HOUSE FINANCE COMMITTEE APRIL 21, 1997 2:05 P.M. TAPE HFC 97 - 108, Side 1, #000 - end. TAPE HFC 97 - 108, Side 2, #000 - end. TAPE HFC 97 - 109, Side 1, #000 - end. TAPE HFC 97 - 109, Side 2, #000 - #210. CALL TO ORDER Co-Chair Gene Therriault called the House Finance Committee meeting to order at 2:05 P.M. PRESENT Co-Chair Hanley Representative Kelly Co-Chair Therriault Representative Kohring Representative Davies Representative Martin Representative Davis Representative Moses Representative Foster Representative Mulder Representative Grussendorf ALSO PRESENT Representative William Williams; Jay Lively, Deputy Commissioner, Department of Health and Social Services; Kristen Bomengen, Assistant Attorney General, Department of Law; John Sherwood, Director, Division of Medical Assistance, Department of Health Social Services; Frank Homan, Former Commissioner, Limited Entry Commission; Geron Bruce, Legislative Liaison, Department of Fish and Game; Suzanne Goodrich, (Testified via teleconference), Executive Director, Catholic Social Services, Anchorage; Robin Brown, (Testified via teleconference), Catholic Social Services, Anchorage; Sylvia Carvajal, (Testified via teleconference), Disability Law Center, Anchorage. SUMMARY HB 153 An Act relating to the eligibility of aliens for state public assistance and medical assistance programs affected by federal welfare reform legislation; and providing for an effective date. CS HB 153 (FIN) was reported out of Committee with "do pass" recommendation and with four fiscal notes by the Department of Health of Social Services dated 2/24/97. HB 198 An Act relating to regional dive fishery development associations and to dive fishery 1 management assessments; and providing for an effective date. CS HB 198 (FIN) was reported out of Committee with "individual recommendations" with fiscal notes by the Department of Fish and Game dated 4/10/97, the Department of Revenue dated 4/10/97 and Commission Fisheries (Limited) Entry Commission dated 4/10/97. HOUSE BILL 153 "An Act relating to the eligibility of aliens for state public assistance and medical assistance programs affected by federal welfare reform legislation; and providing for an effective date." JAY LIVELY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, explained the differences between legal immigrants and qualified aliens under Public Law 104-193. Regarding a definition for a "legal immigrant", there are two issues to consider. The definition of a legal immigrant before the passage of P.L. 104-193 and the definition of a "qualified alien" under P.L. 104-193. Prior to passage of P.L. 104-193, an immigrant was considered eligible for state and federal welfare benefits if they met the definition of a legal immigrant. For this purpose, a "legal immigrant" included all immigrants lawfully admitted for permanent residence, and immigrants permanently residing under color of law (PRUCOL). Prucol aliens are considered legal permanent residents of the U.S. even though they did not go through the process of applying for and being admitted for permanent residence. Prucol aliens are aliens living in the country with the knowledge and permission of the Immigration and Naturalization Service (INS) whose departure the INS does not contemplate enforcing. For public assistance purposes, P.L. 104-193 created a new category of immigrants called "qualified aliens". Most "qualified aliens" are ineligible for public assistance or are only eligible if the state opts to cover them. Immigrants who are not "qualified aliens" are immigrants lawfully admitted for permanent residence, refugees, individuals paroled into the U.S. for a least one year, immigrants whose deportation is being withheld, certain immigrants granted conditional entry, and certain battered spouses and children. Mr. Lively continued, under P.L. 104-193, certain categories of "qualified aliens" remain eligible for public assistance 2 regardless of their immigrant status. The exception categories are: refugees and certain persons whose deportation is being withheld for their first five years in the U.S., individuals who have 40 quarters of coverage under the Social Security system, and veterans and members of the armed forces and their spouses and dependent children. Immigrants who become U.S. citizens are not subject to immigrant restrictions on public assistance eligibility. Mr. Lively pointed out the Work Opportunity Reconciliation Act (WORA) of 1996, significantly impacted immigrant eligibility for public assistance. Recent federal changes reduce or deny benefits to many legal aliens already in the country as well as new arrivals. Alaska has the option of continuing federal state assistance programs for aliens who were in the United States before August 22, 1996. Co-Chair Therriault explained the effect of Amendment #1 provided by the Governor. [Copy on file]. The amendment would include certain battered aliens as qualified aliens. The illegal Immigration Reform and Immigrant Responsibility Act of 1996 contains a provision that amended the "qualified alien" definition to include certain battered aliens by adding a new subsection, 8 U.S.C. 164(c). The amendment would incorporate the additional provision and avoid inconsistencies with federal guidelines. KRISTEN BOMENGEN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, stated that the 1996 Act included a provision that added another group to be considered as qualified aliens in a separate subsection (c). The amendment would incorporate that language with federal law. She added that currently, there is a pending technical amendment on the federal level which is being considered. Co-Chair Therriault asked if the Governor's amendment would affect the fiscal note. Mr. Lively replied that the Department does not know how many current aliens there are in the program that have been victims of domestic