SB 116-AK TEMP. ASSISTANCE PROGRAM AMENDMENTS  MR. JIM NORDLUND, Director, Division of Public Assistance, Department of Health and Social Services (DHSS), said the original bill was introduced by the governor and dealt with one provision that had been removed from SB 116, with the concurrence of DHSS. The governor introduced the bill because there was a 60-month limit to client benefits under the Alaska Temporary Assistance Program (ATAP). This program was created with the welfare reform legislation that passed five years ago. Although ATAP contains a 60-month limit to benefits for clients, 20 percent of those individuals may be exempt from that limit. Congress recognized that there would always be people on welfare who would not be able to support themselves and would need to receive benefits beyond the 60-month limit. The problem is that the 20 percent exemption applies to the current caseload rather than the caseload "as it was way back when." And since the caseload had been lowered from 12,000 families to 5,000 families, the number of exempt families is much smaller. DHSS has a problem with that and Senator Green said the HESS committee would take that issue up next year. The urgency would be greater next year because the first families will be hitting the five-year limit in July 2002. MR. NORDLUND noted that Section 2 of CSSB 116(HES) dealt with a two parent court case that DHSS lost. He explained: During the summer, DHSS reduces benefits for two parent families by half, a policy choice made by the legislature and the administration five years ago. That policy was developed because it was felt that two parent families were better able to work during the summer months because there was more employment in Alaska during the summer and because one of the parents would be able to stay home with the children. MR. NORDLUND said that when language regarding two parent families was put into the new law, antiquated language from the AFDC law was carried over saying benefits would be provided to two parent families. The court looked at that language literally and said that DHSS had to do an eligibility determination of two parent families to determine who was the principal wage earner and what the unemployment status was of that person. It was the intent of the legislature and the administration to say all two parent families would have their benefits cut during the summer, except families with one parent who was incapacitated. But the court did not look at it that way and said that DHSS had to do the eligibility determination. The determination would have a cost attached and there would be some two parent families receiving full benefits through the summer in a way that would be unrelated to the intent of the legislation. MR. NORDLUND noted that Section 2 strips the original bill of that antiquated language and brings the legislation back to the original intent. If SB 116 does not pass, DHSS would have to do the eligibility determination this summer and would probably end up paying benefits to some families who would otherwise not be eligible. CHAIRMAN TAYLOR asked about Section 3. Number 690 MR. NORDLUND said under ATAP, all families are required to develop a family self-sufficiency plan, which is a plan that charts their course from welfare to work. The original law exempted families where one parent was disabled or incapacitated. DHSS thinks it is a good idea for all families to have a self-sufficiency plan because it assists DHSS in helping families, even disabled families, improve their situation in life. SENATOR THERRIAULT asked if that was just the exception from the self-sufficiency plan. MR. NORDLUND said that is correct. CHAIRMAN TAYLOR asked if Section 4 is a transition section set up to allow each of the others to go into effect so the department could draw up new regulations. Mr. Nordlund indicated that is correct. CHAIRMAN TAYLOR asked if Sections 5 and 6 are effective date clauses. Mr. Nordlund indicated that is correct. SENATOR THERRIAULT asked if Section 4 speeds up the process rather that waiting for the statutes to become effective. Mr. Nordlund said that is correct. CHAIRMAN TAYLOR asked if they even need Section 1 at this time. MR. NORDLUND replied that Section 1 is an attempt to conform with federal law. CHAIRMAN TAYLOR asked if that is the section the Senate HESS Committee would take up next year. MR. NORLUND indicated that was not correct; that the section they would take up next year was already taken out of the original bill. He said they are now looking at the committee substitute. CHAIRMAN TAYLOR said he thought the first section talked about the five year program. MR. NORDLUND replied that it was related to the section that was stripped out of the bill, but federal law says that anybody who is living in an Alaska Native village is exempt from the five-year limit. "That's a provision in federal law." MR. NORDLUND explained that our state law does not have such a provision and so that section conforms state law to federal law in that regard. CHAIRMAN TAYLOR asked if this