Legislature(1995 - 1996)
02/20/1996 01:13 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 400 - WELFARE REFORM Number 2093 CO-CHAIR IVAN noted that committee packets for HB 400 contained a copy of the bill, the Governor's transmittal letter and numerous fiscal notes from affected agencies. Number 2133 JAY LIVEY, Deputy Commissioner, Department of Health and Social Services (DHSS), expressed his intent to provide an overview of both HB 400 and the progress of welfare reform in Washington, D.C., as those issues seemed to be linked. Number 2148 MR. LIVEY explained there seemed to be two major issues with regard to what was happening in D.C. The major change was replacing the entitlements with block grants. Historically, Aid to Families with Dependent Children (AFDC) had been a joint federal-state partnership in which the federal government matched state expenditures. If populations increased or the economy turned downward, adding welfare recipients, the federal government would participate with the state in funding those additional costs. With block grants, however, that was not necessarily the case. The block grant amount coming to the state would be based on a prior expenditure year, which in Alaska's case would probably be 1994. If the cost of AFDC rose in the future, it would leave the state with the choice of adding funds or making changes to the program. Number 2218 MR. LIVEY said the second major theme in D.C. was that welfare was more than AFDC. In the U.S. Congress, welfare reform included changes to child support, food stamp, child care, Medicaid and other programs. In addition, there were bills in Congress combining and placing into block grants all the employment and training money currently coming to the states. On the federal level, welfare reform meant comprehensive changes to a lot of programs that were interactive and which affected each other. Number 2260 MR. LIVEY explained that a stand-alone welfare reform bill had passed both the House and the Senate in the U.S. Congress; that bill had been vetoed by the President. In addition, there were welfare reform proposals currently under negotiation in the Budget Reconciliation Act. Recently, the National Governors Association had met in D.C. and come up with a proposal about welfare reform. Congressional hearings were scheduled on those provisions over the next couple of weeks. Mr. Livey thought there was a good chance something would happen in welfare reform in the next year. Number 2296 MR. LIVEY said the ambiguity of not having federal welfare reform had made everyone's jobs a little more difficult. However, regardless of what happened in D.C., he felt reform should go forward. If the U.S. Congress and the President went forward with welfare reform, then HB 400 would provide a framework. If that did not happen, HB 400 offered a way of applying for waivers that would implement as many provisions of the bill as possible. Number 2336 REPRESENTATIVE ELTON expressed concern that there was no protection from future congresses. If the block grant level was "x" one year, it did not necessarily mean it would not be "y" the next year. States would also have to pick up costs if federal funding was reduced by a future congress. Number 2362 MR. LIVEY affirmed that was correct. The bill, he said, was written so that the block grant amount received in 1996 would essentially be appropriated to the state every year for five years. However, of course, Congress could come back and change that action at any time. REPRESENTATIVE ELTON noted that was exactly what the state had done to municipalities under revenue sharing municipal assistance. Number 2383 JIM NORDLUND, Director, Central Office, Division of Public Assistance, Department of Health and Social Services (DHSS), indicated that the process leading to the legislation had been quite thorough. The bill was the product of several state agencies besides DHSS, including the Departments of Labor, Law, Community and Regional Affairs, Education, Administration, Revenue, and Commerce and Economic Development, as well as the Alaska Housing Finance Corporation (AHFC) and the new Alaska Human Resources Investment Council (AHRIC). An interagency task force had met over the summer and in the fall; input from that task force was included in the bill. In addition, HB 400 was the product of the Governor's blueprint for welfare reform which was released May 1, 1995. There had also been community meetings held in late summer and fall, funded by the legislature, in 14 areas of the state. Finally, HB 400 had been based on legislation introduced the previous year. TAPE 96-14, SIDE B Number 0006 MR. NORDLUND emphasized that HB 400 was one element of a plan that also included changes in the budget, as well as administrative changes in DHSS that depended on neither the budget nor HB 400. Number 0023 MR. NORDLUND set out the primary principles behind their approach to welfare reform: 1) welfare would no longer be a permanent solution but would provide a temporary safety net; 2) work would be emphasized; 3) benefits would be limited; and 4) recipients would assume a measure of responsibility towards moving off public assistance and into the work force. Number 0074 MR. NORDLUND touched briefly on changes in the operating budget. In the current budget, they were requesting a "reinvestment of saved benefit dollars." This past year, he explained, there had been a drop in the case load, which he suggested was, in part, due to the state's welfare reform efforts. They wanted to see those dollars reinvested into job training and child care, which were