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. Co-chairman Halford directed that CSSB 98, Version "N," dated 4/10/96, be again brought before committee for continued sectional review. SENATOR LYDA GREEN directed attention to Page 13 of the draft and commenced review of "Disqualifying Conditions." [Tape malfunction. There is no recording for this portion of the meeting. Minutes reflect transcription of shorthand notes.] Co-chairman Halford referenced language at Page 15, line 19, relating to "a crime that is classified as a felony" and asked what would happen if serious class-A misdemeanors were added. CURT LOMAS, Welfare Reform Program, Division of Public Assistance, Dept. of Health and Social Services, explained that the wording was precisely taken from federal welfare reform language. He said he did not know whether the state could be more restrictive. Senator Green next noted subparagraphs (1), (2), and (3) at Page 16, lines 17 through 19, and advised that they relate to fraud. She further pointed to application process requirements set forth on Pages 16 and 17. Directing attention to Page 18, subsection (3)(c), Senator Green advised that provisions relate to seasonal workers. Co-chairman Halford referenced the list of utilities within subsection (B), suggested that a telephone does not appear to be as basic as other services listed within the section, and suggested that it be flagged. [Tape malfunction was corrected at this point. Remaining minutes reflect transcription of the tape recording of the meeting.] Referencing Page 19, Senator Green explained that the diversion program is the same as HB 78 and the Governor's bill. In the proposed draft, however, it has been restricted to adults. Minors had previously been included. The program allows individuals to receive a lump-sum payment to ensure that they will not be "going on to the full benefit program." Language relating to assistance to minors at Page 20, line 20, was taken from HB 78. The family self-sufficiency plan set forth on Page 21, commencing with line 11, will be part of the intake and evaluation of those coming into the program. It will involve a plan with benchmarks, time limits, conditions that must be in place, and how compliance will be achieved. Page 22 language relating to participation in work activities was taken directly from federal law. The emphasis here is on work. Provisions at Page 23 reflect existing law. Directing attention to Page 24 language concerning agency collaboration, Senator Green advised of instances when the legislature had need of more information than is currently provided. She further noted that temporary positions involved in the effort are exempt. Interagency efforts are also to be devoted to job training and development. Senator Green next referenced Page 25 and noted that a proposed Amendment would remove Federal-State Cooperation language commencing at line 6. It is considered to be "too loose." It gives the department too much authority. Referencing the Alaska Native Organizations' Family Assistance Program provisions commencing at Page 25, line 31, Senator Green advised that the commissioner of the Dept. of Health and Social Services would speak to the issue. Senator Green indicated that the provisions may ultimately not be needed. The Senator referenced provisions for establishment of an emergency account per language at Page 26 and advised that inclusion should be a finance committee decision. Language relates to provisions under the new reform act whereby the department may receive additional funds from the federal government, and those funds may not all be spent within a particular fiscal year. The department will speak to this issue. Page 27 language, relating to Appeals and Dispute Resolution, raises questions regarding department adoption of regulations establishing the informal dispute resolution process. Senator Green advised that she did not know whether a procedure is presently in place for hearings or if it is necessary to adopt a new process. This area requires clarification. Senator Green advised of a proposed amendment which will relate to Sanctions and Recovery of Costs at Page 27. Provisions deal both with recipients who refuse to cooperate as well as those who receive benefits to which they are not entitled. Civil action is available via subsection (d). Definitions set forth at Page 28 include terms not previously defined. Senator Green referenced subsection (7) and noted drafter inclusion of the word "unemancipated." A proposed amendment would remove the word. Senator Green next advised of numerous technical changes involved in changing the name of the Aid to Families with Dependent Children to the Alaska Family Independence Program. Senator Green referenced Section 13, Page 30, and explained that the language was provided by the Child Support Enforcement Division. END: SFC-96, #78, Side 2 BEGIN: SFC-96, #79, Side 1 The interest rate presently charged in computation of arrearages is 12 percent. The division has asked that it be reduced to 6 percent. Senator Randy Phillips noted need for closer review of the request. Senator Green read from backup material indicating that, for many years, the 12 percent rate was reasonable given the prevailing rate at that time. However, a rate of 6 percent per year better reflects existing rates. Directing attention to Page 31, Section 15, Senator Green noted language from HB 78 relating to participation by both sets of grandparents in support of a child born to minor parents. The responsibility remains in effect until one of the parents reaches the age of 18. The parents of the minor mother are more often involved in support of the infant. This language would provide some balance to that support. Section 24, at Page 33, was also requested by CSED. It relates to correction of clerical and administrative errors by the agency. Correction of