Legislature(1995 - 1996)

03/27/1995 10:15 AM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                         March 27, 1995                                        
                           10:15 a.m.                                          
  MEMBERS PRESENT                                                              
 Senator Lyda Green, Chairman                                                  
 Senator Loren Leman, Vice-Chairman                                            
 Senator Mike Miller                                                           
 Senator Johnny Ellis                                                          
 Senator Judy Salo                                                             
  MEMBERS ABSENT                                                               
 All members present.                                                          
  COMMITTEE CALENDAR                                                           
 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."                                                           
 SB 134 (ATWOOD CHAIR OF JOURNALISM AT U OF AA) was scheduled, but             
 not heard this date.                                                          
 HB 108 (USE PFD'S TO RECOVER WELFARE OVERPAYMENTS) was scheduled,             
 but not heard this date.                                                      
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 98 - See Health, Education & Social Services minutes dated                 
         3/8/95, 3/10/95, 3/13/95, 3/17/95, 3/22/95, 3/24/95 and               
 SB 134 - No previous action to record.                                        
 HB 108 - No previous action to record.                                        
  WITNESS REGISTER                                                             
 Portia Babcock,Staff                                                          
 Senator Green                                                                 
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
 POSITION STATEMENT:  Offered additional information.                          
 Jim Nordlund, Director                                                        
 Division of Public Assistance                                                 
 Department of Health & Social Services                                        
 PO Box 110640                                                                 
 Juneau, Alaska 99811-0640                                                     
 POSITION STATEMENT:  Discussed the positive and negative aspects of           
                      SB 98.                                                   
 Curt Lomas, Welfare Reform Program                                            
 Division of Public Assistance                                                 
 Department of Health & Social Services                                        
 PO Box 110640                                                                 
 Juneau, Alaska 99811-0640                                                     
 POSITION STATEMENT:  Offered additional information.                          
 Deborah Craig, Director                                                       
 Project Career Course                                                         
 Project Independence                                                          
 POSITION STATEMENT:  Discussed the findings of Project                        
  ACTION NARRATIVE                                                             
 TAPE 95-26, SIDE A                                                            
          SB  98 PERSONAL RESPONSIBILITY ACT OF 1995                         
 Number 002                                                                    
 CHAIRMAN GREEN called the Senate Health, Education and Social                 
 Services (HESS) Committee to order at 10:15 a.m.  She introduced              
 SB 98  as the only order of business before the committee; SB 134             
 and HB 108 will be taken up at a later date.                                  
 SENATOR LEMAN moved that the CS, Lauterbach O version 3/24/95, be             
 adopted for discussion and mark up purposes.  Hearing no objection,           
 the CS was adopted.                                                           
 CHAIRMAN GREEN noted that there were amendments.                              
 SENATOR LEMAN moved that Amendment 1 be adopted.  Hearing no                  
 objection, Amendment 1 was adopted.                                           
 CHAIRMAN GREEN pointed out that most of these amendments were                 
 suggested by the agency and the department on Friday and Saturday.            
 Number 038                                                                    
 SENATOR LEMAN moved that Amendment 2 be adopted.  Hearing no                  
 objection, Amendment 2 was adopted.                                           
 SENATOR LEMAN moved that Amendment 3 be adopted.  Hearing no                  
 objection, Amendment 3 was adopted.                                           
 SENATOR LEMAN moved that Amendment 4 be adopted.  He indicated that           
 with regard to Amendment 4, he was not convinced that other things            
 should not be done regarding alcohol and drug use.  He expressed              
 concern with people taking welfare money and investing it into this           
 activity, but he realized that this issue is beyond the scope of              
 this.  He removed any objection to the amendment.                             
 CHAIRMAN GREEN stated that this may not be the appropriate time to            
 address this issue.  She noted the possibility of a voucher system            
 in order to tackle this issue.  Without objection, Amendment 4 was            
 SENATOR LEMAN moved that Amendment 5 be adopted.  Hearing                     
 objection, Amendment 5 was adopted.                                           
 SENATOR LEMAN moved that Amendment 6 be adopted.  He explained that           
 this amendment deals with the establishment of paternity which is             
 a lengthy process.  Perhaps the drafter could make this more                  
 concise which would be a technical change.                                    
