Legislature(1999 - 2000)

03/08/1999 01:35 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
    SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE                                                                               
                    March 8, 1999                                                                                               
                      1:35 p.m.                                                                                                 
MEMBERS PRESENT                                                                                                                 
Senator Tim Kelly, Chair                                                                                                        
Senator Jerry Ward                                                                                                              
Senator Lyman Hoffman                                                                                                           
MEMBERS ABSENT                                                                                                                  
Senator Jerry Mackie, Vice Chair                                                                                                
Senator Randy Phillips                                                                                                          
COMMITTEE CALENDAR                                                                                                              
SENATE JOINT RESOLUTION NO. 12                                                                                                  
Relating to new evaluation and selection criteria for military base                                                             
realignment and closure actions.                                                                                                
     -MOVED SJR 12 OUT OF COMMITTEE                                                                                             
SENATE BILL NO. 80                                                                                                              
"An Act relating to contracts for the provision of state public                                                                 
assistance to certain recipients in the state; providing for                                                                    
regional public assistance plans and programs in the state;                                                                     
relating to grants for Alaska tribal family assistance programs;                                                                
and providing for an effective date."                                                                                           
     -HEARD AND HELD                                                                                                            
PREVIOUS SENATE COMMITTEE ACTION                                                                                                
SJR 12 - No previous Senate action.                                                                                             
SB 80 - No previous Senate action.                                                                                              
WITNESS REGISTER                                                                                                                
Chris Nelson, Committee Aide                                                                                                    
Joint Committee on Military Bases                                                                                               
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified in support of SJR 12.                                                                            
Jim Nordlund, Director                                                                                                          
Division of Public Assistance                                                                                                   
Department of Health & Social Services                                                                                          
PO Box 110640                                                                                                                   
Juneau, AK  99811-0640                                                                                                          
POSITION STATEMENT:  Testified in support of the proposed committee                                                             
substitute for SB 80                                                                                                            
Terry Hoefferle, Executive Officer                                                                                              
Bristol Bay Native Association                                                                                                  
PO Box 310                                                                                                                      
Dillingham, AK  99576                                                                                                           
POSITION STATEMENT:  Testified in support of the proposed committee                                                             
substitute for SB 80                                                                                                            
Michael Walleri                                                                                                                 
Tanana Chiefs Conference                                                                                                        
2518 Riverview Drive                                                                                                            
Fairbanks, AK  99709                                                                                                            
POSITION STATEMENT:  Testified in support of the proposed committee                                                             
substitute for SB 80                                                                                                            
Don Shircel                                                                                                                     
Tanana Chiefs Conference                                                                                                        
2518 Riverview Drive                                                                                                            
Fairbanks, AK  99709                                                                                                            
POSITION STATEMENT:  Testified in support of the proposed committee                                                             
substitute for SB 80                                                                                                            
ACTION NARRATIVE                                                                                                                
TAPE 99-4, SIDE A                                                                                                               
Number 001                                                                                                                      
CHAIRMAN TIM KELLY called the Senate Community & Regional Affairs                                                               
Committee meeting to order at 1:35 p.m.  Present were Senators                                                                  
Ward, Hoffman, and Kelly, Chair.  The first order of business                                                                   
before the committee was SJR 12.                                                                                                
        SJR 12-MILITARY BASE REALIGNMENT/CLOSURE ACTIONS                                                                        
CHRIS NELSON, staff to the Joint Committee on Military Bases,                                                                   
