Legislature(1995 - 1996)
04/13/1996 02:55 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 13, 1996
2:55 p.m.
TAPES
SFC-96, #78, Side 1 and 2
SFC-96, #79, Side 1 (000-575)
SFC-96, #79, Side 2 (575-326)
CALL TO ORDER
Senator Rick Halford, Co-chairman, convened the meeting at
approximately 2:55 p.m.
PRESENT
All committee members (Co-chairmen Halford and Frank and
Senators Donley, Phillips, Rieger, Sharp, and Zharoff) were
present.
ALSO ATTENDING: Senator Green; Senator Taylor; Commissioner
Karen Perdue, Dept. of Health and Social Services; Laurie
Otto, Deputy Attorney General, Criminal Division, Dept. of
Law; Kristen Bomengen, Assistant Attorney General, Human
Services Section; Dept. of Law; Art Snowden, Administrative
Director, Alaska Court System; James W. Elliott, Acting
Director, School Finance, Dept. of Education; Eddy Jeans,
School Foundation, School Finance, Dept. of Education; Curt
Lomas, Welfare Reform Program, Division of Public
Assistance, Dept. of Health and Social Services; Shirley
Dean, Juneau Office, Child Support Enforcement Division,
Dept. of Revenue; and aides to committee members and other
members of the legislature.
SUMMARY INFORMATION
SB 70 - PUBLIC SCHOOL FOUNDATION PROGRAM
Discussion was had with Senator Taylor, Dr.
Elliott, and Eddy Jeans. A draft CSSB 70, version
"W" was adopted. An amendment by Senator Rieger
to delete Sec. 16 from the draft was adopted.
Amendment by Senator Donley relating to pupil
transportation was adopted. A further amendment
by Senator Donley relating to unhoused students
was adopted as amended. CSSB 70 (Fin) was then
REPORTED OUT of committee with a $29,266.5 fiscal
note from the Dept. of Education (K-12 Foundation)
and a $1,992.0 from the Dept. of Education (Pupil
Transportation).
SB 98 - PERSONAL RESPONSIBILITY ACT
Continued review of a draft CSSB 98, version "N,"
(pages 13 through 51) was had with Senator Green,
Commissioner Perdue, Curt Lomas, Shirley Dean, and
Kristen Bomengen. A packet of amendments was
distributed by Senator Green and the transitional
assistance amendment was discussed. Areas of
concern relating to responsibilities of
grandparents, Alaska Native Organizations' Family
Programs, transitional assistance, and adverse
action against the driver's license of delinquent
obligors were flagged for further discussion at a
work session at 12:00 noon, April 14, 1996. The
bill was held in committee for consideration at a
meeting scheduled for 3:00 p.m., April 14, 1996.
SB 320 - NEW SUPERIOR COURT JUDGE FOR DILLINGHAM
Discussion was had with Art Snowden and Laurie
Otto. The bill was then REPORTED OUT of committee
with a $226.8 fiscal note from the Court System.
SENATE BILL NO. 70
An Act relating to the public school foundation
program; and providing for an effective date.
Co-chairman Halford directed that SB 70 be brought on for
discussion. Senator Randy Phillips MOVED for adoption of a
work draft CSSB 70 (9-LS0652\W, Ford, 4/12/96). SENATOR
ROBIN TAYLOR came forward to speak to the bill. He
explained that an earlier draft contained a mandatory mill
equivalency paid by each community for its school system
before the district received state funding for additional
education needs. The rate was set at 5 mills. That has
been adjusted to 4.5 mills. In doing that, a major
percentage of communities statewide are "dropped off because
they're all paying more than that."
The Senator directed attention to a spread sheet (copy on
file in the original Senate Finance Committee file for SB
70) and cited Anchorage, Fairbanks, Juneau, and MatSu as
examples of areas that would receive increased funding while
a $9 million reduction in state general funds is effected.
This occurs due to a shifting of funds from communities that
can readily afford to pay the full cost of eduction from the
existing tax base. Funds that, in the past, have flowed to
these communities would no longer be needed and would be
available for distribution to communities that have taxed
themselves over and above the mill rate, to provide basic
education. The theory behind the legislation is "share the
pain equally across the state."
Senator Taylor next referenced the existing cap on the
formula and noted that many tax-based communities are at cap
and may exceed it this year.
