HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE March 16, 1999 8:05 a.m. MEMBERS PRESENT Representative Andrew Halcro, Co-Chairman Representative John Harris, Co-Chairman Representative Carl Morgan Representative Lisa Murkowski Representative Fred Dyson Representative Reggie Joule Representative Albert Kookesh MEMBERS ABSENT All members present COMMITTEE CALENDAR *HOUSE BILL NO. 103 "An Act relating to civil actions by municipalities and certain public corporations and prohibiting certain civil actions by them against firearms or ammunition manufacturers and dealers." - MOVED CSHB 103(CRA) OUT OF COMMITTEE *HOUSE BILL NO. 98 "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 tribal family assistance programs; and providing for an effective date." - MOVED CSHB 98(CRA) OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 103 SHORT TITLE: LIABILITY RELATING TO FIREARMS SPONSOR(S): REPRESENTATIVES(S) DYSON, Austerman Jrn-Date Jrn-Page Action 2/19/99 260 (H) READ THE FIRST TIME - REFERRAL(S) 2/19/99 260 (H) CRA, JUDICIARY 2/24/99 308 (H) COSPONSOR(S): AUSTERMAN 3/09/99 (H) CRA AT 8:00 AM CAPITOL 124 3/16/99 (H) CRA AT 8:00 AM CAPITOL 124 BILL: HB 98 SHORT TITLE: PUB.ASSISTANCE:PROGRAMS/GRANTS/CONTRACTS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR Jrn-Date Jrn-Page Action 2/19/99 253 (H) READ THE FIRST TIME - REFERRAL(S) 2/19/99 253 (H) CRA, HES, FIN 2/19/99 254 (H) ZERO FISCAL NOTE (DHSS) 2/19/99 254 (H) GOVERNOR'S TRANSMITTAL LETTER 3/09/99 (H) CRA AT 8:00 AM CAPITOL 124 3/16/99 (H) CRA AT 8:00 AM CAPITOL 124 WITNESS REGISTER VICTOR GUNN, Legislative Administrative Assistant for Senator Pete Kelly Alaska State Legislature Capitol Building, Room 510 Juneau, Alaska 99801 Telephone: (907) 465-2327 POSITION STATEMENT: Supported HB 103. DAVID KELLEYHOUSE Alaska Outdoor Council PO Box 81452 Fairbanks, Alaska Telephone: (907) 455-7882 POSITION STATEMENT: Supported HB 103. MIKE COONS, Paramedice Member, National Rifle Association PO Box 4225 Palmer, Alaska 99645 Telephone: (907) 745-6779 POSITION STATEMENT: Encouraged passage of HB 103 and SB 77. JIM NORDLUND, Director Division of Public Assistance Department of Health & Social Services PO Box 110640 Juneau, Alaska 99811-0640 Telephone: (907) 465-5154 POSITION STATEMENT: Discussed HB 98. TERRY HOEFFERLE, Chief of Operations Bristol Bay Native Association PO Box 310 Dillingham, Alaska 99576 Telephone: (907) 842-5257 POSITION STATEMENT: Discussed Bristol Bay Native Association and Native nonprofits in general. DON SHIRCEL, Director Family Services Tanana Chiefs Council 122 First Avenue Fairbanks, Alaska 99701 Telephone: (907) 452-8251 POSITION STATEMENT: Discussed the Tanana Chiefs Council program. ACTION NARRATIVE TAPE 99-15, SIDE A Number 0001 CO-CHAIRMAN HARRIS called the House Community and Regional Affairs Standing Committee meeting to order at 8:05 a.m. Members present at the call to order were Representatives Halcro, Harris, Morgan, Murkowski, Dyson and Kookesh. Representative Joule arrived at 8:07 a.m. HB 103-LIABILITY RELATING TO FIREARMS Number 0047 CO-CHAIRMAN HARRIS announced the first order of business before the committee would be HOUSE BILL NO. 103, "An Act relating to civil actions by municipalities and certain public corporations and prohibiting certain civil actions by them against firearms or ammunition manufacturers and dealers." REPRESENTATIVE DYSON, Sponsor of HB 103, informed the committee that HB 103 is a companion to SB 77, sponsored by Senator Pete Kelly. Representative Dyson pointed out that Victor Gunn, staff to Senator Pete Kelly, was present. REPRESENTATIVE DYSON believed there to be two issues at hand. There appears to be a concerted effort from those who have an inherent distaste for firearms to punish the industry, thereby limiting the accessibility of firearms through liability suits. Such liability suits attempt to financially punish the manufacturers and distributors of firearms for the misuse of firearms. This bill, HB 103, would prohibit Alaskan political subdivisions from prosecuting suits for the misuse of legally manufactured and distributed firearms. The bill does not prohibit manufacturers from being sued for manufacturing defects and such of the weapons themselves. Number 0272 REPRESENTATIVE DYSON identified the other issue at hand as liability itself. The misuse of any manufactured implement is the responsibility of the person misusing the implement not the manufacturer. He discussed the time his wife was on a jury in which the manufacturer/distributor of a snow machine was being sued by an individual hurt when a belt broke. The snow machine owner testified in court that he had not maintained the snow machine for four years, had taken the belt guard and cowling off, and was racing the snow machine. Initially, Representative Dyson's wife was the only juror who did not want to rule in favor of the injured individual. Three or so days later, the jury did not award the injured individual anything because this was not the manufacturer's fault but rather the individual's misuse of the product. REPRESENTATIVE DYSON believed that everyone should be held accountable for their actions. Manufacturers should be held accountable for the production of inferior or unsafe items, but should not be held accountable for the misuse of items. Representative Dyson noted that firearms, as far as he knew, were the only manufactured item that enjoys some constitutional