Legislature(1995 - 1996)
01/31/1996 01:37 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 Program. 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 objection. 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 level. 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 principle. 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 changes. (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 reductions. (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 system. 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 provides. 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 p.m.