The work draft formula is driven by need to provide for a
final solution to the problem of equitable distribution.
The draft formula changes existing statutes and brings the
state into compliance with federal law.
A further provision deducts 100 percent of the eligible
federal impact aid from basic need in determining the amount
of state aid. Senator Taylor referenced indications from
districts that 100 percent provides no incentive to complete
paperwork for PL 874 moneys. He suggested the committee
might wish to "give them a fudge factor of a couple percent
just for filling out the paperwork."
Directing attention to Section 3 of the draft, Senator
Taylor explained that before the state would be required to
contribute educational costs to a community, the locality is
mandated to contribute the 4.5 mill minimum. If 4.5
generates more moneys than the community is spending on
education, the excess flows to the state fund for
distribution to communities taxing themselves at a higher
rate. Communities are allowed to contribute up to 2.5 mills
of additional local support above the mandatory 4.5.
Contribution beyond the mandatory level qualifies a
community to receive supplemental or excess moneys. Many
communities are now taxing over 6 mills. Section 4
establishes the pool for excess funds generated by the 4.5
mills.
Section 5 changes the number of students required to
establish a funding community from 8 to 10.
Section 6 reduces the "trigger" on the hold harmless
provision from the current 10 percent decrease in
instructional unit to a 5 percent decrease. That only comes
into effect in situations of declining enrollments.
Section 7 cleans up the formula for determining unit count.
It reflects the 8 to 10 student change made in Section 5.
Section 8 contains a single-site fix to cure the ongoing
problem.
Section 10 removes gifted and talented children from the
special education funding formula. Senator Taylor cited
abuses of the formula whereby certain districts have
distorted numbers to gain additional funds. The new formula
contains a limit of 4.5 percent of a school district's
enrollment.
Section 11 relates to bilingual education. Senator Taylor
cited abuses in this area as well. Reductions are included
in the formula established for provision of the
instructional unit count per bilingual student. Reduction
is 50 percent.
Section 14 changes the date at which student counts occur.
The historic deadline has been October 15. That date has
been moved to November 20. Section 15 provides flexibility
in allowing districts to determine when they wish to conduct
the count (sometime between October 15 and November 20).
Section 16 contains a "mini-hold harmless" provision which
gives the commissioner discretion to allow a school district
caught between Sections 14 and 15 to show good cause why the
district should not be adversely impacted by the manner in
which the count was conducted.
Section 17 allows for promulgation of regulations.
Sections 18 and 19 provide effective dates.
Senator Taylor acknowledged that the proposed bill reflects
a legislative mandate forcing localities to prioritize and
dedicate a portion of the tax base to education. It
requires every community to dedicate 4.5 mills. The state
will then "match the rest." He further remarked:
If 4.5 mills happens to generate $40 some million
dollars out of the North Slope, and they only need
$15 or $20 for education, then those poorer
districts, in this state, that aren't that wealthy
ought to have the benefit of those funds so that
their kids will also receive a decent education.
The purpose of the legislation is to avoid the equity
problem being forced upon Alaska by the federal government's
formula.
Discussion followed between Senator Rieger and Senator
Taylor concerning how numbers set forth on the spread sheet
were calculated and what they include.
Senator Rieger requested further explanation of Section 16.
Senator Taylor said it was included "only for purposes of
providing a transition for the change in time period in
which you count students." Senator Rieger noted that his
reading of the language indicates that in any given year
(1999 was used as an example) a district could opt to report
membership numbers from the earlier year (1998). Senator
Taylor concurred in that understanding, saying that the
district could "fall back to the previous year, but only if
you have good cause for doing so." Senator Rieger advised
that it amounts to a "100 percent hold harmless for a year
on top of the 5 percent hold harmless . . . . elsewhere in
the bill." Senator Taylor deferred further comment to staff
from the Dept. of Education.
In response to a request for a summary of changes between
the current draft and earlier versions of the bill, Senator
Taylor noted:
1. A drop from a mandated 5 mill equivalency to 4.5.
2. The 50 percent reduction in bilingual
3. Establishment of 4.5 percent of total district ADM
as the amount eligible for gifted programs.
Senator Zharoff asked how the legislation would work in
areas with no tax base. Senator Taylor noted that those
areas are presently receiving PL 874 moneys. Those moneys
are contributed by the federal government in lieu of taxes.
