CS FOR SENATE BILL NO. 51(FIN) "An Act relating to contracts for the provision of state public assistance to certain recipients in the state; providing for regional public assistance plans and programs in the state; relating to grants for Alaska Native family assistance programs; relating to assignment of child support by Alaska Native family assistance recipients; relating to paternity determinations and genetic testing involving recipients of assistance under Alaska Native family assistance programs; and providing for an effective date." KATHERINE FARNHAM, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, related the background of the Temporary Assistance for Native Families (TANF) program. She described the results of the Welfare to Work bill. Twelve regional native non-profit organizations and Metlakatla were designated to run temporary assistance programs. State funds were made available along with the federal funds. She explained the Alaska Native Family Assistance Program and the sunset date. SB 51 would allow this program to become permanent and would expand it from the four initial organizations, to the thirteen designated by the federal government. The end results have been great successes with a 66 percent caseload reduction. 1:52:39 PM Ms. Farnham addressed the fiscal notes. She described the efforts of Cook Inlet Tribal Council to take on 600 new families. This would change the funding scenario starting July 1. There would be a reduction of $2 million in general fund match, as well as a reduction of $2.8 million in the federal receipt authority. She referred to a chart "FY06 Budget Impact for State-CITC Transfer", which showed the effects of the fiscal notes (copy on file.) The federal share goes directly to Cook Inlet and reduces the state's federal temporary assistance receipts. The state has to match 75 percent of the federal block grant with maintenance of effort general funds. As the federal floor lowers, so does the state match. She highlighted the advantages of the Cook Inlet program. Maniilaq and Bristol Bay Native Association are also planning to start up their own programs. She urged passage of SB 51. 1:57:19 PM Representative Kelly noted that tribal governments are not recognized in Alaska. He asked why they are included in this funding. Ms. Farnham explained that the language used, "tribal TANF program", is from the federal level, and in Alaska they are regional Native non-profit programs. Each receiving grantee waives sovereignty immunity. Representative Kelly asked if it has no impact on the sovereignty issue. Ms. Farnham replied yes. Representative Kelly suggesting calling them 501(c)(3)'s. Ms. Farnham replied that they are. Representative Kelly maintained that it is a misuse of federal language. Ms. Farnham pointed out that in the actual statutory language "regional Native non- profits" is used. 2:00:33 PM Representative Croft stressed that Alaska does recognize tribes, just not as governmental entities, for the purposes of receiving federal monies. Representative Kelly expressed concern about allowing Indian Reservations to be established in Alaska. 2:02:20 PM Ms. Farnham noted that "tribal" is used appropriately in the bill. Representative Kelly clarified that he is not commenting negatively on the merits of the program. 2:03:29 PM Representative Holm asked why Metlakatla is mentioned separately. Ms. Farnham explained that it was a late addition to the program. She noted that not all regional non-profits have the capacity to participate in a program. Representative Holm asked if Sealaska Corporation is a participant. She replied that Tlingit & Haida serves this area and the state serves Metlakatla. Representative Holm noted that Metlakatla is a federal reservation. 2:05:33 PM In response to a question from Co-Chair Chenault, Ms. Farnham reported that "fair and equitable" is a process that examines caseloads for what the state currently spends on those families for work services, child support, etc. Co- Chair Chenault asked if that is for the three largest grantees. Ms. Farnham replied it is for the three current grantees and will be used for Cook Inlet, also. Co-Chair Chenault asked if race is a factor. Ms. Farnham replied that the aim is to assure that native nonprofits can serve the families in a way that is at least as well financed as when it was run by the state. 2:08:14 PM MOLLY MERRITT DUREN, EMPLOYMENT & TRAINING SERVICES, COOK INLET TRIBAL COUNCIL (CITC), pointed out that her program has been providing case management services for eight years. She referred to the handout "Cook Inlet Tribal Council" (copy on file.) She described the reductions since the 1994 caseload. She related the mission of the tribal council and the services they provide. She indicated that CITC is ready to assume this responsibility. 2:11:44 PM Representative Hawker endorsed the program and thanked Ms. Merritt Duren for her hard work. 2:12:34 PM DON SHIRCEL, DIRECTOR OF FAMILY SERVICES, TANANA CHIEFS CONFERENCE, spoke with pride about the work done by the tribes of the interior. He testified in support of SB 51 because it allows for continuation and expansion of these programs. 