both essential for successful welfare reform. Number 0104 MR. NORDLUND said his agency was trying to change the culture of the welfare office. In the past, they had simply determined eligibility and issued benefits. Now, they wished to work with clients to develop self-sufficiency plans and help them through the necessary steps. They were co-locating their agency with the Department of Labor's Division of Employment Security at various locations around the state, both for programmatic and symbolic reasons. Number 0141 MR. NORDLUND explained that the bill itself, HB 400, was a comprehensive redesign of what was currently the AFDC program. It focused on work and self-sufficiency, as well as providing the necessary tools. It completely repealed the AFDC and JOBS programs. Instead, it started over with a new program, the Alaska Family Independence Program (AFIP). The implementation of AFIP was based on what DHSS anticipated to be changes in federal law. As Mr. Livey had mentioned, if the federal law did not change and allow the state to implement the new program through the sweeping changes envisioned in HB 400, there were provisions in the bill that would allow DHSS to go forward and apply for waivers to implement as many changes as possible. Number 0192 MR. NORDLUND noted that HB 400 was broadly constructed. Many things the department planned to do would be done by regulation. He suggested the fiscal note might provide a better idea of how the program would operate than would the bill itself. Mr. Nordlund cited examples of ways the department would limit assistance. Number 0218 MR. NORDLUND referred to limits on benefits and said they were carrying forward "what looks to be a requirement from the federal government that there'll be a 60-month lifetime limit on benefits." Secondly, they anticipated basing payment levels on household expenses, reducing benefits, for example, to families receiving free or subsidized housing. That would result in a savings of approximately $2 million; in the fiscal note, DHSS was asking for a realignment of those savings into increasing the earned income disregard, which would provide further incentive for recipients to take jobs. There were a number of work incentives in the legislation, Mr. Nordlund added. Number 0295 MR. NORDLUND said teens would be required to live at home and finish their high school education or obtain their GEDs in order to receive benefits. One-parent families would receive higher priority than two-parent families. Sanctions or disqualifications would also be established for recipients who refused to take appropriate jobs, assuming adequate child care was available and that they were adequately trained for that employment. Mr. Nordlund pointed out the heavy emphasis in HB 400 on work and job development. The Governor and DHSS intended for all recipients to be in work-related activities within two years of first receiving benefits. A family would also be required to adhere to a self- sufficiency plan developed between case workers and the family. Mr. Nordlund said HB 400 also eliminated "what are currently federal regulations that are disincentives to work," one of which was the 100-hour rule that disqualified any individual who worked more than 100 hours per month. He explained that most states were doing away with that, either under waiver programs or state law. Number 0394 MR. NORDLUND noted that current recipients were allowed a car valued at up to $1,500, which in many cases precluded adequate transportation to work. Under HB 400, that provision was eliminated for one car. In addition, HB 400 provided incentives for development of self-employment, if a recipient was so suited. Opportunities for community service were also expanded through nonprofit organizations. Number 0428 MR. NORDLUND emphasized that the primary reason AFDC existed, and the reason DHSS wanted a cash assistance program to continue, was that there were still poor people in Alaska with families. The bill continued to maintain a safety net for low-income individuals with children. What had been painstakingly avoided under HB 400 was making across-the-board benefit cuts. Instead, cuts were being made to provide incentives to work and to provide equity to families currently receiving AFDC. Number 0481 MR. NORDLUND said the bill provided services to teen parents to ensure they had safe homes. He said they were working to establish better cooperation and communication between food banks and food kitchens in the state, as well. He mentioned a food coalition established by Commissioner Perdue. More community involvement was envisioned in the administration of what was currently the AFDC program, Mr. Nordlund said. Currently, the public assistance program was based on a state-to-client relationship, with 450 employees in 12 offices located around the state. In the future, under welfare reform and the flexibility it would provide, he envisioned that local communities, including Native organizations, local nonprofits or municipalities, could take over part of what the Division of Public Assistance was currently administering. Mr. Nordlund added that HB 400 gave grant authority to DHSS to do that. Number 0555 MR. NORDLUND explained that if a federal welfare bill were signed into law, there was little doubt it would contain a Native set- aside provision allowing Native organizations to contract directly with the federal government to provide what is currently the AFDC program. The Administration was in support of that, Mr. Nordlund said. Furthermore, there was language in HB 400 that asked DHSS to coordinate and