miscalculations of arrearages is presently very cumbersome. Section 25 language relating to adverse action against a delinquent obligor's occupational license was in both HB 78 and the Governor's bill. It provides for issue of a temporary license in instances of arrearages. A process is established by which the obligor may work with the agency to develop a plan for repayment. Provisions cover occupational and driver licenses. This effort would require a network between CSED and licensing agencies. The bill specifies a 150-day window in which the obligor must either pay the arrearage, establish a payment plan, or request an administrative hearing. Senator Phillips questioned CSED ability to take on this additional task when the agency has yet to accomplish its primary purpose. Senator Rieger asked if the provision is required by federal reform. Senator Green responded, "This and more is in federal law--in the federal reform act." Section 26 incorporates contractors that administer grants within bill provisions. Section 30, Page 46, relates to day-care benefits. The only substantive change is removal of the word "net" (line 6) to bring language into conformity with federal law. Senator Green next directed attention to Page 47, line 23, and noted addition of the following: or a federal program designated as the successor to the aide to families with dependent children program. Referencing Page 49, line 13, Senator Green noted need to add "and legislature" following the word "governor." Co-chairman Halford asked if provisions within Sec. 35, at Page 47, reflect federal law. Senator Green responded affirmatively. Curt Lomas again came before committee. He explained that current federal law contains a requirement for the language. All versions of the personal responsibility act, including those being considered by Congress, have a requirement that the state establish rules which restrict the use of public assistance case information to purposes specifically related to program administration. Co-chairman Halford asked if availability of the information to Legislative Budget and Audit and individual legislators would violate federal law. Mr. Lomas said Legislative Budget and Audit currently conducts program audits. He said he was unfamiliar with what level of access the division has at the present time. Referencing statutory citations slated for repeal per Page 48, Co-chairman Halford requested a list of repealers. Senator Green remarked that the existing AFDC program and the Jobs program (AS 47.25) constitute the majority of the citations. She said she would subsequently confirm that repeals are limited to those programs. In concluding her review, Senator Green referenced effective dates listed on Page 51. She noted language within Section 54 allowing for enaction following federal law changes, if new federal law is forthcoming. Co-chairman Halford took exception to portions of the bill relating to Alaska Native Organizations' Family Assistance areas, suggesting that, "That's a governmental function that will create Indian country." Senator Green responded, "There's no opposition to removing that section . . . ." Co-chairman Halford added that there are benefits in some of the federal provisions. He said there was nothing wrong with using the Indian Self-Determination Act to get local entities--the closest entities to the people--to make decisions. The question is, If any of the entities . . . on the list . . . are now recognized as tribes, and we authorize them to provide a governmental function . . . defined by a service area, we're walking into a trap on the next issue down that road. As long as the twelve entities listed at Page 26 are incorporated under the laws of the state of Alaska and do not have a tribal identity, they are probably the best entities to do the work. Co-chairman Halford voiced his understanding that federal law provides benefits to the state at a higher rate of reimbursement for having these entities perform the functions. Senator Green subsequently advised that the entities listed at Page 26 are all incorporated under the laws of the state. Language within the bill was also reworded to delete the reference to tribes. The Senator further noted provisions within subsection (c) which require the listed Alaska Native organizations to waive any claim to sovereign immunity. Co-chairman Halford voiced his understanding that listed entities would be providing services to all residents of their areas, both Native and non-Native. A reading of the bill indicates that service would only be provided to a "racially defined constituency." KAREN PERDUE, Commissioner, Dept. of Health and Social Services, explained that under present language, the organization would write a plan and apply for the federal portion of the AFDC program. Subsection (b) would allow the state to participate in that planning. Funds received from the federal government would cover only racially defined members. That would not prohibit the state from contracting with the organization to provide other services. Further discussion of operation of the program followed between Commissioner Perdue and Co-chairman Halford. The Co-chairman questioned legislative ability to appropriate to a racially defined function. He suggested that the separation of the program and service of two classes of recipients would cause problems. Commissioner Perdue concurred in concern. She said that when the Governor expressed his views on the issue, he said it was important that program benefits be comparable. That does not mean they have to be exactly the same. The intent is to get local entities to design programs that work in their communities. Co-chairman Halford reiterated concern that the proposed arrangement would create a situation where the program at Bethel would provide a different benefit to a Bethel Native than it does to a Bethel non-Native. That appears