protection. Therefore, more care should be taken in the treatment of firearms. He informed the committee that SB 77 had been amended and those amendments should be before the committee. The Senate amendments expand the bill to include the State of Alaska as a party that could not bring forth such suits. Number 0542 VICTOR GUNN, Legislative Administrative Assistant for Senator Pete Kelly, Alaska State Legislature, supported HB 103. As Representative Dyson said, cities are taking firearm manufacturers to court to hold them responsible for the violence in the city. Mr. Gunn stated that cities claim that firearm manufacturers have conspired to flood the market knowing the guns will reach those cities with strict gun laws via the black market. Furthermore, the manufacturers are allegedly manufacturing more powerful firearms in order to increase sales. Both HB 103 and SB 77 are in response to lawsuits brought forth by municipalities against gun manufacturers in order that the municipality can recoup its damages from the illegal use of products. Mr. Gunn said, "They were emboldened by recent tobacco settlements where municipalities are now thinking they can attempt to supplement their general funds by lawsuits directed at the deep pocket of gun manufacturers. A product that they consider politically uncorrect." Unlike tobacco companies, firearm manufacturers do not deny that they manufacture a deadly product. Mr. Gunn indicated that people illegally using firearms are not being held responsible. MR. GUNN said that a group of lawyers, successful in the tobacco suits, have persuaded the mayors of several large cities to go after the firearm industry. The aim is to bankrupt the firearm companies by suing for medical costs and monetary damages of gun-related crime. Such lawsuits circumvent the constitutional limits as well as democratic debate. Mr. Gunn stated, "The gun control movement thinks it can win without passing laws or winning elections. By using litigation to raise prices and drive manufacturers out of business, the gun controllers can reduce the access to firearms without confronting the Second Amendment." He indicated the clear intent is to utilize the courts to accomplish what the anti-gun lobbyists have not been able to accomplish in the federal and state legislatures. "This clear abuse of tort liability system seeks to use potentially bankrupting lawsuits to force makers of a legal, but politically incorrect product, to quit manufacturing." Number 0812 MR. GUNN clarified that the intent of the legislation is not to prevent bringing an action for product liability for a defective product. Firearm manufacturing is a legal enterprise that produces quality products that are lawfully and safely used by thousands of Alaskans for various activities. Mr. Gunn said that Bill Reuger, Jr. had commented that it is easier to blame the firearm manufacturer than have people take responsibility for their actions. The Reuger company motto has been, "Arms maker for responsible citizens." Mr. Gunn informed the committee that the American Firearms Council conducted a nationwide survey of registered voters which found that 92 percent of registered voters polled did not believe cities or states should sue firearm manufacturers as a means to stop violence. The survey also found that 67 percent of the voters polled believe that enforcing current laws against the use of a firearm is more effective in addressing criminal violence than limiting the number of firearms an individual can purchase. He noted that the Public Opinion Strategy of Alexandria, Virginia conducted the survey in October 1998 which polled 800 registered voters nationwide with a margin of error of plus or minus three percent. MR. GUNN mentioned that blaming gun manufacturers for firearm-related crime is somewhat of a novel theory. This would be similar to attaching blame to an automobile manufacturer when an individual drives an automobile while intoxicated and kills someone. He asked, "What's next?" One professor's report documented that firearms were used safely over 2 million times to defend lives nationwide. Further, one-tenth of one percent of firearms are used in any given year to commit armed crime. The criminal use of firearms should be addressed by state and federal legislatures, not the manufacturers of a legal product. Number 1059 REPRESENTATIVE MURKOWSKI referred to the CSSB 77(JUD) when she inquired as to, "...why they have removed it from the section relating to municipalities, public corporations to its own subsection." MR. GUNN explained that the Senate committee felt it important to include individuals and the state in SB 77, which the CS accomplishes. REPRESENTATIVE MURKOWSKI agreed with Mr. Gunn's earlier statements. She commented that with regard to Mr. Gunn's question about what would be next, Representative Murkowski hoped that the legislature will not have to address this by statute; hopefully this will not be the first of many statutes in an effort to end what some feel are frivolous lawsuits. MR. GUNN commented that from the information he has garnered there is no "smoking gun" in this legislation. Unlike the tobacco industry, which was viewed as deceiving the public there was a "smoking gun." No one has proven that the firearm industry has flooded the market with firearms knowing the firearms will move into cities with stricter firearm control laws. Mr. Gunn explained that the firearm industry