cooperate with Native organizations as they worked with the federal government to establish their own programs. Number 0608 MR. NORDLUND mentioned that child support was a big part of the bill, which increased the tools available to the Department of Revenue's Child Support Enforcement Division to collect payments from child support obligors. With regards to this, the language in HB 400 was identical to that in the previous year's legislation. He said language relating to possible withholding of individuals' occupational or driver's licenses in lieu of child support payments would probably be required by the federal government under welfare reform proposals currently being considered by the Congress. Number 0663 MR. NORDLUND concluded by saying there was a section-by-section analysis which had been provided with the legislation. CO-CHAIR IVAN referred to the possibility of block grants going to the state, with some diverting to the Native community. He asked if that would decrease the number of personnel in the Division of Public Assistance. Number 0695 MR. NORDLUND replied that the correct way of portraying that relationship would be that the monies coming from the federal government would not go to the state, but would go directly to the Native organizations. It would be a direct federal-Native relationship for the federal share of that money. To answer Co- Chair Ivan's question, he said there would probably be some affect on the number of employees. However, that was hard to determine right now because currently the division also administered the food stamp program, as well as the adult public assistance programs. Their staff would still need to do eligibility for those programs, while the Native organizations would do eligibility for the AFDC programs. He anticipated a reduction of staff if they gave up to Native organizations not only the benefit dollars, currently administered by the state, but also some of the administrative dollars. However, it was too difficult to quantify right now, he reiterated. Number 0750 CO-CHAIR IVAN mentioned that he had voted for a measure that passed the House last session. He asked what the differences were between HB 400 and the bill that passed the House the previous year. Number 0772 MR. NORDLUND explained that last year's legislation was based on current law. "The way we wanted to achieve welfare reform was through waivers in the federal law," he said, adding that was a much more piecemeal approach. On the other hand, this year's legislation was a sweeping, comprehensive change, wiping clean the current AFDC and child support statutes and starting all over. "We are doing this in anticipation of federal welfare reform," he said. "Last year's legislation was based upon existing federal and state law." Number 0830 CO-CHAIR IVAN asked about the difference between last year's five- year time line and the current one. MR. NORDLUND explained that the previous year's legislation would have been signed by the Governor except for the five-year provision. Whether intentional or not, the way the Attorney General's Office read that legislation was that the five-year limit would have kicked in for individuals starting at birth. Any child who was a beneficiary of the AFDC program for five years would never be eligible for AFDC again, even if he or she needed assistance later as an adult with children. The Governor had felt that was exceptionally harmful to children and with some regret had to veto an otherwise good piece of legislation because of that provision, Mr. Nordlund noted. Number 0885 CO-CHAIR IVAN referred to the Alaska Family Independence Program (AFIP). He asked about differences between AFIP and the AFDC and JOBS programs that would be replaced. Number 0906 MR. NORDLUND said the reason the JOBS program was no longer identified was not because that program was considered unimportant. In fact, he said, they envisioned the whole public assistance agency essentially becoming like the JOBS program. To make sure that the AFDC program, as they knew it in the past, no longer existed, they had thought it appropriate to rename it. It was also renamed on the federal level, he noted. Number 0971 REPRESENTATIVE ELTON said he was "half-way comforted" about the five-year limit. He asked if the five-year limit did not kick in until the age of majority. MR. NORDLUND nodded yes. REPRESENTATIVE ELTON asked, "if a person, a parent, has been in the program from the age of 21 to 26, what happens to the kids in that family once the parent is kicked out?" He further asked what percentage of the client base would probably be kicked out by a five-year limit. Number 1014 MR. NORDLUND clarified that what was envisioned under the federal law, which was being carried through in this legislation, was that after 60 months of receiving benefits, the entire family would be ineligible to receive benefits again. Once a child in that family grew up and had offspring, establishing a new case, he or she would be eligible. Number 1039 REPRESENTATIVE ELTON expressed concern over having a program that kicked a child out for the failure of a parent to "matriculate from the program, whatever the structure of that might be." He said he assumed that the structure of HB 400 anticipated the federal requirement of a 60-month limit and that there was nothing the state could do about that. Number 1076 MR. NORDLUND replied, "We don't know exactly what the state could do about that. We don't know where we're going to be, necessarily, in five years, once this provision kicks in." He added that it was of great concern to the Administration