SB 98 - PERSONAL RESPONSIBILITY ACT A draft CSSB 98 (Fin), version "B," 4/16/96, was adopted. Amendment No. 1 was adopted and Amendment No. 2 was adopted with clerical corrections. Kelly Huber highlighted changes in the new draft. Discussion was had with Senator Green, Glenda Straube, Mike Tibbles, Kristen Bomengen, and Michael Johnson. Senator Phillips moved to delete provisions relating to obligations of grandparents. Senator Frank objected, and the motion was held for later consideration. Senator Phillips moved to delete provisions relating to license suspensions. The motion was pending when the meeting was recessed for the Senate floor session. Co-chairman Halford directed that SB 98 be again brought before committee for discussion and referenced a new draft CSSB 98 (Fin) (9-LS0692\B, Lauterbach, 4/17/96). KELLY HUBER, aide to Co-chairman Halford, came before committee to speak to major changes between the previous and the current draft: 1. The 3 percent ratable has been removed from the present version. 2. CSED provisions pertaining to forfeiture of licenses for child support arrearages remain in the bill with two stipulations: A. Provisions will only become effective if federally mandated. B. A two-year sunset provision has been added. Senator Zharoff asked if an individual who loses his or her license during the two-year period would get it back upon sunset of the provision. Co-chairman Halford responded, "It's the intention that they do." If the license is suspended, the suspension is lifted when the authority to suspend it is taken away via sunset. Senator Randy Phillips asked what would happen should the federal government mandate license forfeiture but the state does not. GLENDA STRAUBE, Director, Child Support Enforcement Division, Dept. of Revenue, advised that a penalty of 1 to 2 percent of all federal funds for AFDC would be applied against the state. KAREN PERDUE, Commissioner, Dept. of Health and Social Services, advised that the penalty would amount to $5 to $6 million. 3. Grandparent obligor provisions have been simplified within Section 41 to require determination by the courts. The court must specify, in writing, why it considers it to be appropriate to order a grandparent to pay child support. Senator Phillips advised that he had a problem with grandparent provisions, saying that they should be removed from the bill. 4. Section 50 contains new language relating to redetermination of assistance levels. Co-chairman Halford referenced interest in making welfare reform a "non-entitlement," per federal action. There was strong opposition to that from the administration. Section 50 represents a safety valve so that schedules are repealed three years hence. If there is no action to extend them, they are decreased if the total cost of the program is increasing. If the proposed program is successful in getting people off of welfare, the cost of the new program will not exceed the cost of the previous program. However, if the cost is increasing, schedules are reduced by the ratio of the cost increase in the first three years. In response to a question from Senator Sharp, Co-chairman Halford referenced a built-in increase (based on population) in the formula from the federal government. Senator Sharp voiced need for "some kind of fence around the state's portion to make sure it's no more than the fed's." The contributions should remain 50/50. Co-chairman Halford voiced his understanding that the department believes the federal share will remain steady or increase. He acknowledged that the provision suggested by Senator Sharp could be added to the current bill as a precaution. 5. The program has been renamed the Alaska Temporary Assistance Program. 6. The Alaska Native Organizations' Family Assistance Program at Page 25 has been reworked. Co-chairman Halford referenced a new provision requiring that the Metlakatla Indian Community waive any claim of sovereign immunity to participate in the program. There should be no sovereignty or tribal questions with the other organizations since they will be operating through non- profit corporations under state law. At this point in the meeting, MIKE TIBBLES, aide to Senator Lyda Green, came before committee to speak to remaining changes within the new draft: 7. Language dealing with time limits on benefits was taken from last year's HB 78 and inadvertently does not exclude some individuals that should be excluded, such as those with a mental or physical disability. The rewrite commencing on Page 11 provides a hold harmless provision for those individuals. 8. A two-year time limit on benefits has been inserted in provisions relating to the family self- sufficiency plan and participation in work activities. Mr. Tibbles directed attention to Page 21, line 15, and noted the following rewritten language: An Alaska temporary assistance program participant shall, after the participant's family has received a cumulative total of 24 months of assistance, or sooner, if assigned to do so by the department, participate in work activities . . . . The federal government has set out requirements for participation rates for job activities. The above language requires recipients to be in a work activity within two years. Senator Green added that the rewrite also brings provisions into conformity with waiver language. Senator Sharp MOVED for adoption of the draft CSSB 98 (Fin) dated 4/17/96. No objection having been raised, CSSB 98 (FIN) was ADOPTED. Co-chairman Halford next directed attention to proposed amendments. Kelly Huber explained that Amendment No. 1 would remove "compared to previous months" at Page 11, line 17. The drafter removed the language in another section of the bill and overlooked need for removal at Page 11 as well. The amendment would also change "if" to "when" at Page 16, line 23. Senator Phillips MOVED for adoption. No objection having been raised, Amendment No. 1 was ADOPTED. Co-chairman Halford next referenced Amendment No. 2. He explained that CSED provisions within a prior draft of the bill would have given the division the administrative ability to change an arrearage calculation. Amendment No. 2 redrafts that provision, but it contains language calling for action "upon a motion of the obligor." The Co-chairman said he would not give the division blanket ability to change an outstanding balance. Kelly