 Number 105                                                                    
 CHAIRMAN GREEN commented that it was interesting that on the one              
 hand the department wanted the language in order to secure                    
 information about the father and to require participation in the              
 support of the child.  On the other, the department is also                   
 concerned with the length of time required in the establishment of            
 paternity.  She noted that the governor's bill would be heard.                
 Hearing no objection, Amendment 6 was adopted.                                
 SENATOR ELLIS asked if Chairman Green was referring to the                    
 governor's welfare reform bill.  CHAIRMAN GREEN clarified that she            
 was referring to SB 115 regarding child support; the governor's               
 welfare reform bill is not scheduled at this time.                            
 SENATOR ELLIS asked if Chairman Green planned to schedule the                 
 governor's welfare reform bill.  CHAIRMAN GREEN said that she did             
 not know and stated that she had not made a decision.  SENATOR                
 ELLIS encouraged the Chair to consider scheduling it in the near              
 SENATOR LEMAN moved that Amendment 7 be adopted.  Amendment 7 would           
 change workfare to a project area.  Senator Leman felt that it                
 would be better statewide, however, he understood the costs and               
 difficulties the department would face with the implementation of             
 this.  This is a big step in the right direction.  He predicted               
 that the four project areas would be a great success and other                
 areas would want to participate.                                              
 CHAIRMAN GREEN noted that this was intended to give the department            
 Number 166                                                                    
 SENATOR SALO felt that Amendment 7 was conceptually good.  If the             
 intention is to move this bill out of committee today, Senator Salo           
 asked what the actual language for Amendment 7 would be.  SENATOR             
 LEMAN commented that the language should be similar to his welfare            
 reform bill last year.                                                        
 PORTIA BABCOCK, staff to Senator Green, pointed out that SB 98 had            
 this section in an earlier draft.  CHAIRMAN GREEN clarified that it           
 was in the first version of SB 98.                                            
 CHAIRMAN GREEN announced that Amendment 7 was adopted.  She asked             
 if there was anyone present who wished to testify.                            
 JIM NORDLUND, Director of the Division of Public Assistance for the           
 Department of Health and Social Services, thanked the the committee           
 for their extension of courtesy in allowing he and other members of           
 the Administration to work on this legislation.  In his opinion,              
 the bill has improved although some problems remain.  He noted that           
 his comments would be directed to the old CS and the adopted                  
 Mr. Nordlund felt that this bill applies some risky and untested              
 ideas on a permanent statewide basis.  These are costly programs              
 that affect the lives of thousands of people; more care should be             
 taken in applying some of the provisions in this bill.  The                   
 governor's approach applies demonstration projects for a limited              
 time in order to discover if the projects work.  He pointed out               
 that the difference between the old version of SB 98 and the                  
 previous version is that these changes are made to permanent law.             
 With the exception of the workfare amendment, the projects would be           
 applied on a permanent and statewide basis.  Other provisions                 
 remain too costly, unworkable, untested, illegal and                          
 unconstitutional.  More work is necessary to achieve a workable               
 welfare reform proposal.                                                      
 Mr. Nordlund identified the following improvements to SB 98:  the             
 phased in sanctions of various provisions, the deletion of any                
 reference to aliens, the deletion of the 15 percent participation             
 requirement in the diversion project, the allowance of good cause             
 for quitting a job, the less rigid paternity establishment                    
 requirements, the deletion of the APA rateable reduction, the                 
 deletion of the permanent fund dividend ineligibility section, and            
 the inclusion of the self-sufficiency language as a statutory                 
 requirement of the department.                                                
 Number 243                                                                    
 Mr. Nordlund identified the problems with the bill.  The                      
 requirement of information from the department to be turned in                
 regarding illegal aliens raises concerns with confidentiality.                
 CHAIRMAN GREEN asked if they did not do that now.  JIM NORDLUND               
 explained that the department is not required nor allowed under               
 state and federal law to give out such information.  Mr. Nordlund             
 believed that the Department of Law had testified to that affect.             