violence. The Department can not make that prediction as this time. Mr. Lively noted that each members packet includes a demographic chart indicating the alien population and age break down. He explained that a legal alien was a person who resides in the country legally and has arrived in the U.S. through some kind of status. (Tape Change HFC 97-108, Side 2). Ms. Bomengen added that there is a group residing in the United States under a "color of law", existing in a gray 3 zone. They do not have a green card, although, these people are U.S. citizens. Co-Chair Hanley disclosed that his sister-in-law is a legal alien. He understood that legal aliens would not be eligible for benefits for five years. After that time, they would be eligible. To become a legal alien, one must have a sponsor who will certify that the person is able to get a job or is willing to provide the job. He suggested that If a person had a sponsor, they would not be on a welfare program. The proposed legislation will grand-father in those persons who arrived in the country before August 22, 1996. Mr. Lively explained the chart which had been prepared by the Department for the Committee meeting. The chart identified fiscal impacts with passage of the legislation and its' affect to the Adult Public Assistance (APA) portion of the program. As of August, there were 800 legal immigrants in that program. With passage of the bill, those persons would be grand-fathered in. In future fiscal years, there would be attrition with that group and the costs for the APA program will decline. Without passage of the legislation, the Alaska State Statutes would not exclude legal aliens from Adult Public Assistance. The Department would remain responsible for covering those individuals. The effect to the Alaska Temporary Assistance Program (ATAP) would be the same as the net effect to the APA program. There are currently 820 people on that program. Without passage the legislation, legal immigrants would still be eligible for the program. Because of the federal five year ban, there exists a complicating factor which would increase the general fund expenditure. The federal government will not participate for five years. Mr. Lively spoke to the Medicaid program. State law statutes work conversely for Medicaid than they do for the other two programs. In Medicaid, a person needs to be written into the statute to be eligible. State law currently does not have legal immigrants written into statute. These people have always been eligible because of their relationship to the federal program. The federal government, through the immigration laws has severed that relationship. If HB 153 passes, the State would continue to cover legal immigrants who arrived in the country before August 22, 1996. JOHN SHERWOOD, DIRECTOR, DIVISION OF MEDICAL ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, commented that the Department's budget currently includes the spending for legal immigrants. If the bill passes, the Department would 4 continue to cover qualified aliens. There will be some case load reductions over- time with that group as people newly arriving in this country will experience a period of ineligibility time. Because of the way in which State law is written, this would occur whether or not the bill passes due to the change in federal law. If a choice is made to not cover qualified legal aliens, the State would be required to continue to provide emergency services through the Medicaid program. In addition, certain aliens with specific health care needs would be eligible for general medical assistance, State General Funds, an action which would create a cost shift from a 50/50 program to a general fund program. (Tape Change HFC 97-109, Side 1). Mr. Lively noted that if the bill does not pass, the Department would quit serving all the aliens being administered by Medicaid. There would be a savings off-set indicated in the fiscal note. The State would continue to serve the legal immigrants for emergency services. He concluded that it is important that bills already accrued be paid for services rendered. Mr. Sherwood explained that the legal aliens would be subject to the same five year bar in receiving Medicaid benefits. The exception with Medicaid would be that those persons who were not eligible for regular Medicaid benefits, may still qualify for coverage of emergency medical services. The legal aliens arrived before the date will continue to receive benefits as they previously had. Co-Chair Hanley asked if the federal government would continue to provide matching funds for these people. Mr. Lively stated that the federal government would continue to pay their share of that cost for all those in this country before August 22, 1996. Co-Chair Hanley asked why there would be an attrition rate in the Medicaid portion of the proposed bill, observing that there had not been a reduction in the general fund for Medicaid. Mr. Sherwood advised that the reduction was not indicated on the fiscal note and would not be related to the passage of the legislation. State Statute stipulates that money for new immigrants can not be spent through the regular Medicaid program. Mr. Sherwood continued, because of timing uncertainties, there are questions as to when the provisions would take affect. The fact that the Department will continue to experience substantial costs in providing emergency 5 services, the decision was made to include that data in the low growth assumptions developed. Mr. Lively pointed out that thirty-five states have opted into a similar welfare program that Alaska created with the welfare reform. SUZANNE GOODRICH, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE DIRECTOR, CATHOLIC SOCIAL SERVICES, ANCHORAGE, shared observations of the effect on immigrants with welfare reform. She noted that there are two different groups that would be affected. The