2:15:48 PM Co-Chair Chenault asked for an explanation of fiscal note #1 by the Department of Health and Social Services. He wondered if some of the money is federal money that goes back to the grant recipient. He suggested there might be general fund savings. He wondered if any state employees would be lost. 2:17:40 PM Ms. Farnham responded that some federal money is leaving the department's budget and going directly to Cook Inlet. She explained the transfer and real savings. The first component is the Native Family Assistant Program, which increases by $4 million. She pointed out that each fiscal note has a summary. Ms. Farnham explained that the second fiscal note, the work services component related to case management, shows a reduction of $1.3 million because of a move from grants to contracts. Ms. Farnham explained that the third fiscal note relates to childcare benefits. It will no longer be spent directly, but will be part of the Cook Inlet program. This note does the best job of integrating the whole story. It shows the reduction of federal receipts because of high performance success. The match is at 75 percent. It is a $5.7 million general fund reduction. 2:24:16 PM Representative Croft questioned that number. Ms. Farnham replied that the net numbers show that the general fund reduction is actually $2 million. Cook Inlet is the largest one that will be operating this way. Representative Croft asked how the difference between the $5.7 million and the $2 million is reconciled. Ms. Farnham replied that the largest difference is that $3.6 million is being transferred to the native family assistance component. Representative Croft summarized that it is not a savings of $5.7 million. Ms. Farnham replied that the $2 million is the net savings. Representative Foster asked how non-native families are served in rural areas. Ms. Farnham replied that there is a contract to serve both natives and non-natives. She termed it valuable to work with AVCP as a partner. This may work for Bristol Bay as well. Representative Foster asked if there is an administrative fee. Ms. Farnham related that there is an acceptable small fee. It funds only two things: cash benefits to the family and administrative expenses. 2:28:16 PM Representative Holm noted that CITC numbers have gone from 1,000 to 600. He inquired if there is true savings in employment and if those in state employment are considered unbiased and those in corporations, biased. He wondered if state and federal funds should be put into facility providers that would have a bias. Ms. Farnham addressed the impact to state workers. She reported that there would be no reduction in state employees and personnel. Caseloads are changing post-welfare reform dramatically, and a study needs to be done to track the increases and decreases. Some staff rearrangements are being considered. The department will do an analysis to better understand the trends. Ms. Farnham addressed the fairness issue. She explained that native corporations use multiple funding strands and focus them on the family. The department is trying to integrate services more like Cook Inlet. The native organizations can provide a more integrated program. The department is looking at marketing family centered services. 2:35:23 PM Representative Holm expressed appreciation for the presentation. He addressed a concern about an increase in staff when services are reduced. Ms. Farnham explained the success of the program depends on taking the savings and putting it back into services. Some of the families on public assistance still have serious needs, and at the end of the 5-year time limit would need more resources. Another reason is that the agency receiving the funds can use them in a variety of ways, some of which need more employers. 2:39:08 PM Representative Kelly asked whether a person employed in a job out of the region counts, in areas with a 50 percent unemployment rate. Ms. Farnham responded that employment is employment; the end game is employment and self-sufficiency. Representative Kelly asked for statistics on out-of-region jobs. Ms. Farnham said they are not tracked once they exit the program and are employed. 2:41:37 PM ELLIE FITZGARRALD, PROGRAM DEVELOPMENT, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, explained the successes of the Leaver's Study. She related that there is no data kept after six months. Representative Kelly suggested those would be interesting numbers to track. 2:43:05 PM Representative Kelly asked about the permanence of the program. He wondered if the direction is wrong due to the loss of federal funds. Ms. Farnham clarified that this federal program is not on the "down slope" and has wide national support. She spoke about safeguards and explained that Senate Finance did add language to the bill that would protect Alaska from backfilling future holes. She referred to page 9, line 19, which addresses this concern. Each grant is negotiated annually, and the program is not destined to be cut. Representative Foster thanked the department for the presentation. He MOVED to report CSSB 51 (FIN) out of Committee with individual recommendations and the accompanying fiscal notes. Representative Kelly OBJECTED. He explained that he wants the word "tribal" out of the statutes. Ms. Farnham indicated that tribal is only referenced in conjunction with the federal tribal assistance program. 2:47:26 PM Representative Croft noted that the 12 references to tribal in the bill are all in the context of a federally approved tribal family assistance program. Representative Kelly referred to page 3, line 17, a reference to operating a tribal assistance program. He suggested "federal" should be added. Ms. Farnham explained the meaning of the line, noting that the intent is clear. Representative Foster noted that it is easy to confuse sovereign and tribal. He related that the 13 native corporations are tribal organizations. Representative Kelly WITHDREW his objection. There being NO OBJECTION, it was so ordered. 2:50:16 PM At ease. 2:52:03 PM