exempts them from the 20 percent rule. MR. NORDLUND responded, "Yes." CHAIRMAN TAYLOR said that by exempting them for five years, the administration doesn't have to find a job for any person living in a Native village. MR. NORDLUND responded: It is a two-edged sword, I think. This provision is not something that we necessarily originally promoted in the federal law…. Even the Native community would tell you that they see this as good and bad. The fact of the matter is that there aren't jobs in so many of those Native villages and cutting off individuals from public assistance when there's absolutely no hope of employment is very harsh. CHAIRMAN TAYLOR asked about the qualifications of a Native village. MR. NORDLUND replied, "The reference in the federal law is to ANCSA, which recognizes the Native communities in the state." CHAIRMAN TAYLOR asked if it was only the village corporations that would apply. MR. NORLUND responded, "Locations or communities that are recognized in the federal law as being Native villages under ANCSA." MR. NORLUND said there is a list of those communities in committee packets. Number 1038 SENATOR COWDERY asked why the term "gainful activity" was used in Section 2. MR. NORLUND replied that was a good question and he didn't know why they couldn't use the word "employment" because that is what it's intended to mean. CHAIRMAN TAYLOR said he thought it might be defined somewhere in Title 47. SENATOR COWDERY asked if increased employment in Alaska and welfare have remained in proportion to each other. MR. NORDLUND replied, "Definitely. The fact that we've had a policy change, first of all, is a big piece of it, that we're now requiring clients to look for work." He said that the fact that the economy has been so good in Alaska has been a huge contributor to the fact that the welfare cases have come down so much across the nation. Another reason for success is that basically the legislature and administration have been willing to put forward a budget that's necessary to help move folks into work - money for child care and case management. MS. KRISTEN BAUMENGEN, Assistant Attorney General, said: The term "gainful activity" is used in other places in this particular statute and so it is a kind of term of art that has been adopted in AS 47.27.015, AS 47.25.025 and AS 47.27.030. It was a part of the original ATAP bill. The term was used to describe general employment activities. There is a definition that's been generated in a substantial section in the regulations that address this. Using this term now would make it consistent with the other applications of the terms in the act." SENATOR COWDERY said that assumes the term was being used correctly in the other parts of the statute. MS. BAUMENGEN said she had a reference to the definition as it was generated in the regulations, if that would helpful. They indicated assent. SENATOR ELLIS asked if Mr. Nordlund had addressed the House's concern about an exemption for caretakers of disabled children. MR. NORDLUND replied: Yes, there was a discussion on the House side. The House version of the bill does have an additional exemption in here. The exemption you're seeing in this version brings it back to the status quo situation. That is, in a two parent family, we will exempt them from getting the two parent benefit cut in the summer months if one of the parents is incapacitated. The amendment that was added on the House side says that as well, if in a two parent family, if they have a child who has a severe disability, then that two-parent family is exempt from the two-parent benefit cut in the summer months. That is not in this version. SENATOR ELLIS asked what his position was on that. MR. NORDLUND said they were neutral on that addition by Representative Dyson. SENATOR ELLIS said he raised that as an issue for the committee to consider because there were some compelling examples, specifically the Jackson family from Pt. Baker. MR. NORDLUND said he had an amendment that they prepared for the House. CHAIRMAN TAYLOR said they wanted to make certain that that option is available. SENATOR THERRIAULT asked if the federal exemption was over the 20 percent for state exemptions. MR. NORDLUND answered that is correct. SENATOR THERRIAULT pointed out that language says, "The department shall disregard the months that are required to be disregarded under that federal law." He thought Mr. Nordlund explained that it was just a location-based exemption across the board. MR. NORDLUND replied: What we do as long as somebody is living in that exempt village, we simply do not count that month. We just stop the clock for those folks. If they move back to an unexempt village, the clock picks up again. Even though we consider stopping the clock for purposes of the way our computer system works, the Department of Law tells us it doesn't matter. From the state's standpoint, it still counts on the state clock. So, if they run up to 60 months, for the purposes of the state law, we have to count those folks within that 20 percent exemption category. This is