 JIM NORDLUND continued to cite problems with the bill.  There would           
 be difficulties in checking out the fraud histories of welfare                
 recipients in other states.  He pointed out that a criminal records           
 check would have to done on every AFDC applicant which would pose             
 a fiscal impact.  The elimination of a benefit for an additional              
 child born to a welfare recipient is an inaccurate approach; it               
 punishes children.  The governor's approach works towards pregnancy           
 prevention counseling.  Another problem with the bill is the time             
 limits on benefits which do not provide an adequate transition to             
 work.  He noted the continued opposition to the rateable reduction            
 provision.  There was a rateable reduction to AFDC and APA a couple           
 of years ago; the poor of Alaska have already given their share in            
 the need to reduce the budget.  He stated that the diversion                  
 project would not work as well if cash grants were not allowed.  He           
 acknowledged that there can potentially be misuse with those cash             
 grants and the department would like to work with the committee to            
 eliminate those abuses.                                                       
 CHAIRMAN GREEN asked if there was a way to compromise with the cash           
 grants such as purchase orders, vouchers or direct payments.  JIM             
 NORDLUND said that those possibilities could be reviewed.                     
 JIM NORDLUND continued with his discussion of the problems with               
 SB 98.  The personal responsibility agreement should not be in                
 statute.  Recipients already sign an agreement which could be                 
 extended.  He felt that by putting it in law, the provision becomes           
 too rigid when the department will be facing a new welfare system.            
 CHAIRMAN GREEN asked if a new administrator decides that he/she               
 wanted to change the language of the existing agreement or                    
 eliminate it entirely, could he/she do that?  JIM NORDLUND                    
 suggested that the agreement be adopted in regulation because it              
 would be easier to change in regulation rather than statute.  Mr.             
 Nordlund noted that changes to regulation go through a public                 
 hearing process with adequate time for review.                                
 Number 309                                                                    
 JIM NORDLUND stated that the two-tier payment system is likely to             
 be found unconstitutional.  He pointed out that there would be                
 difficulties in achieving the attendance verification under the               
 learnfare provisions.  The difficulty arises from the 53 separate             
 school districts in Alaska that are all on different computer                 
 systems not to mention that a central recording system would be               
 needed to report attendance to the Department of Education or to              
 CHAIRMAN GREEN indicated that she had developed this idea through             
 school administrators who were desperate to find a way in which to            
 work with their families.  She suggested writing the attendance on            
 paper and sending it in.                                                      
 SENATOR SALO pointed out that the Chairman's suggestion assumes               
 that the school person knows who receives public assistance which             
 is not necessarily the case.  She explained that if school                    
 districts established a definition of unacceptable attendance in              
 regulation, the schools may be able to send in the names of                   
 students to DHSS who do not meet that regulation.  Another problem            
 arises with the matching of the names of students and parents.  She           
 clarified that with this list of students with unacceptable                   
 attendance, the names of those on public assistance could be                  
 searched.  She hoped that this department would be well funded if             
 they would be asked to do additional tasks.  This is a reasonable             
 requirement as long as the work of gathering the data is funded.              
 CHAIRMAN GREEN reiterated that she had heard frustration from                 
 almost all the schools regarding the lack of participation from               
 students and families.  Perhaps, truancy laws should be enacted.              
 SENATOR SALO informed the Chair that there are truancy laws,                  
 although they are unfunded.                                                   
 JIM NORDLUND noted that the Department of Education does have some            
 problems in principles with this.  He expressed concern with the              
 ease with which this could be implemented.  Maybe attendance                  
 verification should be implemented as a pilot project in an area in           
 order to discover if it would work before applying it statewide.              
 CHAIRMAN GREEN stated that the rural districts have indicated                 
 support of this provision.                                                    
 Number 361                                                                    
 JIM NORDLUND addressed another problem that remains in the bill.              
 The denial of interim assistance benefits to people who are                   
 determined ineligible in their initial application.  Many of those            
 original denials are later found to be eligible.                              
 CHAIRMAN GREEN asked if interim assistance was a federal program.             
 JIM NORDLUND replied yes.  CHAIRMAN GREEN said that the federal               
 government should fund interim assistance.  JIM NORDLUND explained            
 that the federal determination of whether an individual would                 
 receive those benefits is a lengthy process.  The division provides           
 interim assistance to be received between the time a person applies           
 and the time they receive federal assistance.  CHAIRMAN GREEN                 
 interjected that 20 of the original 100 applicants that were                  
 initially determined ineligible appeal and become eligible.                   
 CURT LOMAS, the Division of Public Assistance, explained that the             
 Chair was essentially correct.  He explained that the division is             
 reimbursed for those individuals who are ultimately approved.  The            
 division can collect interim assistance from that individual's                
 retroactive Supplemental Security Income (SSI).  He noted that the            
 division has an agreement with the federal government which allows            
 that.  He specified that this reimbursement only occurs with those            
 applicants who are ultimately found to be eligible for assistance.            
