHAROFF  asked how this whole program fits into communities          
 like Kodiak that experience seasonal unemployment because of the              
 way the allocations are handled in the offshore fisheries.   JIM              
 NORDLUND  responded that one of the things in the bill that deals             
 with the seasonality of employment in Alaska is to make reductions            
 to two-parent families in the summer when work is available to                
 those families.                                                               
  TAPE 96-2, SIDE A                                                            
 Number 035                                                                    
  SENATOR TORGERSON  turned the discussion to local government                 
 involvement as possibly being the contractor to administer part of            
 the program.  He said a lot of the concern he has comes back to the           
 authority of local governments to even get involved administering             
 any part of this bill, and whether they have the statutory                    
 authority to do so.  The three elements that would be eligible to             
 contract with the department to administer the program would be the           
 regional corporations, the local governments and other nonprofits.            
 JAY LIVEY  said the way the bill is currently written, it                     
 essentially permits the department to contract for various pieces             
 of the program with nonprofit organizations, or tribes, or                    
 municipalities.  It doesn't mandate that any of those entities                
 become involved if they don't wish to.  He pointed out that the               
 current program has contracts with nonprofit organizations, and               
 most of those contracts have to do with providing various kinds of            
 jobs-related services.                                                        
 Number 060                                                                    
  SHANNON O'FALLON , Assistant Attorney General, Human Services                
 Section, Department of Law, said AS 29.35.010 talks about the                 
 general powers of municipalities, but she agreed with Senator                 
 Torgerson's concern that Title 29 should be amended to ensure that            
 first and second class boroughs have the authority to contract with           
 the state to do this.                                                         
  SENATOR TORGERSON  pointed out that the amendment should include             
 second class cities, third class cities, etc.                                 
 Number 175                                                                    
  GLENDA STRAUBE , Director, Child Support Division, Department of             
 Revenue, said one of the things that is very clear in the federal             
 welfare reform is a tougher approach to child support enforcement             
 in relationship to public assistance.  One way to increase the                
 collections is through what is called the occupational drivers                
 license bill, and this section is within the Governor's bill.  When           
 an individual applies for an occupational license or goes in for a            
 renewal, the Child Support Division will be matching up with                  
 Occupational Licensing their list of people who are not in                    
 compliance on their child support payments.  Those individuals who            
 are not in compliance will be issued a temporary license and will             
 then have to work out a payment plan for back child support.  A               
 similar process will apply for drivers licenses.  The legislation             
 also contains a provision which provides a heightened                         
 responsibility for grandparents.                                              
 Number 156                                                                    
  SENATOR TORGERSON  said the occupational license provision makes             
 sense to him, but the drivers license provision is a pretty far               
 reaching change in policy, and he asked if this is something that             
 is done in other states.   GLENDA STRAUBE  clarified that the                 
 occupational license provision also includes the drivers license.             
 A year ago approximately 17 other states had this provision.  She             
 pointed out that the federal welfare reform bill is even stricter             
 than this legislation, and although the provision in this bill is             
 far reaching, it recognizes the fact that people really need to               
 support their children.                                                       
 Number 194                                                                    
 There being no further testimony on SB 206, SENATOR TORGERSON said            
 the legislation would be scheduled for another committee hearing at           
 which time the committee will focus in on sections relating to                
 local government issues.  He then adjourned the meeting at 3:26               

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