what happened to families going over the 60-month limit. It was their goal to not allow that to happen. "We need to bring as many forces to bear as we can to make sure that those individuals are given every opportunity to move into the work force as possible," he said. He noted that there was currently either a 15 or 20 percent exemption, depending on which version of the federal welfare reform was looked at; the National Governor's Association had suggested it be 20 percent. That exemption would mean 20 percent of the case load would be exempt from the 60-month limit. Presumably, that exemption would apply to people who were disabled and unable to work, or else individuals living in areas with chronically high unemployment areas. "This continues to be a source of concern to us," he said. He voiced the need for child care and job training to get people back into the work force. Number 1163 MR. LIVEY agreed the bill put much more responsibility on the family, as well as on the department. He referred to the fiscal note and the bill and said that in conjunction with the budget, what was proposed was taking some savings from case load reductions and continually reinvesting those savings into job training, child care, adult basic education and so forth, so that people could work their way off the program. Number 1222 CAROL YAKISH, Social Worker, Kodiak Area Native Association (KANA), testified via teleconference, saying she had some concerns, mainly because of her work with the Bureau of Indian Affairs (BIA) general assistance program for the Native villages on Kodiak Island. One concern was not knowing whether BIA general assistance programs would continue or how they would fit into the state block grant areas, as well as whether KANA, as one of the 12 listed organizations, would or would not take on responsibility for what was now known as the AFDC program. Ms. Yakish thought the impact on the villages would be great. She was concerned about incorporating the requirements of the programs within the isolated villages that had chronic high unemployment. Number 1356 LOUISE CHARLES, Administrator, Job Opportunities and Basic Skills Program, Tanana Chiefs Conference, testified via teleconference from Fairbanks in favor of HB 400, which she thought was fair to urban and rural welfare recipients alike. She discussed the obstacles faced by people in welfare-to-work programs and provided an overview of the tribal JOBS program. It was impossible to serve all eligible clients with their current funding, Ms. Charles said, although they were trying their best. She cited examples of agreements with other local agencies. She noted that many clients needed developmental or adult education courses prior to gaining skills to get jobs that paid well enough to make workers self- supporting. Ms. Charles provided examples of clients who had moved from the AFDC rolls because of job training programs and indicated more funds were needed for that. She emphasized the necessity of looking at local solutions for rural areas. Number 1944 ANGELA SALERNO, Executive Director, Alaska Chapter, National Association of Social Workers, testified via teleconference from Anchorage, saying her association represented 450 social workers statewide. She spoke in favor of HB 400, which offered a well developed and workable plan for removing recipients of AFDC into work. Considering the five-year limit, she said, recipients would need work that would support their families. She expressed strong approval of the job training and child care provisions of HB 400, both for people at school and at work, as well as provisions to increase child support collections. She commended the department for their work on the bill. Number 2115 GENE OTTENSTOER, Victims of the State and Guardians of Family Rights, testified via teleconference from Delta Junction, asking how much federal funding the state received by passing this bill and others like it, such as bills on domestic violence. Number 2177 MR. NORDLUND replied that this bill did not directly affect the amount of federal funding to be received. Instead, it anticipated a federal block grant, which would likely be the amount of money received for the AFDC and JOBS programs, as well as for AFDC administration, in FY 1994. That amount was less than amounts currently received. This bill was written envisioning fewer federal dollars available to the state for the administration of these programs, Mr. Nordlund added. Number 2236 MR. OTTENSTOER voiced that this bill and others like it were geared to strip families of wealth and freedom and put them under the whips of slavery. It not only attacked the Constitution, Bill of Rights and Magna Carta, it was an attack on the back-bone of our country, which was the family. Anyone who would vote for this bill or any like it was committing treason. A better plan of attack for welfare reform would be to put recipients to work doing jobs that were not very nice. This would not only save money, but would inspire recipients to get off welfare. Number 2333 SINEAD (ph) PHIPPS, Board of Directors, Guardians of Family Rights, testified via teleconference from Delta Junction, saying the bill went against the Declaration of Independence and was another form of unconstitutional attack on families, making it a crime to be poor, because most poor families were not politically correct. This bill was a back door for Communist take-over. It would not help anyone to become more self-sufficient but promoted more dependency on the government. It advocated the promotion of Healthy Start and similar programs by