stated the Secretary of Defense recently asked Congress to                                                                      
authorize two new rounds of Base Realignment and Closure (BRAC)                                                                 
actions to occur in 2001 and 2005.  SJR 12 asks Congress to                                                                     
consider a thorough review of the entire BRAC process. Previous                                                                 
BRAC evaluations overlooked the key modern strategic factor of                                                                  
total force considerations. Alaska military bases were shortchanged                                                             
during those evaluations.   SJR 12 asks Congress to form joint                                                                  
cross service study groups to look at power projection, joint                                                                   
training and operations, and to make recommendations to the new                                                                 
BRAC Commission to reflect the fact that the structure of military                                                              
forces has changed and that military bases must now move toward a                                                               
total force orientation.                                                                                                        
CHAIRMAN KELLY stated SJR 12 asks that the BRAC Commission use new                                                              
criteria to consider the proximity and cooperation between army and                                                             
air force bases.  The two combined bases have more strength than                                                                
individual bases situated in distant locations.  The new criteria                                                               
will better reflect the strength of Alaska's military bases, which                                                              
is their proximity, and deflect from their weakness, which is a                                                                 
higher operational cost.                                                                                                        
There being no further testimony, SENATOR WARD moved SJR 12 out of                                                              
committee with individual recommendations.  There being no                                                                      
objection, the motion carried.                                                                                                  
Number 107                                                                                                                      
        SB  80-PUB.ASSISTANCE:PROGRAMS/GRANTS/CONTRACTS                                                                         
CHAIRMAN KELLY announced the proposed CSSB 80(CRA), identified as                                                               
work draft 1-GS1011\D, had been circulated and would be addressed                                                               
today in lieu of the original bill. He further announced the                                                                    
committee would not take action on the legislation today, but would                                                             
begin the hearing process.  He added SB 80 was introduced by the                                                                
Senate Rules Committee at the request of the Governor.                                                                          
JIM NORDLUND, Director of the Division of Public Assistance,                                                                    
Department of Health and Social Services (DHSS), gave the following                                                             
overview of the proposed committee substitute. The 1996 federal                                                                 
welfare reform law enabled tribal non-profit organizations to                                                                   
administer regional welfare programs.  Each state receives a                                                                    
federal block grant: Alaska's block grant could be administered by                                                              
all or some of the thirteen Native organizations specifically named                                                             
in the federal legislation.  Prior to 1996, the Alaska Families                                                                 
with Dependent Children (AFDC) program was funded with a 50/50                                                                  
match of state and federal funds.  The 1996 federal law no longer                                                               
requires a 50 percent state match; it requires states to provide a                                                              
maintenance of effort (MOE) which, in Alaska, will equal 80 percent                                                             
of the state's AFDC match in FY 94.  States however, are not                                                                    
required to provide MOE's for Native-run programs.  CSSB 80(CRA)                                                                
allows state funds to be used to contribute to a Native non-profit                                                              
MR. NORDLUND noted that at present, the State has a grant agreement                                                             
with the Tanana Chiefs' Conference (TCC) to administer the Alaska                                                               
Temporary Assistance Program (ATAP) in the Interior region.  In                                                                 
1997, TCC submitted a proposal to the federal government to run a                                                               
Native program designed around a bill before the Legislature last                                                               
year allowing TCC to also receive State funds.  After the bill did                                                              
not pass, the Department of Law reviewed the situation and                                                                      
determined that if TCC's program is essentially the same as the                                                                 
State's program, DHSS could provide state funds to TCC under its                                                                
granting authority.  CSSB 80(CRA) goes one step further and allows                                                              
Native organizations, eligible for federal funds for welfare reform                                                             
programs, to also receive state funding to run customized welfare                                                               
programs that are comparable, but differ, from ATAP.  State funds                                                               
transferred to Native organizations would otherwise be used to                                                                  
serve the same clientele through a program administered by DHSS,                                                                
therefore no cost increase is associated with this legislation.                                                                 
CHAIRMAN KELLY asked whether CSSB 80(CRA) merely sets up a                                                                      
competing organization to provide services provided by DHSS.  MR.                                                               
NORDLUND replied it does not; it sets up locally administered,                                                                  
culturally relevant programs akin to school districts.                                                                          