Under the proposed bill, those districts would contribute
"that full amount of their PL 874" moneys as their local
contribution and "still share in exactly the same dollar
revenues that they were getting before." If a community has
a tax base but elects not to tax it, the proposed bill "may
very well require them to impose a 4.5 percent tax."
EDDY JEANS, Project Assistant, School Foundation, School
Finance, Dept. of Education, came before committee. He
explained that the proposed formula computes a statewide
average assessed value per student. For REAAs, the
statewide average has been adjusted by 2.5 mills. That 2.5
mills is then multiplied by the ADM to determine the state
share to REAAs. For a city/borough district, there is an
additional computation whereby the district's individual
assessed value per student is compared to the statewide
average. That produces a proportion that is applied to the
statewide average per student and multiplied by the
district's ADM to determine the local share. The state
share is computed based on the statewide average times the
ADM.
Operation of the above formulas (per distributed spread
sheets) was discussed using both communities with and
without tax bases as examples. Further review of existing
district funding compared to the new formula followed.
Senator Taylor noted legislative need to address area cost
differentials in the future.
Co-chairman Frank expressed concern regarding potential for
additional state expenditures driven by increased local
contributions. Mr. Jeans said that would not happen since
the state share is based on the average of the statewide
value per student. Mr. Jeans directed attention to a spread
sheet dealing with local effort requirements and
supplemental equalization funding. He voiced his reading of
the bill to be that the additional 2.5 mills above the 4.5
is required. The 2.5 mills is based on the statewide
average. Further discussion followed using Anchorage as an
example.
In response to a further question from Co-chairman Frank,
Mr. Jeans explained that the proposed bill would result in
two formulae working together within the umbrella of the
foundation formula. One reflects basic foundation aid
computed on instructional units, times area cost
differential, times the unit value of 61. From that the
state would subtract 4.5 mills of required local
contribution and 100 percent of impact aid funds to arrive
at the basic state allocation. The supplemental
equalization formula would then be applied to determine
additional state aid. Co-chairman Frank voiced his
understanding that greater contribution by a local
government would not "cost the state more on a per share
basis." Senator Taylor concurred in that understanding,
saying: "A local government cannot drive more money out of
the state by spending more." Mr. Jeans noted that the
existing formula cap of 23 percent of basic need remains in
effect.
Further review of spread sheets followed using numbers for
the Juneau-Douglas School District as an example. Senator
Taylor noted that the bill would result in "a significant
tax reduction for almost every major community in the
state." The Governor's legislation "gives more money to the
people who weren't taxing themselves." The Senator stressed
that the proposed formula change would "take care of the
inequality problem for a lot of years to come . . . ."
Co-chairman Frank noted general discussion of the impact to
the state treasury resulting from application of the
proposed bill to the North Slope. He referenced existing
tax caps under state law and asked how they impact the North
Slope Borough and oil and gas property taxes. Senator
Taylor said discussions indicated impact of "about $29
million over and above local effort right now." Co-chairman
Halford voiced his understanding that the North Slope is at
the cap and would have to cut its budget in half.
Further discussion followed regarding the statutory cap as
well as bonded indebtedness. Senator Taylor remarked:
Whatever percentage of their 30 mills that they are
currently dedicating to paying off that huge bond debt
they've got up there . . . shouldn't qualify as a
portion of the total 30 mill cap so as to prevent them
from having the revenues to pay for their own
education.
Additional discussion of North Slope taxes and state oil and
gas taxes followed.
END: SFC-96, #78, Side 1
BEGIN: SFC-96, #78, Side 2
Co-chairman Halford quoted from a May, 1995, Dept. of
Revenue analysis of the 5 mill version of the bill:
The state revenue loss based on 43.56 (the offset) for
the North Slope Borough would have been $34,321,249.
However, the Borough is already at the 30 mill
limitation provided for in Title 29. Since no
additional property tax revenue is available, the
Borough operating budget must be reduced over 50% to
cover the additional educational funding.
[The foregoing analysis was set forth on a May 3, 1995,
fiscal note for SB 70 from the Dept. of Revenue.]
Discussion of the differential between mills applied to
bonded indebtedness and general operations followed.