way of back door taxing. It tried to control every aspect of a person's life, taking away the rights and freedoms guaranteed by the Constitution of the United States and the Holy Bible. The state appeared to be wanting to receive more federal bounty. It appeared to be a means of robbing from people to separate them from any possible means of wealth that they may obtain to get ahead. More government control was not what was needed. This was not a way of freedom, but a way of bondage. Ms. Phipps disapproved renaming AFDC and disagreed with Section 36, page 35. TAPE 96-15, SIDE A Number 0001 MS. PHIPPS concluded her comments by saying, "You are committing treason and sedition, and do you know ... what could happen to you for doing that?" Number 0073 SHARON OLSEN, Chairperson, Alaska Native Coalition on Employment and Training (ANCET), noted that Ed Thomas had given testimony and provided copies the previous day to "the Senate committee." She mentioned some personal background and then read from a three-page document entitled, "Testimony on Welfare Reform Legislation, February 20, 1996," which she provided to the current committee as part of a packet prepared by ANCET. MS. OLSEN furnished background on the Tribal Job Opportunities and Basic Skills (JOBS) Program; discussed consolidation of programs under PL 102-477 and the joint partnership between Alaska Natives and the federal government to provide services; and made recommendations. Briefly, the recommendations addressed the following: 1) strengthening government-to-government relationship between Alaska tribes and the state government; 2) supporting the Governor's inclusion of a tribal match for FY 1997; 3) stimulating economic development, with special emphasis on creating job opportunities for those dependent on public assistance; 4) consulting with tribal governments in development of state waiver requests; 5) inviting tribes who were willing and able to contract with the state for a block grant as a demonstration project until the federal government passed welfare reform legislation; and 6) developing Tribal JOBS Plans for the next two years. Number 0804 CO-CHAIR IVAN shared his opinions about the state of Alaska not recognizing "so-called village tribal governments." He acknowledged there was a debate over the sovereignty issue that he wished could be set aside. The tribal government IRAs had been in place for centuries, he said, and were part of a community that could help in the welfare reform process, if the arguments could be set aside. Number 0869 DARLENE DEWEY, Child Care Coordinator, Child Care and Development Block Grants, Kawarek, Incorporated, testified via teleconference from Nome. Referring to AS 47.27.025 (a), regarding family assistance, she suggested that if the system intended to help families on AFDC become self-sufficient, assets should not be considered in determining benefits. She did not favor a time limit. She said most of the clients in the program lacked job skills. She thought clients in rural villages who were taking college classes should be considered. It cost money to leave the village, she said, and having time limits would only put children in jeopardy. Number 1054 MS. DEWEY referred to definitions under AS 47.27.090 and said since so many programs were involved, she recommended that the legislature come up with one flat income guideline. The clients using those services were AFDC clients and should not have to report every penny that went past their front door, she said. "Please define income, whether it is going to be earned or unearned, and delete assets as part of the applicant's requirements," she concluded. Number 1112 BRENDA AKELKOK, Bristol Bay Native Association, testified via teleconference from Dillingham. She explained that as a tribal entity, the association was interested in developing community service and work experience positions under contract with the state. However, they wondered what provisions there would be to indemnify "these Native entities from liability if something should happen to a work experience participant while they were on the job." She assumed such people would not be covered by Workers Compensation. She asked Mr. Nordlund to respond. Number 1171 MR. NORDLUND deferred to Kristen Bomengen to reply. KRISTEN BOMENGEN, Assistant Attorney General, Human Services Section, Civil Division (Juneau), Department of Law, said there might be a couple of different circumstances that had been described here. She acknowledged that all questions about what coverages would be required had not yet been answered. For subsidized employment, the entity employing the person would need to ensure there was Workers Compensation coverage. "I think that there may be an unlimited number of potential liability issues," she said. She pointed out that she was not really prepared to address all of those issues. "I think that there will be some provisions where someone is hired working on behalf of an outside employer, where we would, under state law, have to recognize the Workers Compensation provisions," she added. Number 1257 MS. AKELKOK responded that had answered some of the questions. However, she was still interested in seeing, for community service positions with nonprofits or state agencies, what protection there would be for the tribal entity, as well as for the state. She added that concluded her testimony for now. Number 1280 CO-CHAIR IVAN asked if there was any further testimony. He noted that the bill would be considered again. He thanked the participants and mentioned that the next meeting would address HB 409 and HB 383.