CHAIRMAN KELLY asked if the program would serve Native recipients                                                               
only.  MR. NORDLUND explained the bill allows Native organizations                                                              
to serve non-Native clients in their regions as well.                                                                           
CHAIRMAN KELLY questioned why DHSS will continue to need employees                                                              
for these programs if Native organizations will be taking over                                                                  
those duties, and why the bill does not have a negative fiscal                                                                  
note.  MR. NORDLUND answered if many Native organizations decide to                                                             
participate, DHSS expects a reduction in its administrative staff,                                                              
but DHSS cannot predict at this time how many Native organizations                                                              
will take advantage of this opportunity.                                                                                        
Number 237                                                                                                                      
SENATOR WARD asked Mr. Nordlund to elaborate on the 13 non-profit                                                               
organizations. MR. NORDLUND clarified the federal welfare reform                                                                
law, at Senator Murkowski's request, specifically names the 12 non-                                                             
profit regional corporations and the Metlakatla community.                                                                      
SENATOR WARD asked whether this legislation prevents a certified                                                                
group with a non-profit branch from receiving funds.  MR. NORDLUND                                                              
replied the federal law allows only the 13 named organizations to                                                               
receive federal funds, therefore state funds could only be                                                                      
allocated to those organizations.                                                                                               
SENATOR WARD questioned whether the bill limits the amount of funds                                                             
used for administrative costs.  MR. NORDLUND answered the federal                                                               
law contains a 20 percent limit on federal funds but CSSB 80(CRA)                                                               
contains no limit on state funds.                                                                                               
Number 256                                                                                                                      
MR. TERRY HOEFFERLE, Executive Officer of the Bristol Bay Native                                                                
Association (BBNA), gave the following testimony via teleconference                                                             
from Dillingham.  Most of the 13 regional organizations were                                                                    
created over 30 years ago to work for resolution of Native land                                                                 
claims in Alaska.  The regional boundaries correspond to the                                                                    
regional for-profit ANCSA corporation boundaries.  The regional                                                                 
non-profit and for-profit organizations are very separate and                                                                   
distinct from each other.  The 12 non-profit organizations named in                                                             
the federal legislation are:  the Arctic Slope Native Association,                                                              
Manilaq, Kawerak, Doyon, the Association of Village Council                                                                     
Presidents, BBNA, Cook Inlet Tribal Council, Copper River Native                                                                
Association, Chugach, Kodiak Area Native Association, the Aleutian                                                              
Pribilof Islands Association, and Tlingit Haida Central Council.                                                                
Collectively, those organizations receive over $400 million                                                                     
annually to provide services from several federal agencies with                                                                 
separate program and reporting requirements.  The non-profit                                                                    
organizations also run several state-funded programs, such as                                                                   
Healthy Families.  BBNA's 1999 budget is $16 million; it runs 42                                                                
programs and provides services in 32 villages.  Of BBNA's 302                                                                   
employees, 234 are employed in the villages.  The local non-profit                                                              
organizations have experience in work training programs and                                                                     
knowledge of the people and resources of their regions.  With this                                                              
knowledge, they are better able to get people off of welfare and                                                                
back to work than a state agency.                                                                                               
Number 367                                                                                                                      
CHAIRMAN KELLY asked if funds were made available for the welfare                                                               
reform program in FY 97.  MR. NORDLUND replied the federal                                                                      
legislation was signed into law in August of 1996.  Many states                                                                 
implemented their welfare plans that same day and any Native                                                                    
organization could have submitted a plan to the federal government                                                              
for approval.  Alaska implemented its program on July 1, 1997.                                                                  
CHAIRMAN KELLY asked whether the Alaska Native non-profit                                                                       
organizations will be eligible for federal funds if CSSB 80(CRA)                                                                
does not pass.  MR. NORDLUND clarified they are already eligible to                                                             
receive federal funds.  TCC received funds directly from the                                                                    
federal government on October 1, 1998 but it is the only                                                                        
organization to do so at this time.                                                                                             
CHAIRMAN KELLY asked if the others are not as far advanced in the                                                               
design and application process as TCC.  MR. NORDLUND said that is                                                               