Senator Taylor again questioned whether the North Slope was
utilizing a majority of its tax revenues to repay bonded
indebtedness. Co-chairman Halford stressed that the cap is
complicated, and there may be other considerations. He
suggested that the "cap may only be the cap in the
deductibility against the statewide ad valorem tax."
Senator Taylor remarked that if impact on the North Slope
would be as dramatic as indicated, perhaps phase-in
provisions would be necessary.
Additional discussion of tax applications within the North
Slope Borough followed.
A comparison of funding under current law versus the
proposed bill followed using Pelican as an example.
Senator Zharoff next inquired concerning changes in funding
for bilingual programs. Mr. Jeans said the department had
not yet had an opportunity to run numbers. He then
instructed members regarding how computations would be made.
Mr. Jeans noted that it appears rural districts would lose,
and urban districts would gain, under the proposed change.
He acknowledged that he would not be sure of that until
calculations are made. Senator Zharoff asked if the intent
was to "get away from bilingual as you get further up the
grades." Mr. Jeans voiced his understanding of intent to
not reward districts for classifying "children in a higher
weight category." A uniform funding level should be
provided for all bilingual students.
Co-chairman Halford again referenced the tax situation in
the North Slope Borough. He advised of a formula based on a
limitation on assessment. There is no limitation on tax as
it applies to debt service. The borough budget (including
debt service) for 9,000 to 12,000 people totals
approximately $225 million. Of that, $165.6 million is
slated for debt service.
Senator Zharoff asked how the proposed bill compares to
state board of education efforts to restructure the
foundation formula. JAMES ELLIOTT, Acting Director, School
Finance, Dept. of Education, noted that the board has
considered quotas on "some of the categorical weights" as
well as a "block plan." The proposed bill is radically
different.
Senator Zharoff asked if the area differential would remain
applicable under the proposed draft. Senator Taylor
responded that the bill does not deal with the differential.
It is a separate matter.
Co-chairman Frank asked if the bill solves the disparity
problem. Mr. Jeans remarked that the draft enhances
district ability to contribute local revenue by the increase
from 4 to 4.5. If districts now at cap continue to
increase, that may cause a problem is disparity. However,
the supplemental equalization provides additional revenue
outside the instructional units. That will increase the
unit value and may offset disparity.
Senator Rieger MOVED for deletion of Section 16 (the
transitional section involving the prior-year count) from
the draft. He referenced discussion indicating that the
section essentially provides a second hold harmless on top
of the 5 percent hold harmless within Section 6. Senator
Zharoff OBJECTED, advising that he was unsure what the
impact of removal might be. Co-chairman Halford called for a
show of hands. The MOTION CARRIED on a vote of 5 to 1, and
Section 16 was DELETED.
Senator Phillips MOVED that CSSB 70 (Fin) pass from
committee. Senator Zharoff OBJECTED. Senator Donley
advised that he wished to offer several amendments. He
explained that the first relates to pupil transportation
while the second relates to unhoused students. He then
formally MOVED for adoption of the AMENDMENT dealing with
transportation. Co-chairman Halford called for a show of
hands. The AMENDMENT was ADOPTED on a vote of 4 to 3. (Co-
chairman Frank and Senators Sharp and Zharoff were opposed.)
Senator Donley then MOVED for adoption of an AMENDMENT
relating to assessment of unhoused students in portable
units. The intent is that the department not count these
students as housed when it makes it assessment of where
construction needs to occur. Co-chairman Halford inquired
regarding floor discussion of the 10,000 limit. He voiced
need to count unhoused students in all locations, regardless
of the size of the district, and noted a preference for
removal of the 10,000 floor. Senator Phillips suggested
that "and the district has a population greater than 10,000"
be removed from the amendment. Co-chairman Halford raised
concern that the word "temporary" may become a major term
within regulatory definition and suggested that "temporary
relocatable facilities" might be more direct. Senator
Donley formally MOVED to insert "relocatable" and delete
language relating to district populations greater than
10,000 so that underlined language within the amendment
would read:
for purposes of this subparagraph, students are
considered unhoused if the students attend school in
temporary relocatable facilities;
Co-chairman Halford called for objections to the AMENDMENT
to the AMENDMENT. No objection having been raised, the
AMENDMENT to the AMENDMENT was ADOPTED. Co-chairman Halford
next called for a show of hands on adoption of the
AMENDMENT. The AMENDMENT was ADOPTED on a unanimous vote of
7 to 0.
