Legislature(1995 - 1996)
04/20/1995 01:40 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HOUSE BILL 78
"An Act relating to the maximum amount of assistance
that may be granted under the adult public assistance
program and the program of aid to families with
dependent children; proposing a special demonstration
project within the program of aid to families with
dependent children and directing the Department of
Health and Social Services to seek waivers from the
federal government to implement the project."
Co-Chair Hanley provided an overview of HB 78. He pointed
out that the intent of welfare reform is to get people off
welfare. According to a recent survey by the State
Department of Health and Social Services, 88% of Aid to
Families with Dependent Children (AFDC) clients in Alaska
have indicated that they would rather work than be on
welfare.
Co-Chair Hanley stated that HB 78 would provide for the
Department of Health and Social Services to apply for a
series of waivers from the usual provisions governing AFDC
programs. A "workfare" project would be established and
would require able-bodied recipients who were not working at
least 15 hours a week to perform community service or have
their benefits reduced.
Co-Chair Hanley concluded that the legislation would provide
positive incentives to work in the form of higher income
allowance and higher vehicle allowance. The costs of child
care and transportation necessary for participation in the
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program would be covered by the Department. He added that
HB 78 would be an initial step towards breaking the cycle of
dependence on welfare by rewarding hard work.
Co-Chair Hanley provided a sectional analysis of the
legislation. HB 78 amends existing statutes for the AFDC
program. The legislation would authorize the Department to
seek federal approval to operate four experimental AFDC
demonstration projects under the authority of Section
1115(a) of the Social Security Act, which would authorize
imposition of certain modified AFDC eligibility criteria and
requirements for participation in a mandatory work program
for project participants. The project would establish a
ratable reduction in benefit payments for the AFDC program
statewide.
Co-Chair Hanley added, under the waiver, a person would be
allowed to receive up to $200 hundred dollars for the first
amount of money made and that, they would be able to keep
1/3 of the remainder made. This would provide an incentive
for people while also allowing them to improve their status
by working and at the same time would help the State by
reducing the amount of money spent.
(Tape Change, HFC 95-89, Side 1).
Co-Chair Hanley continued explaining each section of the
bill. He reiterated that the Department would be
responsible for paying the child care costs as well as
transportation costs. One of the fiscal notes included
would cover those expenses.
JIM NORDLUND, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that
Section #7 would establish an AFDC unemployed parent
demonstration project, to assist two-parent families
establish self-sufficiency within three years.
He added that Section #8 would establish a self-employment
demonstration project to assist AFDC recipients in reducing
their need for benefits by allowing them to establish and
operate a microenterprise. Co-Chair Hanley commented that
the current system prohibits participants from saving money
as it would place them over the asset limit.
Representative Grussendorf spoke in favor of the proposed
programs, although expressed hesitation on the proposed
program funding. He communicated that the money to fund
the program would be taken from those already poor and
making them more poor for making the experiment work. Mr.
Nordlund added, a rateable reduction of 1.7% amounting to
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$13 dollars per month per one adult and child unit would be
added. He stressed that the current system would operate
the same, although there would be demonstration projects for
certain selected persons receiving AFDC. The auto exemption
would not apply for all AFDC participants in the State.
Co-Chair Hanley commented on Section #9, the "diversion"
demonstration project, which would offer short term
financial assistance to job-ready AFDC applicants in order
to avoid long-term financial support.
Representative Martin asked the intent of the language on
Page 8, Line 18, "(2) disregard up to $500 each month in
nonbusiness income set aside for the development or
operation of the microenterprise;".
CURTIS LOMAS, WELFARE REFORM PROGRAM, DIVISION OF PUBLIC
ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
explained that language provided a provision to allow an
individual to set aside income from some source other than a
business as a way to capitalize. The provision would allow
the AFDC individual to accrue up to $500 dollars per month
and place into a business capital account with a maximum
limit of $10 thousand dollars. That amount would not be
considered as income.
Representative Martin questioned how the Permanent Fund
Dividend checks and share holding reimbursements would
affect a persons qualifications to receiving welfare
subsidies. Mr. Nordlund stated that the bill would have no
effect on any AFDC recipients dividend check resulting from
the "hold harmless" provision in current law. Mr. Lomas
added, in terms of the PFD checks, the "hold harmless" would
allow a four month investment limit. Currently, a person
could set aside the check into a savings account and
continue to have their eligibility protected for up to four
months. If that person chose to place that saved amount
into a microenterprise account, a limit would no longer
exist.
Mr. Nordlund added that there would be administrative costs
associated with the new demonstration projects. In order to
move forward with welfare reform, to move people from
welfare to work, new ideas must be tried. He applauded all
demonstration projects found in the bill stating that they
are good ideas and worthy of testing.
Representative Martin criticized encouraging any further
exemptions to the welfare program. Mr. Lomas clarified
information regarding dividend payments received from Native
corporations. He stated that as a part of the 1988 Native
Claim Settlement Act, a $2 thousand dollar limit was
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established in federal law; this was not a state policy. He
added that this was not an exclusive Alaskan policy as
referenced by Representative Martin.
KIRSTEN MARTIN, SELF, PRISONERS OF WELFARE WORKING ON
WINNING, ANCHORAGE, provided the Committee with a handout of
the monthly expenditures for the average AFDC recipient.
[Attachment #2].
She asked for further consideration of the portion of the
legislation requiring the under eighteen welfare recipient
to live with the parent which would require that parent's
income to be the determinant in deciding the medical
expenses of the AFDC recipient. She directed her concern to
"breaking" the grandparent's "pocket book". Ms. Martin
requested that language be changed to exempt that
responsibility.