first group are those that are currently receiving some form of public assistance and whose benefits will be cut off. The second are those who enter the country after August 22nd, and would not qualify to receive any assistance for five years. She emphasized that it is important to know that the immigrants being cut off of assistance are full-time permanent residents. They are in the country lawfully and have paid into social security but are not yet citizens. Ms. Goodrich emphasized that citizenship is an emotional, lengthy and difficult process, especially for someone with a language barrier, disability or other challenges. Currently, there are 3,105 individuals who will be affected because they are receiving assistance. Within that group, 430 are children under the age of eighteen and 631 are over the age of sixty-four. There are 801 needy people who are aged, blind or disabled. Catholic Community Services has been assisting the municipality in providing a survey of immigrants who will be loosing their assistance. She stressed that when considering legislation that will affect immigrants, it is also critical to consider the impact of welfare reform. She stressed that the local communities can not do all the work and urged Committee members to consider passage of HB 153 and the full impact of welfare reform on the Alaskan immigrants. Co-Chair Hanley asked if a person had been residing in the United States for seventeen years, would they then qualify under the five year federal guideline. Ms. Goodrich replied that would depend upon if they had worked. Mr. Lively stated that if you were an alien who had been in the states and had exemptions from being excluded, and if that person had been a veteran, or worked for forty quarters, then they would continue to receive benefits even if the five year ban was imposed. ROBIN BROWN, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, CATHOLIC SOCIAL SERVICES, ANCHORAGE, added, that there was an initial five year ban which would prohibit lawful permanent residents from receiving public assistance. After the first five years, an additional provision would apply 6 and the sponsor's income would then be taken into consideration. If that income was above the established income standard, the immigrant would not be eligible for public assistance. She pointed out that a new affidavit of support form will create a contract between the sponsor, the immigrant and the government. If the immigrant seeks to apply for public assistance, the government would then pursue collection from the sponsor. Co-Chair Hanley asked if someone who has been in the country for twenty years would be able to continue to receive benefits with this legislation. Ms. Brown replied that it would depend on whether or not they had worked for the specified amount of time. Mr. Sherwood clarified, that should the legislation not pass, that alien would need to fall into one of the exempt categories. SYLVIA CARVAJAL, (TESTIFIED VIA TELECONFERENCE), PROJECT COORDINATOR, DISABILITY LAW CENTER, ANCHORAGE, stated that her firm was attempting to identify individuals who would be loosing their federal benefits. The firm was also providing assistance for those that qualify for naturalization. The time frame for naturalization exceeds six months. She urged Committee members to move the bill from Committee. Co-Chair Therriault MOVED to adopt Amendment #1. There being NO OBJECTION, it was adopted. Co-Chair Hanley MOVED to report CS HB 153 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 153 (FIN) was reported out of Committee with a "do pass" recommendation and with four fiscal notes by the Department of Health of Social Services dated 2/24/97. HOUSE BILL 198 "An Act relating to regional dive fishery development associations and to dive fishery management assessments; and providing for an effective date." Representative G. Davis MOVED that work draft, CS HB 198 (FIN), #0-LS0415\C, Utermohle, 4/21/97, be the version before the Committee. There being NO OBJECTION, it was adopted. REPRESENTATIVE WILLIAM WILLIAMS stated that the Southeast Alaska dive fishermen have been attempting for the past 7 decade to establish orderly, consistent and stable fisheries capable of providing dependable economic opportunity for themselves, their families and the communities. The urgency to create an economically viable fishery is highlighted by the recent closure of the regions largest employer and other related negative economic effects on the economy. Substantial untapped dive fishery resources have been identified through diver and underwater activities for over a decade. The dive fishery resources appear to be abundant and diverse throughout the region. The potential for future jobs for harvesters, processors and support industries is considerable. The temporary fishery opening is based on a one time source of funding that will expire June 30, 1997. In order to continue the fishery and to develop the other dive fishery resources, a stable source of funding would be necessary. Representative Williams pointed out that HB 198 would not mandate but allow the creation of regional dive fishery development associations for the purpose of developing dive fisheries and would create a working relationship between the divers and the Alaska Department of Fish and Game (ADF&G) to develop annual operating plans. The legislation is permissive and once a regional association is formed, divers can hold a ballot election of all interim-use permit holders to answer questions. If approved by election, divers would be assessed, the State would collect and the Legislature may appropriate the assessment back to ADF&G. The appropriation would be based on the mutually developed annual operating budget and plan. ADF&G would then fund the specific purposes outlined in the legislation for the regional dive fishery development association