 CHAIRMAN GREEN explained that after calculations a total of 20                
 people qualify after being initially determined ineligible.                   
 SENATOR SALO said, in an attempt to understand this calculation,              
 that 100 people are being paid interim assistance and only 20 of              
 them would qualify for assistance in the end.                                 
 Number 390                                                                    
 CURT LOMAS noted that everyone who is initially denied does not               
 appeal.  He explained that approximately 40 percent of the initial            
 applicants are approved, approximately 60 percent of the applicants           
 are initially denied; of those initially denied 60 percent appeal             
 the denial.  Of that 60 percent that appeal, approximately 50                 
 percent of them are ultimately approved.                                      
 SENATOR SALO understood that and emphasized that the most important           
 factor in making a decision for interim assistance is how many                
 applicants actually receive interim assistance and how many of                
 those ultimately qualify.  That information would provide an idea             
 of whether or not interim assistance is appropriate.  From 100                
 people that are receiving interim assistance, how many people are             
 denied and how many actually qualify?                                         
 CURT LOMAS did not believe the state was getting "burned" by anyone           
 because these are people who have been determined disabled by an              
 initial physician's examination which means that these people have            
 some inability to function.  The ultimate question is whether or              
 not these individuals meet Social Security's very narrow definition           
 of disfunction.  He could not speak to how many interim assistance            
 payments are made to people who ultimately do not qualify versus              
 those who do qualify because that approach has never been taken.              
 CHAIRMAN GREEN said that it would be in the amount of 36 or 40.               
 SENATOR MILLER questioned why some people were being denied if Mr.            
 Lomas did not believe that anyone was getting "burned."  CURT LOMAS           
 clarified that ultimately some of these people do not qualify, but            
 they are all sick.                                                            
 SENATOR MILLER asked how much money would not be recovered because            
 these people received interim assistance and then were ultimately             
 determined ineligible.  CURT LOMAS said that was a question he                
 could not answer without paper and a calculator.                              
 CHAIRMAN GREEN inquired as to the average length of time a person             
 would be in that phase.  CURT LOMAS did not know.                             
 Number 435                                                                    
 SENATOR MILLER expressed disbelief that Mr. Lomas did not know the            
 average length of time between an appeal and the final                        
 determination.  CURT LOMAS ensured the committee that he had that             
 information in the office, but he did not have it with him now.               
 JIM NORDLUND said that he could get that information by the end of            
 the day.  Mr. Nordlund specified that Governor Hickel's veto letter           
 did state that 60 percent of those denied were ultimately                     
 determined to be eligible upon appeal.                                        
 JIM NORDLUND stated that the final problem with the bill is the               
 statewide permanent application of some of the bill's projects                
 which is not prudent.  Those projects are untested, may be too                
 expensive, and they may not achieve the intended results.                     
 CHAIRMAN GREEN asked if everything needed to be a pilot or                    
 demonstration project.  JIM NORDLUND noted that he had handed out             
 a sheet which listed which projects the division believes should              
 not be done statewide and which should.                                       
 SENATOR LEMAN commented that a good idea, a crime stopper fraud               
 control, had been suggested at the previous Saturday hearing.                 
 Welfare recipients themselves seemed to be excited about that.  He            
 felt that the crime stopper approach to fraud control should be               
 considered.  In reference to the division's opposition to rateable            
 reductions, Senator Leman pointed out that the numbers have not               
 declined.  The numbers have increased; this is the highest and                
 fastest growing area of the state budget.  He emphasized that the             
 legislature ultimately budgets dollars and total amounts, not unit            
 JIM NORDLUND noted that there is a difference between the amount of           
 benefit paid and the number of people on the caseload.  The                   
 governor's approach attempts to reduce the caseload in order to               
 reduce the state's budget.  For the people who remain on                      
 assistance, the determination of the adequacy of the benefit level            
 is necessary.  He explained that one of the important factors                 
 affecting case loads is the economy.  If the economy falters then             
 case loads would rise which would impact the state budget.  The               
 division wants to reduce the welfare payments in the state budget             
 by getting people off the case load and into a permanent private              
 sector job.                                                                   
 SENATOR ELLIS asked if the previous rateable reduction used the               
 rationale that the cuts would lead to a decrease in the case load.            