Huber advised that the proposed amendment would be inserted as a new section between Sections 21 and 22. In response to a comment from Co-chairman Frank that language within subsection (c) of the amendment appears incomplete, Co-chairman Halford acknowledged need for addition of the word "opportunity" following the word "adequate" so that the subsection reads: (c) Before an order may be vacated under (a) or (b) of this section, the agency must send notice of the intended action to the obligor and the custodian and provide an adequate opportunity for the obligor and custodian to be heard on the issue. Co-chairman Frank MOVED for adoption of Amendment No. 2. No objection having been raised, Amendment No. 2 was ADOPTED. Senator Randy Phillips directed attention to Page 46, Section 41, and MOVED to delete grandparent provisions throughout the bill. Co-chairman Frank OBJECTED. He explained that he had no problem with the concept of grandparent responsibility. He expressed concern, however, regarding application of percentages associated with parental support to grandparents and suggested that a schedule would be preferable. Some limitation must be in place to gain support. Senator Sharp asked if support refers to support for both the minor mother and her child. Senator Green explained that a minor child does not qualify for benefits unless she is pregnant or has a child. The rate schedule is based on the parent and one. Under the new waiver provision and new comprehensive plan, the minor parent is required to live at home, in foster care, maternity care, or a supervised setting. Senator Sharp referenced language at the top of Page 47 and noted that the court can order child support payments not to exceed the amount that would have been awarded if the infant's parents (the juveniles) had the incomes of the grandparents. He then noted that the support obligation could be substantial if the grandparents have reached a point in life when they have an extremely good income. He then asked if the juvenile's income was considered. Senator Green responded that the teen parents are involved and are required to support their child. She stressed that, by law, the parents of the teen mother are already involved in her support. Language within the bill is a balancing mechanism for involvement of the paternal grandparents. It is anticipated that grandparent support would involve a "very narrow window of time until either of the teen parents reaches 18." Senator Sharp said he had no problem with equal liability for both sets of grandparents. He voiced concern about how provisions might be applied to teen runaway situations. Discussion of example situations followed involving teen parents and grandparents with widely different incomes. Glenda Straube advised of a support obligation calculated at 20 percent of income. She noted that the paternal grandparents would only be responsible for the grandchild. Co-chairman Halford suggested that, in the scenario presented, one of the families could greatly increase its income through support payments from the other family. He then asked who would control the money. Ms. Straube explained that the teen parents and their infant would be receiving AFDC benefits. Support payments would flow to the state as reimbursement of AFDC payments. She advised that the division presently collects 20 percent of income from material grandparents to cover the cost of AFDC payments to a minor mother and her child. Co-chairman Halford voiced his understanding that, as drafted, grandparent provisions apply to all custody situations rather than to AFDC situations alone. Ms. Straube said that the intent, when the request for inclusion was made, was to apply it only to AFDC. Senator Green stressed that involvement of paternal grandparents would entail a court procedure. Senator Sharp noted that bill language requires payment to "an appropriate person." Co-chairman Halford expressed concern that the adults in the household to which support is paid would receive the money rather than the teen parent or the infant. In response to a suggestion by Senator Green, Glenda Straube noted that the federal government has ruled that CSED cannot base child support orders on AFDC standards. Co-chairman Halford next inquired concerning visitation rights for grandparents, particularly those who "pay the bill." Ms. Straube explained that best interest findings on behalf of the child are vested in the court system. Discussion followed reiterating prior comments concerning living arrangement requirements for minor mothers. Senator Green pointed to a perception that present welfare law has encouraged minor parents to live independently in settings that, were they not the parent of a child, would not be legal since they are not of sufficient age to sign up for utilities and undertake lease obligations. Welfare reforms require that they live in situations with adult supervision and care and that they remain in school. END: SFC-96, #85, Side 1 BEGIN: SFC-96, #85, Side 2 Co-chairman Frank voice his understanding that grandparent support is for the grandchild, regardless of what living arrangement is made for the minor parents. The remaining issue is what is an appropriate level of support from both custodial and non-custodial grandparents. Glenda Straube explained that the court system has the authority to make exceptions to the 20 percent rule. Co-chairman Frank expressed a preference for specific language and an established schedule. KRISTEN BOMENGEN, Assistant Attorney General, Human Services Section, Dept. of Law, referenced language at Page 47, line 2, and noted that it says that the amount determined by the court should not exceed the amount that would be paid if the infant's parents had the income of the infant's grandparents. The language indicates that grandparent support should not exceed 20 percent. Senator Randy Phillips inquired concerning the definition of "grandparent." Glenda Straube voiced her assumption that it would be based on blood relationship. Lengthy discussion followed regarding the status of grandparents in divorce situations, joint checking accounts, and pooled assets. In response to suggestions from members that grandparent provisions be removed, Co-chairman Frank reiterated need for both maternal and paternal grandparents, rather than the state, to bear responsibility