to raise equal protection arguments the court system will not tolerate. Commissioner Perdue pointed to ongoing WIC program administration by the Tanana Chiefs Conference on a non-discriminatory basis. Senator Sharp referenced language within subsection (b), Page 26, and voiced his belief that, as written, it allows for a racially defined program. He suggested that removal of "Alaska Native" within the subsection might cure the problem. Commissioner Perdue voiced her desire to create programs that work locally and do not pit one person against another. The commissioner stressed need for the department to work with listed organizations. She expressed concern over potential for a tribe to write its own plan, apply for the federal share, and receive the funding. Co-chairman Halford voiced his understanding that the state share provides the incentive to work cooperatively with the department. The commissioner concurred. Further discussion followed between Co-chairman Frank and the commissioner regarding operations of the federal block grant. Co-chairman Halford voiced additional concern regarding broad language and authorities as well as the tethering of occupational licenses to support payments, because of CSED's past performance. Co-chairman Halford announced his intention to continue review of the bill at 3:00 p.m. the following afternoon. He then asked that the sponsor and department representatives speak to the packet of proposed amendments. Senator Green directed attention to the first amendment and noted that it relates to transitional assistance. Commissioner Perdue explained that the department presently authorizes 12 months of child care after an individual leaves AFDC. Testimony at statewide hearings indicated that people would leave welfare much faster if they had medical and child care. The amendment would extend periods of transitional assistance to 24 months for day care. It would also extend Medicaid medical care for children for an additional year. The cost of the Medicaid extension for the first partial year would be $150.0 in general funds to be matched by federal dollars. Co-chairman Halford voiced his understanding that Medicaid would cover the parent for 12 months and the child for 24. The commissioner concurred and added that the child care portion would cost $700.0 for the first full year. END: SFC-96, #79, Side 1 BEGIN: SFC-96, #79, Side 2 Further discussion ensued regarding changes to the program intended to discourage individuals from going on welfare for a period of time in order to obtain extended medical benefits. Additional discussion followed concerning the voucher system for child care and calculation of costs per child. Mr. Lomas advised of a typical cost of $450 a month. In response to a question from Co-chairman Halford regarding numbers associated with 185 percent of the poverty level for Alaska, Mr. Lomas advised of $2,501 a month gross income for a family of three. Senator Rieger expressed a desire to delete language relating to 150-day temporary license provisions. He said he would be more comfortable with establishment via regulation, if such a provision is mandated by federal law. Co-chairman Halford voiced a desire to delete the entire license section. He acknowledged that the federal government might impose the requirement. Senator Randy Phillips referenced language relating to grandparent liability (Page 31) and quoted the following concern raised by a constituent who practices family law: Teenagers who do not want to follow household rules can easily squeeze into one of the exceptions and begin collecting child support based on all four of their respective parents' income . . . . SHIRLEY DEAN, Juneau Office, Child Support Enforcement Division, Dept. of Revenue, came before committee. She advised that if the teenage mother voluntarily leaves her home, her parents would not be obligated, but the parents of the infant's teenage father would be. Responsibility for non-custodial parenthood would be transferred to the father's parents. Senator Green noted that grandparent responsibilities were included within HB 78 via a floor amendment in the House. Co-chairman Frank asked if paternal grandparents would have to provide support if the teenage mother resides with her parents. Ms. Dean responded affirmatively and advised that the reverse would be true if the teenage mother was living with the teenage father's parents. The attempt is to equalize responsibility between both sets of parents. Lengthy discussion of grandparent provisions followed using a number of different scenarios. Additional discussion ensued regarding the two-year bridge provision and the five-year limitation on the program. Co- chairman Halford suggested that the committee might wish to include sunset provisions for the two-year bridge. Senator Green cautioned that a two-year sunset might not allow sufficient time. Mr. Lomas reiterated that current law provides a 12-month transitional period. Provisions within the proposed bill would extend the program for an additional 12 months. The program is not new but rather an extension of an existing program. Co-chairman Halford voiced his understanding that the fiscal note only covers the extension. Mr. Lomas concurred. Co-chairman Halford announced a work session on the bill commencing at noon the following day. He advised of intent to have a proposed committee substitute available for review by 3:00 p.m. Senator Phillips voiced intent to prepare an amendment to remove provisions relating to grandparent responsibility. He also concurred in Senator Rieger's proposed change to licensing provisions. Co-chairman Halford expressed a preference to remove both provisions. Senator Green advised of a proposed amendment providing for CSED license review to become effective with implementation of federal welfare. ADJOURNMENT The meeting was adjourned at approximately 6:00 p.m.