 SENATOR LEMAN said that the goal was to decrease the total cost.              
 Government should not be doing this in the first place; more should           
 be done in the way of private compassion rather than government               
 programs.  People should become actively involved in needy people's           
 SENATOR ELLIS asked if it should be a law or should it be                     
 voluntary.  SENATOR LEMAN asserted that it should be voluntary.               
 SENATOR ELLIS asked what would happen if not enough people do                 
 become active privately.  SENATOR LEMAN stated that was the                   
 difference between their two philosophies.  Senator Leman                     
 identified Senator Ellis' philosophy as saying that government                
 should offer a solution in case enough people do not help out                 
 privately.  Senator Leman said that people need to do it and the              
 legislators need to make it happen.                                           
 Number 514                                                                    
 DEBORAH CRAIG, Director of the Project Career Course which                    
 facilitated the Project Independence, stated that she would like to           
 offer some basic information regarding Project Independence.  She             
 pointed out that she was not present to influence any legislation.            
 She has been involved with the AFDC population for approximately 10           
 years.  She informed the committee that for the last six years she            
 has facilitated a job training program, Project Career Course.                
 Last year a multi-agency effort helped develop Project                        
 Ms. Craig explained that serving an exclusively AFDC population               
 proved to be extremely labor intensive; staff needs were greater              
 than previous job training programs.  She informed the committee of           
 the findings of the demonstration project with which she was                  
 involved.  The program served people with an average age of 29 who            
 were primarily women.  The program served a 40 percent minority               
 population, 60 percent of the program consisted of high school                
 dropouts.  Although only 20 percent of the program participants               
 needed GEDs, overall participants needed preparatory work for                 
 training and employment.  Almost 90 percent needed basic computer             
 Ms. Craig pointed out that she was surprised to find a high                   
 incidence of mental health issues that were not expected nor for              
 which they were prepared.  She noted that 1 out of 10 Americans is            
 alcoholic and 1 out of 9 Alaskans is alcoholic which is an issue.             
 She explained that 29 percent of the students were impacted by                
 alcohol and not necessarily by their own use.  Those students were            
 often impacted by alcohol use in their families.  That information            
 seems to correlate with the finding that 28 percent of the students           
 were impacted by domestic violence, physically and emotionally,               
 during the semester training was provided.                                    
 Ms. Craig also seemed surprised at the amount of health issues that           
 were not anticipated; 33 percent of the participants had health               
 issues.  She specified that this information does not imply that              
 all AFDC recipients have mental health and health issues, but they            
 were issues that arose.  She noted that students averaged a three             
 year full-time work experience which would allow them to move back            
 into the work force.  However, the range was from almost nothing to           
 three years work experience which lead to the development of a                
 multi-tiered process which addressed the various levels of need.              
 All this information indicates the need for increased staffing.               
 CHAIRMAN GREEN requested a copy of that information.  She stated              
 that she intended to move this bill out of committee today.                   
 Number 580                                                                    
 SENATOR LEMAN moved that CS SB 98 (HES) be moved out of committee             
 with individual recommendations and accompanying fiscal notes.                
 SENATOR ELLIS objected and asked that Chairman Green clarify the              
 fiscal note of this committee.                                                
 TAPE 95-26, SIDE B                                                            
 Number 583                                                                    
 CHAIRMAN GREEN said that there would be a fiscal note, but that it            
 had not arrived yet.                                                          
 PORTIA BABCOCK clarified that the zero fiscal note was present                
 because the committee had not received any fiscal notes.  CHAIRMAN            
 GREEN anticipated receiving the fiscal notes in Finance.                      
 SENATOR ELLIS interpreted that as meaning that the cost of the                
 proposals were not known which did not allow discussion of the                
 relative merits of particular proposals.                                      
 SENATOR SALO spoke to her objection.  She had hoped and had                   
 formerly requested that the committee review the governor's bill at           
 the same time because the meshing of ideas of both bills would have           
 created the best legislation.                                                 
 Upon a roll call vote, Senators Leman, Miller and Green voted                 
 "Yeah" and Senators Ellis and Salo voted "Nay."  Therefore,                   
 CS SB 98 (HESS) was passed out of committee.                                  
 There being no further business before the committee, the meeting             
 adjourned at 11:05 a.m.                                                       

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