Senator Randy Phillips renewed his MOTION for passage of
CSSB 70 (Fin). Senator Zharoff again raised OBJECTION. Co-
chairman Halford called for a show of hands, and CSSB 70
(FIN) was REPORTED OUT of committee with two fiscal notes
from the Dept. of Education (a $29,266.5 note for K-12
foundation and a $1,992.0 note for pupil transportation).
Co-chairman Halford and Senators Donley, Phillips, and Sharp
signed the committee report with a "do pass" recommendation.
Co-chairman Frank and Senator Rieger signed "no
recommendation." Senator Zharoff signed "do not pass."
SENATE BILL NO. 320
An Act increasing the number of superior court judges
designated for the Third Judicial District to provide
an additional superior court judge at Dillingham.
Co-chairman Halford directed that SB 320 be brought on for
discussion. ART SNOWDEN, Administrative Director, Alaska
Court System, came before committee. He explained that the
new judge would fill a hole in the Dillingham/Naknek area.
Citizens in the area have raised concern that many cases are
"pled out" because of lack of prosecutorial and defense
assets. Necessity for judges to travel from Anchorage to
preside at Dillingham depletes ability to cover the
Anchorage caseload.
LAURIE OTTO, Deputy Attorney General, Criminal Division,
Dept. of Law, next came before committee. She voiced
support for the legislation and directed attention to
correspondence citing the basis for support. She noted that
much of the problem associated with prosecutions in the
region is inability to "get adequate court time to process
the cases within the time limit set in state speedy trial
rules."
In response to a question from Senator Sharp, Ms. Otto said
that the position would be new to the region. Facilities (a
court building in Dillingham staffed by clerks) are in
place. There is a public defender in the area, but district
attorneys serve the region out of the Anchorage office. One
district attorney dedicates full time to Dillingham. If the
judge is placed in Dillingham, the Anchorage position would
move to the region as well.
Senator Rieger MOVED for passage of SB 320 with individual
recommendations and the accompanying fiscal note. No
objection having been raised, SB 320 was REPORTED OUT of
committee with a $226.8 fiscal note from the Court System.
All members signed the committee report with a "do pass"
recommendation with the exception of Senator Phillips who
signed "no recommendation."
SENATE BILL NO. 98
An Act making changes related to the aid to families
with dependent children program, the Medicaid program,
the general relief assistance program, and the adult
public assistance program; directing the Department of
Health and Social Services to apply to the federal
government for waivers to implement the changes where
necessary; relating to eligibility for permanent fund
dividends of certain individuals who receive state
assistance, to notice requirements applicable to the
dividend program; and providing for an effective date.
Co-chairman Halford directed that CSSB 98, Version "N,"
dated 4/10/96, be again brought before committee for
continued sectional review. SENATOR LYDA GREEN directed
attention to Page 13 of the draft and commenced review of
"Disqualifying Conditions."
[Tape malfunction. There is no recording for this portion
of the meeting. Minutes reflect transcription of shorthand
notes.]
Co-chairman Halford referenced language at Page 15, line 19,
relating to "a crime that is classified as a felony" and
asked what would happen if serious class-A misdemeanors were
added. CURT LOMAS, Welfare Reform Program, Division of
Public Assistance, Dept. of Health and Social Services,
explained that the wording was precisely taken from federal
welfare reform language. He said he did not know whether
the state could be more restrictive.
Senator Green next noted subparagraphs (1), (2), and (3) at
Page 16, lines 17 through 19, and advised that they relate
to fraud. She further pointed to application process
requirements set forth on Pages 16 and 17.
Directing attention to Page 18, subsection (3)(c), Senator
Green advised that provisions relate to seasonal workers.
Co-chairman Halford referenced the list of utilities within
subsection (B), suggested that a telephone does not appear
to be as basic as other services listed within the section,
and suggested that it be flagged.
[Tape malfunction was corrected at this point. Remaining
minutes reflect transcription of the tape recording of the
meeting.]
Referencing Page 19, Senator Green explained that the
diversion program is the same as HB 78 and the Governor's
bill. In the proposed draft, however, it has been
restricted to adults. Minors had previously been included.