MR. HOEFFERLE added while BBNA is eligible to receive federal                                                                   
funds, it does not believe it is able to offer a program comparable                                                             
to the state's program with only half of the funding.  CSSB 80(CRA)                                                             
will allow the state to match the federal dollars.                                                                              
CHAIRMAN KELLY questioned why TCC is receiving state funds.  MR.                                                                
NORDLUND clarified TCC had to amend its original plan to make it                                                                
identical to the state's program in order to receive state funds.                                                               
CSSB 80(CRA) will allow DHSS to fund programs that are comparable,                                                              
but not identical, to the state's program.  TCC originally wanted                                                               
to reduce benefits by five percent and use the five percent to fund                                                             
drug and alcohol treatment programs for clients.  Because that                                                                  
would depart from the state's program, TCC had to modify its plan                                                               
and remove that provision.                                                                                                      
Number 397                                                                                                                      
CHAIRMAN KELLY asked if the state's funding amount is a direct                                                                  
50/50 match of federal funds.  MR. NORDLUND said it was prior to                                                                
1996, but the 1996 federal law requires the state to contribute 80                                                              
percent of its FY 94 general fund amount.  This year, the program                                                               
funds consist of about 60 percent federal funds and 40 percent                                                                  
state funds.                                                                                                                    
SENATOR WARD questioned whether the TCC welfare reform program has                                                              
been audited and whether any public hearings have been held to                                                                  
measure public opinion about TCC's delivery of services.  MR.                                                                   
NORDLUND noted TCC's program began operating January 1, 1999,                                                                   
therefore no audits or hearings have occurred.                                                                                  
SENATOR WARD questioned whether DHSS has a mechanism in place to                                                                
deal with complaints about the delivery of services. MR. NORDLUND                                                               
replied TCC is a grantee of the State therefore DHSS auditing                                                                   
requirements apply.  DHSS also requires a dual appeal process:                                                                  
individuals first appeal directly to TCC; if unsatisfied with the                                                               
resolution they may then appeal to DHSS.                                                                                        
SENATOR WARD asked if anyone has appealed, and whether clients are                                                              
aware of the appeal process.  MR. NORDLUND said all clients are                                                                 
notified of their right of appeal.                                                                                              
Number 429                                                                                                                      
SENATOR HOFFMAN asked Mr. Nordlund to elaborate on the state's                                                                  
fixed funding level.  MR. NORDLUND explained the 1996 federal law                                                               
changed the funding mechanism from a formula-based entitlement to                                                               
a block grant.  Each states' block grant is limited to 80 percent                                                               
of the amount it spent for state welfare programs in FY 94.                                                                     
SENATOR HOFFMAN asked if the amount of the block grant remains                                                                  
constant whether the state contracts with a tribal entity or                                                                    
administers its own program.  MR. NORDLUND said it does, however                                                                
the state amount is based upon the tribal entity's proportion of                                                                
the caseload in a given year, and it will be proportional to the                                                                
general fund amount appropriated by the Legislature each year.                                                                  
CHAIRMAN KELLY asked Mr. Nordlund to provide the section of the                                                                 
federal law that relates to the FY 94 funding level.                                                                            
Number 456                                                                                                                      
MICHAEL WALLERI, TCC, gave the following testimony via                                                                          
teleconference from Fairbanks.  TCC supports CSSB 80(CRA) but plans                                                             
to propose two amendments.  TCC is a regional tribal consortium,                                                                
operating social service programs since 1972.  TCC assumed                                                                      
operation of the Bureau of Indian Affairs (BIA) general assistance                                                              
program in 1986, and developed the model which eventually became a                                                              
national program known as the Tribal Work Incentive Program (TWIP).                                                             
Under a transition agreement with DHSS, TCC jointly operated its                                                                
welfare reform program with DHSS from October 1, 1998 until January                                                             
1, 1999, at which time TCC took over.  TCC now serves 450 Native                                                                
families in 37 federally recognized tribes.  Its geographical area                                                              
is the largest area served in the United States.  Under TCC's new                                                               
program, 35 percent of clients served in rural communities are now                                                              
employed (a 35 percent increase).  One stop service centers have                                                                
been created in all 39 rural communities and in Fairbanks.  The                                                                 
State envisioned a system of one-stop service centers in its plan                                                               
