Legislature(2001 - 2002)
02/28/2002 01:54 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 402
An Act relating to diversion payments, wage subsidies,
cash assistance, and self- sufficiency services
provided under the Alaska temporary assistance program;
relating to the food stamp program; relating to child
support cases that include persons who receive cash
assistance or self-sufficiency services under the
Alaska temporary assistance program; and providing for
an effective date.
REPRESENTATIVE FRED DYSON spoke in support of HB 402. He
explained that the legislation would take Alaska Temporary
Assistance to Needy Families (TANF) funds and food stamps to
subsidize employment. Instead of receiving a welfare check
clients would get a job. This would allow small businesses
to employ persons that they might not otherwise have been
able to justify. He noted that in the state of Oregon 65 -
85 percent of their clients retained their jobs after the
subsidy period. He noted that Sandy Hoback, American
Institute of Full Employment Oregon, helped to draft the
legislation based on the experiences of the state of Oregon.
This bill authorizes full family sanctions, which allows the
Department to sanction (withdraw benefits) until a job is
found. The bill repeals the limit of the percentage of
people on welfare that can extend the benefits past 60
months. There is currently a 20 percent limit. The
department supports the lifting of the 20 percent cap.
There are some people that will not be able to make the
transition due to disabilities or other problems. A
percentage of hard-core welfare people will need to have
continued assistance. He acknowledged concerns that
elimination of the 20 percent cap could be taken advantage
of and that there should be some limits. He observed that
the legislature could require a report regarding the number
of waivers or exceptions.
Representative Dyson provided members with a committee
substitute for consideration. He acknowledged that concern
remains regarding the 20% limit. The proposed committee
substitute raises the limit to 30 percent for discussion
purposes.
Representative Hudson MOVED to ADOPT the committee
substitute 22-LS1431\F, Lauterbach, 2/27/02. There being NO
OBJECTION, it was adopted.
JIM NORDLUND, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, voiced his
appreciation for creation of the bill. He noted that the
department supports all five provisions of the bill. He
noted that the department has some trepidation with the
family sanction provision. This provision would require the
department to fully sanction a family off benefits for
failure to cooperate with the program. He pointed out that
very few families are not cooperative with the Department.
He noted that the department would support the provision
with adequate protection to make sure that the department
does not make a mistake in cutting off a family's benefits.
He stressed the need to for a determination to fully explain
the sanction to the family.
Mr. Nordlund discussed the 20% provision. He noted that of
the temporary caseload, 20% of the current caseload can be
exempt from the 5 year limit. He observed that the caseload
has come down by 40 - 50 percent across the nation. The 20
percent applies to the current size of the caseload not the
caseload that existed when the law was passed in 1996. As
the caseload has been reduced 20% becomes a lower number of
families. Those that are most able to get off the caseload
have moved off, but those with the greatest disability or
inability to work stay on the caseload.
TAPE HFC 02 - 34, Side A
Mr. Nordlund maintained that there will be families forced
off the caseload that have disabilities, are caring for
disabled children, victims of domestic violence or have some
other form of hardship that prevents them from working and
supporting their families. The Department proposes getting
rid of the arbitrary number and look at the circumstances of
the family. If the family meets a set of strict criteria
than they would receive an extension.
Mr. Nordlund observed that the terminology would be changed
from exemption to extension. Situations would be reviewed
and decided based on the circumstances of the family. The
proposed committee substitute would change the cap to 30
percent, which the department would prefer over current law.
The department would prefer not to have any arbitrary
number, but rely on criteria established in regulation.
In response to a question by Representative Croft, Mr.
Nordlund explained that the maximum under federal law is 20
percent. State law provided for 10 percent or the federal
percentage, whichever is greater. Federal law is greater.
passed before the federal law passed. State law was passed
before federal law.
Mr. Nordlund noted that the original caseload was 12,483.
The department anticipates a caseload of 5,598 in FY03.
Representative John Davies suggested that if the caseload
was reduced to less than 50 percent, that the limit should
go from 20 - 40 percent.
In response to a question by Representative Davies, Mr.
Nordlund noted that the limitation was repealed in section
54 of the original version of the bill.