for support of the infant grandchild. He again stressed need for establishment of reasonable rates and urged that that approach be worked on. Senator Sharp took exception to the following sentence set forth at Page 47, lines 9 through 11: A grandparent ordered to pay child support under this paragraph is considered to be a child support obligor for the purpose of all laws, rules, and regulations relating to child support obligors. Co-chairman Halford advised that federal law would continue to impose that obligation even if the foregoing language was removed from the bill. He further voiced his understanding that "anything we give the court the agency can do, under federal law." Ms. Straube acknowledged that while the division did not feel it has authority to do "everything the court could do," recent conversations with the Dept. of Law indicates "that we may very well be able to." Senator Donley said he would not vote to remove grandparent provisions but agreed that the language needs to be fixed, and a definition of grandparent must be provided. Co- chairman Frank asked that the proposed amendment be held until later in the meeting to provide the administration an opportunity to develop alternative language. Senator Phillips subsequently agreed to hold his motion for removal of grandparent provisions in abeyance until later in the meeting. Discussion of lack of effectiveness of enforcement mechanisms associated with living arrangements for a minor parent followed. Senator Phillips directed attention to Section 22 (Pages 31 through 42) and MOVED to delete provisions relating to occupational licenses. Co-chairman Halford reiterated that provisions within the new draft only take effect if mandated by federal law and, if so effected, would only be in effect for two years. He voiced his belief that the provisions would create tremendous complaint problems. They will also increase enforcement and CSED collection problems. If the $2.7 million in anticipated savings is achieved through collections from those who do not want to lose their licenses, there might be impetus for continuation. Co- chairman Halford subsequently noted an error in drafting in the current version of the bill. He directed that a technical correction be made so that the two-year sunset would take effect based on the effective date of state law rather than the date of enactment of federal requirements. Discussion of application to various licenses followed. Glenda Straube explained that limited entry permits are not included because the division may already access income from the permits via processors or other fishing industry fee agents. For other types of licenses, the division has no access to the income. Senator Sharp voiced support for license provisions, if properly worded and mandated by federal law. He noted that obligors would have a substantial amount of time to work things out before the license would be revoked. Co-chairman Frank concurred in need for incentive to pay and keep current with child support. Senator Phillips remarked that the provisions would deny obligors the necessary licenses with which to make a living and pay support. Co-chairman Frank said that would not be the case. Obligors would have to address the arrearage situation and work things out. They would no longer be able to ignore support obligations. Senator Sharp noted that obligors working for wages have their wages garnished if they do not pay. These new provisions put licensed professionals on equal footing. Co-chairman Halford voiced need to review the exemptions on Page 37 prior to a vote on the motion for removal of license provisions. He then asked if bill language would meet federal law if exemptions remain listed. Glenda Straube said that federal law is not specific. It speaks to occupational, professional, driver's licenses, and recreational licenses. Alaska is already not in conformance. She said she did not know why certain exemptions were listed. Discussion followed regarding driver's licenses. Co-chairman Halford suggested that state law should be as general as draft federal law. MICHAEL JOHNSON, aide to Representative Davies, came before committee to speak to exclusion of vessel and commercial fishing licenses. He explained that a vessel license is not an effective tool "to get at the person that was really fishing." Agreements between CSED and the limited entry commission are strong enough to capture delinquent obligors. Responding to a question regarding the exemption for crew member licenses, Glenda Straube attested to sale of such licenses by fee agents throughout the state, particularly in rural areas. It would be too difficult to "work with all those little areas." Co-chairman Halford suggested that the issue would have to be faced to meet federal law. Both Co-chairman Frank and Senator Sharp expressed lack of support for exemptions. Co-chairman Frank said the issue has nothing to do with federal policy. People should simply pay their child support. Senator Rieger reiterated comments he made last year and recommended that CSED be split into two agencies: one to process child support payments for those who pay regularly and another to pursue enforcement against those who do not. Senator Green directed attention to statistics from states that have implemented a similar program. Those efforts have been extremely effective, and the number of actual revocations has been small. Senator Rieger referenced language at Page 31. line 29, and suggested that provisions relating to "obligors who are not in substantial compliance" should instead be applied to obligors who are in "sustained, chronic non-compliance." Kristen Bomengen noted that "substantial compliance" is defined in the bill. It applies to arrearages in excess of $2,500.00. Senator Sharp inquired concerning family caps, particularly with respect to additional children that might be born during the 24-month period. Senator Green suggested that if the parent goes to work within that time period, the impact of an additional child in the system will not be as great. The two-year period is intended to be as effective as a family cap. Co-chairman Halford noted that cost savings associated with the bill are discretionary administrative actions. There is no mandatory ratable reduction. ADJOURNMENT The meeting was adjourned at approximately 11:05 a.m.