but never implemented it.  To date, no TCC clients have filed                                                                   
appeals internally, or with DHSS.                                                                                               
MR. WALLERI said TCC supports CSSB 80(CRA) because the legislation                                                              
will enable regional non-profit organizations to further improve                                                                
the system.  TCC amended its original plan to meet the substantial                                                              
similarity rule identified by the Department of Law, a standard                                                                 
more stringent than the federal law requiring Native programs to be                                                             
comparable, not identical.  TCC wanted to implement not only the 5                                                              
percent benefit reduction, but also mandatory alcohol and substance                                                             
abuse evaluations for recipients, stronger sanctions for non-                                                                   
compliance with the work incentive requirement,  and incentives for                                                             
parents to promote both local health screening of children and                                                                  
parental participation in parent-teacher conferences.  TCC would                                                                
also like to provide a $50 incentive for cooperation with child                                                                 
support enforcement issues. Enactment of CSSB 80(CRA) will allow                                                                
TCC to implement those provisions.                                                                                              
MR. WALLERI discussed the changes made in the proposed committee                                                                
substitute.  The time line for the notice of retrocession was                                                                   
changed from 180 to 120 days to be consistent with the federal time                                                             
line.  A six month start-up period was included which is consistent                                                             
with the federal law.  He noted TCC supports Section 7, which                                                                   
allows TCC to continue to implement its current program with the                                                                
two year grant it received from DHSS.                                                                                           
MR. WALLERI described TCC's first proposed amendment. Subsections                                                               
A - F on page 6, lines 3-22, contain the comparability standards                                                                
for the tribal and Alaska programs.  TCC  prefers that Subsection                                                               
(E) be substituted with the comparability standard negotiated with                                                              
DHSS Commissioner Karen Perdue.  Under the federal program, tribal                                                              
programs are to receive child support assignments.  TCC and the                                                                 
State of Alaska are currently working to amend federal policy to                                                                
allow agreements about how those assignments are handled.  The                                                                  
amended federal policy will allow a tribal-state agreement to                                                                   
govern the distribution of child support assignments.                                                                           
MR. WALLERI noted TCC's second proposed amendment would add a new                                                               
section to read:                                                                                                                
     The receipts of assistance from programs operated under                                                                    
     grant or contract pursuant to AS 47.27.071 or AS                                                                           
     47.27.072 shall not be the basis for denial of services                                                                    
     provided by the department that are not funded from                                                                        
     appropriations for the state public assistance program                                                                     
     administered under this chapter.                                                                                           
He explained the section would clarify that families eligible for                                                               
assistance from regional non-profit organizations would not                                                                     
automatically be denied services from the state for programs that                                                               
are not included in the non-profits' contracts.  He suggested                                                                   
including a non-discrimination clause to prevent incidents similar                                                              
to those that occurred during the transition phase.                                                                             
TAPE 99-4, SIDE B                                                                                                               
CHAIRMAN KELLY asked for an example of a benefit that a TCC                                                                     
assistance recipient might apply for from the State.                                                                            
DON SHIRCEL, Director of Family Services, TCC, indicated child care                                                             
assistance or work orientation services were denied to TCC                                                                      
recipients because of a misunderstanding.  State programs operated                                                              
under the assumption that recipients of assistance from tribal                                                                  
programs were no longer eligible for State services.                                                                            
MR. WALLERI stated other examples of state assistance include food                                                              
stamps and Medicaid. Those programs are funded through different                                                                
federal programs and can only be administered by the State.                                                                     
Number 561                                                                                                                      
SENATOR WARD asked if TCC would be opposed to a provision                                                                       
prohibiting disbursement of state funds to a non-profit                                                                         
organization controlled by a for-profit organization.                                                                           
MR. WALLERI replied he was unsure who that provision would apply                                                                
to, but that it would not apply to TCC.  TCC's non-profit                                                                       