just the terminology we use to say that we're stopping the clock for those families. SENATOR THERRIAULT asked if this was an example of lawful discrimination. MR. NORDLUND said he wasn't qualified to answer that question. SENATOR THERRIAULT explained: We're treating different groups of people differently, based on some reasoning. If we treat them differently, we've discriminated between the benefits one group can get that another group can't get. The Congress has found that there is justification for doing that and made that discrimination lawful. Is that a correct interpretation? MS. BAUMENGEN responded that this was based on federal law and the special relationship with Native American and the Alaska Native populations in the Welfare Reform law. She said: This language was generated after the time the state accepted its language for the ATAP program and it's a specific disregard that mandates in 'shall' language that the states disregard those months. SENATOR THERRIAULT asked if it treats individual Alaskans differently based on some criteria in federal law and this change to state law would make that acceptable. MS. BAUMENGEN responded, "Yes, it addresses all adults who live in an Alaska Native village." CHAIRMAN TAYLOR said, "Interestingly, a person need not be a Native Alaskan, but if you find yourself living in that area, you qualify." MS. BAUMENGEN replied that is correct. CHAIRMAN TAYLOR said to Senator Ellis, "If we conform [the amendment] by putting in page 1, line 13, that's the word 'activity' that we are seeking to modify. Is that right Kristen?" MS. BAUMENGEN responded that is correct. SENATOR ELLIS moved to adopt amendment , which reads as follows. AMENDMENT 1  Page 2, line 7 Following "activity":    Insert "or to be providing care for a child who is  experiencing a disability"  MS. NICOLE NELSON, Anchorage, said she supported the amendment on caretaker relatives of disabled children and had no further comments. SENATOR DONLEY said he didn't agree with the analysis that is contained in paragraph 3 of the sponsor statement that says Alaska sets an extremely excessive goal compared to other states regarding welfare reform. He pointed out, "I have seen several analyses that have appeared in national publications saying that we were the least aggressive on welfare of any state in the Union." CHAIRMAN TAYLOR said the fiscal note confused him and asked how it could be zero when, if this law was left unchanged, there would be greater savings. By changing the law, they are going to spend more. MR. NORDLUND explained the reason is: Any time the Alaska Temporary Assistance Program is changed, is because of the way the funding mechanism for the program works. We get a set block grant from the federal government regardless of what happens to the case load and regardless of what we do with that caseload, what kind of programs we're providing. Also, that's the federal side. On the state side, we're required to put up what's known as a maintenance of effort, 80 percent of the funding that we provided in 1994. So, essentially, the state amount is fixed, as well. You have a fixed amount of money, both federal and state to run this program and if the caseload goes down, basically what you do is you're freeing up money from the benefit side of the program to move over to services. In addition, what the legislature has done in the past few years is take a lot of those savings, which really are federal savings, using it to fund other programs in state government that are allowed under the TANF Program and there's been some general fund savings to the state in that way. As an example, we used to fund childcare with about $10 million from the general fund. With the savings of welfare reform, we've been able to move those federal funds over, supplant that, take the G.F. out and you get a budget savings that way. But the overall amount of money we have for the program is set. So, as the caseload goes down, we can shift the money over, but it's internal to the program. It doesn't really show up in the fiscal note. CHAIRMAN TAYLOR said they understand and commented that they do an accounting and, at the end of that process, they usually end up shifting some funds within the budgeting process. Number 1840 SENATOR DONELY said the sponsor statement, dated February 21, 2001, doesn't say what bill number it's referring to. MR. NORDLUND explained that this is the Governor's bill and it usually has the Governor's transmittal letter. He didn't think they had a sponsor statement, per se. SENATOR DONLEY asked if there were any parts of the sponsor statement that were no longer applicable to the committee substitutes that were produced. He asked for an updated sponsor statement. MR. NORDLUND said he would do that; but he didn't know that as a rule, they rewrite their transmittal letters. CHAIRMAN TAYLOR said he thought that would be a good idea since the bill had changed so much. SENATOR ELLIS moved to pass CSSB 116(JUD) from committee with individual recommendations. There were no objections and it was so ordered.