The program allows individuals to receive a lump-sum payment
to ensure that they will not be "going on to the full
benefit program."
Language relating to assistance to minors at Page 20, line
20, was taken from HB 78.
The family self-sufficiency plan set forth on Page 21,
commencing with line 11, will be part of the intake and
evaluation of those coming into the program. It will
involve a plan with benchmarks, time limits, conditions that
must be in place, and how compliance will be achieved.
Page 22 language relating to participation in work
activities was taken directly from federal law. The
emphasis here is on work.
Provisions at Page 23 reflect existing law.
Directing attention to Page 24 language concerning agency
collaboration, Senator Green advised of instances when the
legislature had need of more information than is currently
provided. She further noted that temporary positions
involved in the effort are exempt. Interagency efforts are
also to be devoted to job training and development.
Senator Green next referenced Page 25 and noted that a
proposed Amendment would remove Federal-State Cooperation
language commencing at line 6. It is considered to be "too
loose." It gives the department too much authority.
Referencing the Alaska Native Organizations' Family
Assistance Program provisions commencing at Page 25, line
31, Senator Green advised that the commissioner of the Dept.
of Health and Social Services would speak to the issue.
Senator Green indicated that the provisions may ultimately
not be needed.
The Senator referenced provisions for establishment of an
emergency account per language at Page 26 and advised that
inclusion should be a finance committee decision. Language
relates to provisions under the new reform act whereby the
department may receive additional funds from the federal
government, and those funds may not all be spent within a
particular fiscal year. The department will speak to this
issue.
Page 27 language, relating to Appeals and Dispute
Resolution, raises questions regarding department adoption
of regulations establishing the informal dispute resolution
process. Senator Green advised that she did not know
whether a procedure is presently in place for hearings or if
it is necessary to adopt a new process. This area requires
clarification.
Senator Green advised of a proposed amendment which will
relate to Sanctions and Recovery of Costs at Page 27.
Provisions deal both with recipients who refuse to cooperate
as well as those who receive benefits to which they are not
entitled. Civil action is available via subsection (d).
Definitions set forth at Page 28 include terms not
previously defined. Senator Green referenced subsection (7)
and noted drafter inclusion of the word "unemancipated." A
proposed amendment would remove the word.
Senator Green next advised of numerous technical changes
involved in changing the name of the Aid to Families with
Dependent Children to the Alaska Family Independence
Program.
Senator Green referenced Section 13, Page 30, and explained
that the language was provided by the Child Support
Enforcement Division.
END: SFC-96, #78, Side 2
BEGIN: SFC-96, #79, Side 1
The interest rate presently charged in computation of
arrearages is 12 percent. The division has asked that it be
reduced to 6 percent. Senator Randy Phillips noted need for
closer review of the request. Senator Green read from
backup material indicating that, for many years, the 12
percent rate was reasonable given the prevailing rate at
that time. However, a rate of 6 percent per year better
reflects existing rates.
Directing attention to Page 31, Section 15, Senator Green
noted language from HB 78 relating to participation by both
sets of grandparents in support of a child born to minor
parents. The responsibility remains in effect until one of
the parents reaches the age of 18. The parents of the minor
mother are more often involved in support of the infant.
This language would provide some balance to that support.
Section 24, at Page 33, was also requested by CSED. It
relates to correction of clerical and administrative errors
by the agency. Correction of miscalculations of arrearages
is presently very cumbersome.
Section 25 language relating to adverse action against a
delinquent obligor's occupational license was in both HB 78
and the Governor's bill. It provides for issue of a
temporary license in instances of arrearages. A process is
established by which the obligor may work with the agency to
develop a plan for repayment. Provisions cover occupational
and driver licenses. This effort would require a network
between CSED and licensing agencies. The bill specifies a
150-day window in which the obligor must either pay the
arrearage, establish a payment plan, or request an
administrative hearing. Senator Phillips questioned CSED
ability to take on this additional task when the agency has
yet to accomplish its primary purpose. Senator Rieger asked
if the provision is required by federal reform. Senator
Green responded, "This and more is in federal law--in the
federal reform act."
Section 26 incorporates contractors that administer grants
within bill provisions.
Section 30, Page 46, relates to day-care benefits. The only
substantive change is removal of the word "net" (line 6) to
bring language into conformity with federal law.