Mr. Lomas instructed that federal law computes the income of
a parent when the child is living with them. He added that
the bill could change that policy, however, the way the
legislation is structured, there is a federal option to
require teens to live at home. To change that language
would depend on the State of Alaska adopting that option.
He added, that section of the bill was not a demonstration
project, but was a portion of the bill which was an exercise
as an option of federal law. To change that "treatment"
would require a waiver of that portion of the bill.
Representative Martin interjected that supporting that
waiver would encourage more teenage parents to leave home.
Representative Martin cited the responsibility of the
biological father. Ms. Martin discussed the lengthy time it
takes for the Child Support Enforcement Agency to enforce
child support. She personally has waited for five years
without any child support compensation. Co-Chair Hanley
advised that there is not much flexibility within current
laws.
Representative Brown asked what a cut to the benefits would
mean to someone receiving AFDC. Ms. Martin affirmed that
she was fortunate in that she currently received rental
assistance. Without rental assistance, she stated that she
would most likely lose her housing. Ms. Martin stressed
that a ($15) fifteen dollar cut would be dramatic for
someone on such a "tight" budget. Ms. Martin emphasized
that all shelters and most churches are full; food banks
have reached their limit. She stated that many people will
loose their homes and the end product will be that many more
children will be taken by Division of Family and Youth
Services (DFYS) because the parents will no longer be
adequately able to support the child's needs. She added,
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currently there are not enough foster parents for the
children needing home placements.
Ms. Martin remarked that she was involved in creating a self
sufficiency group with other AFDC recipients through local
networking. Some of the items targeted through the
networking are child care and transportation needs. She
agreed that there are failures in the present system,
although there are many AFDC recipients who are trying to
find ways to better themselves.
SHERRIE GOLL, ALASKA WOMEN'S LOBBY/KIDPAC, JUNEAU, stated
that HB 78 was clearly the most rational approach considered
by the Legislature, pointing out that it was full of things
which removed disincentives for families to become employed
and stay employed.
Ms. Goll focused on specific areas of concern with the
proposed legislation. The first concern of the Women's
Lobby is the teen parent project. Ms. Goll pointed out that
Alaska has a high teen birth rate. In 1993, 1189 teenagers
had babies. The total case load of teen parents on AFDC is
141. She noted that the vast majority of teenagers who are
having children, are living at home with their parents and
being supported.
Ms. Goll applauded the exemptions for those with no parental
support, or if the home of the teenager was an abusive
situation and the teen could not live there. She pointed
out that 70 recipients would be affected by the project. In
determining each case, investigation would be required.
Ms. Goll emphasized that her main concern would be with the
health care needs of a pregnant teenager. Pregnant
teenagers have poor health outcomes which often mean poor
health outcomes for their children. Premature births are
much more common in teens, and most of the low birth weight
babies born prematurely will have health problems throughout
their life. Ms. Goll emphasized that prenatal care is
important as is good nutrition as well as the delivery of
the child.
In considering the parents income, the minor will be
required to live at home as a condition of eligibility.
Unless the parent of the minor is also on welfare, the teen
would not be eligible for any assistance. The concept of
holding the parents income harmless in some way so that the
teen could be eligible for assistance necessary for her to
have a healthy baby needs to be reconsidered if that section
remains in the bill.
Ms. Goll continued addressing other issues regarding the
personal responsibility of the "other" parent of the new
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baby. In 60% of the cases where a teenage girl is pregnant,
the father of that child is an adult. Ms. Goll recommended
that the State provide active child support collection. The
other 40% of the fathers are teen age boys. The family of
the teenage girl is required to take personal and financial
responsibility for the teenager and new baby, although the
same responsibility is not required of the teen dad's
family. Ms. Goll emphasized that consideration of that
section of the bill be given deeper scrutiny or that section
of the bill be dropped. Ms. Goll requested that one other
exemption be considered.
(Tape Change, HFC 95-89, Side 2).
Ms. Goll stated that if a student is enrolled in a four year
education program, they should not be required to work 20
hours a week as well.
Ms. Goll spoke to the "unemployed" parent project. Until a
few years ago, AFDC was only available to single parents who
had dependent children. In 1988, there was a change in
federal law, which indicated that law broke-up families.
The federal law mandated on states that two parent families
should be included in welfare eligibility when one of the
parents was unemployed. She pointed out that at that time
case loads grew significantly. She noted that by October,
that mandate could be terminated.
Much of the JOBS training money currently is distributed for
the two parent families. Those are the persons who will be
greatly affected by the hundred hour rule. That group could
most benefit from the limit and could live within that
restraint.
Ms. Goll opposed the rateable reductions. Without
subsidized housing, of which only 20% percent of the AFDC
recipients qualify, an AFDC recipient could not make it with
a $15 dollar monthly reduction. She emphasized that the
costs of welfare changes should be offset with increased
child support collections.
Ms. Goll noted that major changes on the federal level would
be occurring by October. She added that these changes will
probably block grant the funds and will most likely come
with less restrictions, rather than new and different
restrictions. However, the welfare system will be
redesigned. She requested that the Committee consider
putting off changes to the welfare system until the federal
changes have been made. Ms. Goll suggested changing the
effective dates for applying for the "waivers" until
January, 1996.
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Ms. Goll urged the Committee to consider off-setting the
cost of the programs other than on the "backs of the poor".
She pointed out that action would hurt 14,000 children in
Alaska.
HB 78 was HELD in Committee for further consideration.
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