Representative John Davies asked if there is a federal
limit, which would limit the state. Mr. Nordlund
acknowledged that the federal limit is still 20 percent. He
explained that many states do not have a time limit. States
that want to provide benefits to families over the 20
percent limit use their state funds. Alaska law does not
allow the use of state funds. He thought that a 30 percent
limitation would be better, but emphasized that it is still
an arbitrary number, which creates a disincentive to reduce
the caseload. He pointed out that it is a federal block
grant with a required minimum effort of state general funds.
The program has a set amount of funding regardless of
caseload.
Representative Lancaster questioned if clients are returning
to the program. Mr. Nordlund noted that after 2 years, 30
percent of their clients had returned to the caseload. There
is a 60-month lifetime limit.
Representative Dyson stressed that he did not want people to
get waivers because there are no jobs where they live. He
maintained that people should move to where the jobs are. He
suggested that there is a stable group of chronically
unemployed. He thought that those coming into the state
would be more employable. He did not think that the
percentage of new people coming on to rolls would be less
than 30 - 40 percent. He pointed out that as the numbers
shrink, the percentage of chronically unemployed increases.
The department will be against the 20 percent limit in a
couple of years if it is not removed. He maintained that an
increase in the limit would provide additional time to see
what is happening and make adjustments based on better
factors. He emphasized the importance of moving the
legislation.
Representative Hudson asked if there is anything in the
existing law that establishes the standards. Mr. Nordlund
explained that there are criteria for exemptions in law.
Exemptions include persons with disabilities, caring for a
disabled child, victims of domestic violence, and people who
face hardship. The hardship category needs more definition.
The department is in the process of defining hardship in
regulation.
Representative Harris asked for a clarification on the
limitation. Representative Dyson stated that he did not have
a strong feeling on inclusion of a limitation. He expressed
confidence with the department. He would support the bill
with or without the limit.
SANDY HOBACK, INDEPENDENT CONSULTANT, AMERICAN INSTITUTE OF
FULL EMPLOYMENT OREGON testified via teleconference. She
noted that she helped to draft the legislation. The
legislation incorporates the five legislative
recommendations that were made to improve the program. Their
report recommended the use of narrowly crafted criteria as
opposed to an arbitrary cap. She emphasized the need for
legislative reporting regarding extensions and cautioned
that a cap not be a disincentive for caseload reductions.
She agreed that the there would not be the same level of
need for new clients in regards to the five-year limit. She
thought that a 30 percent cap would be reasonable,
especially for the next couple of years.
Ms. Hoback explained that Oregon reduced their caseload by
65 percent. She estimated that when the caseload is reduced
to about 35 percent that a third of the remaining caseload
would remain for a significant amount of time.
Representative John Davies questioned why the new population
would not have the same percentage of the population staying
on the caseload.
Ms. Hoback noted that a portion of the chronic unemployed
have been on welfare for a long period of time and were
unable to be re-meditated. New clients have a higher level
of employability. She pointed out that the chronically
unemployed have been attached to assistance for years. She
did not think that the same level of difficulty would be
brought into the system. She acknowledged that there would
be some multi generation welfare recipients. She emphasized
that if the Department is doing a good job that there would
be fewer children coming into the system as adults. She did
not think that there would be the same flow rate as the old
system, which did no more than provide a welfare check.
Representative Whitaker asked why the legislation needed to
pass in the current year. Representative Dyson stressed that
there is a paradigm shift toward providing a job instead of
a check. He stated that the sooner that the Administration
is empowered; the sooner benefits would be reaped. He noted
that the 20 percent limit would present a problem in the
future and emphasized the need to get the program going.
Vice-Chair Bunde spoke in support of a 30 percent limit
accompanied by reports.
Mr. Nordlund responded that first timer's will meet the
limit in July. There will be families without benefits in
July because they do not meet the criteria for an extension.
Representative Dyson observed that the measures had been
adjusted.
Representative John Davies MOVED to ADOPT Amendment 1:
delete "30" and insert "33" percent. There being NO
OBJECTION, it was so ordered.
Representative Davies MOVED to report CSHB 402 (FIN) out of
Committee with the accompanying fiscal note.
CSHB 402 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with previously published fiscal
note: HSS #1.
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