organization is controlled by a separate, independently-elected                                                                 
board, comprised of, and elected by, the village councils in the 37                                                             
tribal communities.                                                                                                             
CHAIRMAN KELLY questioned whether any of the 13 Native non-profit                                                               
organizations are controlled by the 13 for-profit corporations.                                                                 
MR. HOEFFERLE stated he believes, with the exception of the Cook                                                                
Inlet Tribal Council, all of the regional non-profit organizations                                                              
are controlled by boards of directors whose members are appointed                                                               
by the village councils in the communities they represent.  He                                                                  
thought the Cook Inlet Tribal Council may have a slightly different                                                             
SENATOR WARD stated he believes the Cook Inlet Tribal Council is                                                                
controlled by its for-profit arm.  He suggested the committee                                                                   
pursue that question before allowing state funds to be disbursed to                                                             
SENATOR WARD again asked if any recipients of TCC's services have                                                               
appealed to TCC about the delivery of those services.  MR. SHIRCEL                                                              
replied TCC program staff have received many calls from                                                                         
individuals, some irate that they are required to work 20 hours per                                                             
week to receive welfare benefits.  However, no formal appeals have                                                              
been filed.  SENATOR WARD said he has also received calls, some                                                                 
identical to those described by Mr. Shircel.                                                                                    
Number 515                                                                                                                      
CHAIRMAN KELLY indicated this legislation will allow the state to                                                               
contract some services out, yet the fiscal note contains no                                                                     
assurance that a savings will result.  He asked if the bill will                                                                
create a new general fund expense.  MR. NORDLUND said it will not.                                                              
Existing funds from the Division of Public Assistance will be                                                                   
transferred to another component, entitled the Native Family                                                                    
Assistance Fund.  If some of the larger organizations, such as                                                                  
Tlingit and Haida Central Council, apply to run their own programs,                                                             
the Division of Public Assistance's administrative abilities would                                                              
be reduced.                                                                                                                     
CHAIRMAN KELLY cautioned it will be like pulling teeth to get DHSS                                                              
to admit it does not need the same number of administrative                                                                     
employees.  MR. NORDLUND said he appreciated the Chairman's                                                                     
concern, but he pointed out the unique funding mechanism should                                                                 
assure the committee that no new costs will arise.  The federal                                                                 
block grant amount will remain static, as well as the state's                                                                   
share. He clarified the federal portion will increase by 2+ percent                                                             
each year because Alaska, as well as 16 other states, are                                                                       
considered "high population states."                                                                                            
SENATOR WARD suggested if the federal government gave the state $10                                                             
which was handed to TCC, and the state did not incur any                                                                        
administrative costs in that transfer, the state would save money,                                                              
therefore, the state's savings on administrative costs could be                                                                 
added to the amount given to TCC.                                                                                               
MR. NORDLUND replied that is what will happen.  DHSS is                                                                         
transferring not only the benefit dollars, but the administrative                                                               
dollars as well.  SENATOR WARD asked Mr. Nordlund to provide a                                                                  
model of that process for committee members.                                                                                    
MR. WALLERI clarified federal funding does not increase based on                                                                
population increases or incentive payments.  In determining the                                                                 
state's share of administrative costs, two line items in the state                                                              
budget are used.  The first is ATAP, the second is the state's                                                                  
administrative costs.  The total share of those two line items                                                                  
passed to TCC through a grant of ATAP benefit money.  That amount                                                               
was capped in a remarkable agreement requiring all of that money to                                                             
be paid directly to beneficiaries.  TCC must use other funds to pay                                                             
administrative costs.  Such an agreement is remarkable in that 100                                                              
percent of state funds must be used to pay ATAP beneficiaries.                                                                  
CHAIRMAN KELLY asked if the 13 organizations are designated in CSSB
80 (CRA) by name.  MR. NORDLUND said they are by reference to the                                                               
federal law.                                                                                                                    
There being no further testimony, CHAIRMAN KELLY announced CSSB
80(CRA) would be scheduled for a second hearing.  He adjourned the                                                              
meeting at 2:37 p.m.                                                                                                            

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