Legislature(1999 - 2000)
03/08/1999 01:35 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 program. 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 correct. 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 arrangement. 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 it. 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.