Senator Green next directed attention to Page 47, line 23,
and noted addition of the following:
or a federal program designated as the successor to the
aide to families with dependent children program.
Referencing Page 49, line 13, Senator Green noted need to
add "and legislature" following the word "governor."
Co-chairman Halford asked if provisions within Sec. 35, at
Page 47, reflect federal law. Senator Green responded
affirmatively. Curt Lomas again came before committee. He
explained that current federal law contains a requirement
for the language. All versions of the personal
responsibility act, including those being considered by
Congress, have a requirement that the state establish rules
which restrict the use of public assistance case information
to purposes specifically related to program administration.
Co-chairman Halford asked if availability of the information
to Legislative Budget and Audit and individual legislators
would violate federal law. Mr. Lomas said Legislative
Budget and Audit currently conducts program audits. He said
he was unfamiliar with what level of access the division has
at the present time.
Referencing statutory citations slated for repeal per Page
48, Co-chairman Halford requested a list of repealers.
Senator Green remarked that the existing AFDC program and
the Jobs program (AS 47.25) constitute the majority of the
citations. She said she would subsequently confirm that
repeals are limited to those programs.
In concluding her review, Senator Green referenced effective
dates listed on Page 51. She noted language within Section
54 allowing for enaction following federal law changes, if
new federal law is forthcoming.
Co-chairman Halford took exception to portions of the bill
relating to Alaska Native Organizations' Family Assistance
areas, suggesting that, "That's a governmental function that
will create Indian country." Senator Green responded,
"There's no opposition to removing that section . . . ."
Co-chairman Halford added that there are benefits in some of
the federal provisions. He said there was nothing wrong
with using the Indian Self-Determination Act to get local
entities--the closest entities to the people--to make
decisions. The question is,
If any of the entities . . . on the list . . . are
now recognized as tribes, and we authorize them to
provide a governmental function . . . defined by a
service area, we're walking into a trap on the
next issue down that road.
As long as the twelve entities listed at Page 26 are
incorporated under the laws of the state of Alaska and do
not have a tribal identity, they are probably the best
entities to do the work. Co-chairman Halford voiced his
understanding that federal law provides benefits to the
state at a higher rate of reimbursement for having these
entities perform the functions. Senator Green subsequently
advised that the entities listed at Page 26 are all
incorporated under the laws of the state. Language within
the bill was also reworded to delete the reference to
tribes. The Senator further noted provisions within
subsection (c) which require the listed Alaska Native
organizations to waive any claim to sovereign immunity.
Co-chairman Halford voiced his understanding that listed
entities would be providing services to all residents of
their areas, both Native and non-Native. A reading of the
bill indicates that service would only be provided to a
"racially defined constituency." KAREN PERDUE,
Commissioner, Dept. of Health and Social Services, explained
that under present language, the organization would write a
plan and apply for the federal portion of the AFDC program.
Subsection (b) would allow the state to participate in that
planning. Funds received from the federal government would
cover only racially defined members. That would not
prohibit the state from contracting with the organization to
provide other services.
Further discussion of operation of the program followed
between Commissioner Perdue and Co-chairman Halford. The
Co-chairman questioned legislative ability to appropriate to
a racially defined function. He suggested that the
separation of the program and service of two classes of
recipients would cause problems. Commissioner Perdue
concurred in concern. She said that when the Governor
expressed his views on the issue, he said it was important
that program benefits be comparable. That does not mean
they have to be exactly the same. The intent is to get
local entities to design programs that work in their
communities. Co-chairman Halford reiterated concern that
the proposed arrangement would create a situation where the
program at Bethel would provide a different benefit to a
Bethel Native than it does to a Bethel non-Native. That
appears to raise equal protection arguments the court system
will not tolerate. Commissioner Perdue pointed to ongoing
WIC program administration by the Tanana Chiefs Conference
on a non-discriminatory basis.
Senator Sharp referenced language within subsection (b),
Page 26, and voiced his belief that, as written, it allows
for a racially defined program. He suggested that removal
of "Alaska Native" within the subsection might cure the
problem. Commissioner Perdue voiced her desire to create
programs that work locally and do not pit one person against
another.