and ADF&G. Representative Williams concluded that HB 198 would be a positive step forward by the private sector to support economic development and diversification without seeking a general fund appropriation. He urged the Committee's support of the bill. GERON BRUCE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND GAME, testified on the proposed legislation. He noted that the Department does appreciate the divers coming forward requesting the creation of a new fishery, however, the Department is concerned that expectations for increased funding are being created by this business which might not materialize. The development of the new fisheries will come at the expense of existing fisheries. Mr. Bruce continued, it does not appear that the program 8 will qualify for the designated program receipt funding as it currently is written in the bill. Without such designation, these expenditures will appear as additional general fund expenditures. Without it being an increment, funding for the new fisheries will have to come from the existing fisheries. He added, the bill would establish a close relationship between a particular group of harvesters and the Department of Fish and Game. There are a number of concerns which the public may have on developing resources. The bill would establish a special relationship, and the Department is concerned with maintaining the balance of managing public resources for a broad cross section of public interests. Mr. Bruce suggested that the Committee consider a sunset being added to the legislation which would force later reconsideration of the issue. Co-Chair Therriault asked if the Department was in support of the legislation. Mr. Bruce advised that would depend on how some other bills moved through the Legislature this year, and specifically, how program receipt authority would be addressed. Representative Williams noted that he would not support a sunset clause being added to the legislation. Co-Chair Therriault questioned if the legislation would gradually move into a limited entry permit system. Representative Williams stated that he did not know until all the information regarding need had been received. This is the first year of the moratorium. Co-Chair Therriault questioned why language had been included specifying interim-use permits. He recommended that language be held for future legislatures to determine if it should be transferred to that kind of system. Representative Williams recommended that inclusion would save a step in repeating the process. Representative G. Davis believed that a rough estimate could be provided regarding the resource cost of management. Mr. Bruce commented that the Department estimates at this time, the expenditures will be about $250 thousand dollars per year. Representative J. Davies voiced concern with the way the money is budgeted. He suggested that people supporting the legislation should follow it closely and support program receipts being used. He MOVED a conceptual amendment that revenues containing various percentages within the bill be classified as program receipts. Co-Chair Therriault OBJECTED. 9 Representative J. Davies noted that he would be amenable to changing the concept by adding that language to the intent. Co-Chair Therriault suggested that Representative J. Davies offer a Letter of Intent. He pointed out that currently, the Senate has been drawing the line on program receipts that are contractual, recommending more one-time items rather than on-going functions. A roll call vote was taken on the MOTION to adopt the conceptual amendment. IN FAVOR: Moses, J. Davies, Grussendorf OPPOSED: G. Davis, Foster, Kelly, Kohring, Therriault Representatives Martin, Mulder and Hanley were not present for the vote. The MOTION FAILED (3-5). (Tape Change HFC 97-109, Side 2). Representative Williams provided a brief synopsis of the sea urchin history in Alaska. Today there are 500 sea urchin divers in Southeast Alaska. Co-Chair Therriault noted that over the next few years, there may be more people who want to enter into that fishery and that those persons would be precluded unless they buy one of the existing permits. Representative Grussendorf informed Committee members that in creating a moratorium, there becomes a block of time to assess and analyze what stock is available and if that stock could sustain a certain level of fisheries. Then the determination can be made regarding how many people should be involved in that fishery. The interim permit increases the number of persons becoming involved, although, the moratorium would be approaching in three or four years. A point system would be established to determine how many people be allowed in the fishery in order to keep it healthy. Co-Chair Therriault asked if the limited entry process would be identical to that used in the salmon fishery. Representative G. Davis spoke to his concerns with ownership of the resource. Representative Williams stressed that HB 198 does not address limited entry. Co-Chair Therriault reiterated concern with removing the Legislature from deliberation cycle in deciding whether a limited entry permit should be granted. FRANK HOMAN, FORMER COMMISSIONER, LIMITED ENTRY COMMISSION, 10 advised that the moratorium passed last year requires the Commissioner to provide a thorough study of the dive fishery, with a provision that they look at a non- transferable type arrangement. Those things will be studied for the next three years. Representative G. Davis MOVED to report CS HB 198 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 198 (FIN) was reported out of Committee with "individual recommendations" and with a fiscal note by the Department of Fish and Game dated 4/10/97, and zero fiscal notes by the Department of Revenue dated 4/10/97 and the Commercial Fish Entry Commission dated 4/10/97. ADJOURNMENT The meeting adjourned at 3:30 P.M. 11