The commissioner stressed need for the department to work
with listed organizations. She expressed concern over
potential for a tribe to write its own plan, apply for the
federal share, and receive the funding. Co-chairman Halford
voiced his understanding that the state share provides the
incentive to work cooperatively with the department. The
commissioner concurred.
Further discussion followed between Co-chairman Frank and
the commissioner regarding operations of the federal block
grant.
Co-chairman Halford voiced additional concern regarding
broad language and authorities as well as the tethering of
occupational licenses to support payments, because of CSED's
past performance.
Co-chairman Halford announced his intention to continue
review of the bill at 3:00 p.m. the following afternoon. He
then asked that the sponsor and department representatives
speak to the packet of proposed amendments.
Senator Green directed attention to the first amendment and
noted that it relates to transitional assistance.
Commissioner Perdue explained that the department presently
authorizes 12 months of child care after an individual
leaves AFDC. Testimony at statewide hearings indicated that
people would leave welfare much faster if they had medical
and child care. The amendment would extend periods of
transitional assistance to 24 months for day care. It would
also extend Medicaid medical care for children for an
additional year. The cost of the Medicaid extension for the
first partial year would be $150.0 in general funds to be
matched by federal dollars. Co-chairman Halford voiced his
understanding that Medicaid would cover the parent for 12
months and the child for 24. The commissioner concurred and
added that the child care portion would cost $700.0 for the
first full year.
END: SFC-96, #79, Side 1
BEGIN: SFC-96, #79, Side 2
Further discussion ensued regarding changes to the program
intended to discourage individuals from going on welfare for
a period of time in order to obtain extended medical
benefits.
Additional discussion followed concerning the voucher system
for child care and calculation of costs per child. Mr.
Lomas advised of a typical cost of $450 a month.
In response to a question from Co-chairman Halford regarding
numbers associated with 185 percent of the poverty level for
Alaska, Mr. Lomas advised of $2,501 a month gross income for
a family of three.
Senator Rieger expressed a desire to delete language
relating to 150-day temporary license provisions. He said
he would be more comfortable with establishment via
regulation, if such a provision is mandated by federal law.
Co-chairman Halford voiced a desire to delete the entire
license section. He acknowledged that the federal
government might impose the requirement.
Senator Randy Phillips referenced language relating to
grandparent liability (Page 31) and quoted the following
concern raised by a constituent who practices family law:
Teenagers who do not want to follow household
rules can easily squeeze into one of the
exceptions and begin collecting child support
based on all four of their respective parents'
income . . . .
SHIRLEY DEAN, Juneau Office, Child Support Enforcement
Division, Dept. of Revenue, came before committee. She
advised that if the teenage mother voluntarily leaves her
home, her parents would not be obligated, but the parents of
the infant's teenage father would be. Responsibility for
non-custodial parenthood would be transferred to the
father's parents. Senator Green noted that grandparent
responsibilities were included within HB 78 via a floor
amendment in the House. Co-chairman Frank asked if paternal
grandparents would have to provide support if the teenage
mother resides with her parents. Ms. Dean responded
affirmatively and advised that the reverse would be true if
the teenage mother was living with the teenage father's
parents. The attempt is to equalize responsibility between
both sets of parents.
Lengthy discussion of grandparent provisions followed using
a number of different scenarios.
Additional discussion ensued regarding the two-year bridge
provision and the five-year limitation on the program. Co-
chairman Halford suggested that the committee might wish to
include sunset provisions for the two-year bridge. Senator
Green cautioned that a two-year sunset might not allow
sufficient time. Mr. Lomas reiterated that current law
provides a 12-month transitional period. Provisions within
the proposed bill would extend the program for an additional
12 months. The program is not new but rather an extension
of an existing program. Co-chairman Halford voiced his
understanding that the fiscal note only covers the
extension. Mr. Lomas concurred.
Co-chairman Halford announced a work session on the bill
commencing at noon the following day. He advised of intent
to have a proposed committee substitute available for review
by 3:00 p.m. Senator Phillips voiced intent to prepare an
amendment to remove provisions relating to grandparent
responsibility. He also concurred in Senator Rieger's
proposed change to licensing provisions. Co-chairman
Halford expressed a preference to remove both provisions.
Senator Green advised of a proposed amendment providing for
CSED license review to become effective with implementation
of federal welfare.
ADJOURNMENT
The meeting was adjourned at approximately 6:00 p.m.
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