sells firearms to legal dealers who in turn sell firearms to individuals. What an individual does with the firearm after purchasing it is unknown. He reiterated his statements regarding the claims cities have made against the firearm industry. Any firearm is a potentially fatal item in the hands of an irresponsible individual. Mr. Gunn emphasized that everyone should remember that millions of individuals have survived and prevented attacks and assaults on their person due to the presence of a firearm. The firearm industry should be protected. CO-CHAIRMAN HARRIS referred to Section 2(b) which would cover liability issues regarding the manufacture of unsafe or damaged firearms. MR. GUNN informed the committee of his law enforcement background. He reiterated that the legislation does not intend to prevent damages being sought for the manufacture of products not up to par. Number 1422 DAVID KELLEYHOUSE, Alaska Outdoor Council (AOC), informed the committee that AOC is the state affiliate of the National Rifle Association (NRA). Mr. Kelleyhouse supported HB 103. He reiterated Mr. Gunn's comments regarding the correlation between the tobacco industry lawsuits and the flurry of lawsuits brought against the firearms industry. He indicated that any industry with deep pockets that is considered "politically incorrect" at the moment would be in jeopardy. MR. KELLEYHOUSE said that AOC feels the current litigation to be a direct threat to Second Amendment rights. If substantial judgements are levied against firearm manufacturers, the manufacturer will become bankrupt or the price of weapons will increase by a considerable amount, placing weapons out of reach to the average American citizen. MR. KELLEYHOUSE informed the committee that he served as the Director of the Division of Wildlife Conservation under the previous administration. He noted that Alaska receives $7 to $10 million a year in federal matching funds for wildlife conservation as a result of the Federal Aid and Wildlife Restoration Act of 1937, the Pitman-Robertson Funds. Those funds come from the 11 percent excise tax on firearm manufacturers which is distributed to all state wildlife agencies. This funding has been the backbone of conservation funding throughout the U.S. since 1937. Mr. Kelleyhouse pointed out that if firearm manufacturers go bankrupt or if there is an extreme increase in the price of firearms, the funding for state conservation and wildlife programs would be strangled. Mr. Kelleyhouse stated, "No manufacturer should be held responsible for the irresponsible or illegal use of its products. There's scarcely a product in society today that could not be injurious if misused, it's a matter of taking personal responsibility for one's own actions. So, litigation against the manufacturers of goods should not be viewed as a shortcut for local governments to swell their coffers and shift blame for social problems. Used legally, in the shooting sports, firearms are among the safest of all products. Consider that statistically, hunting and target shooting are more safe than football, bowling, or even badminton. It's seven injuries per 100,000 participants." MR. KELLEYHOUSE noted that he was involved in law enforcement for 20 years and a game biologist. He informed the committee that one of the demands he has heard is for the firearm industry to make a firearm specific to one individual owner. Mr. Kelleyhouse pointed out that in two instances that he had to use a firearm to save the life of another, he had to use another person's firearm. Therefore, to make firearms useful to only one individual does not make sense. Mr. Kelleyhouse said that the AOC and the NRA urge the committee to adopt HB 103. Number 1738 MIKE COONS, Paramedic, NRA member, testified via teleconference from Palmer. He asked if the SB 77 amendment, prohibiting the state or state agents to bring such a suit, will be included in HB 103. CO-CHAIRMAN HARRIS said not at this time. MR. COONS noted that he had sent Co-Chairman Halcro and Harris e-mails regarding this issue. Mr. Coons stated that HB 103 seems to only address cities and boroughs. The language does not prohibit states or agents of the state from filing frivolous lawsuits against firearm manufacturers. He did not have a problem with true product liability suits or breech of contract. Mr. Coons felt that using only the Georgia law as a blueprint would be ignoring the corrections other states have made in similar legislation. Texas and Florida are stopping such suits from the Governor's mansion on down. As long as it is possible to have an anti-gun governor and an appointed state attorney general, the prohibitive language for states and state agents must be included. Mr. Coons cited fairness as another issue. He said, "The political subdivisions have every right to yell 'foul' that...they are being told what not to do, but the state isn't willing to put the same restrictions on itself." Mr. Coons urged the committee to amend HB 103 to include language pertaining to the state as well as agents of the state. Number 1901 MR. COONS said that in an e-mail to the committee and Representative Dyson, Mr. Coons encouraged an amendment fashioned after language in Florida's legislation. Mr. Coons informed the committee that Representative Dyson had expressed concern that the amendment could prohibit HB 103 from passing out of the House of Representatives. Mr. Coons noted that Senator Pete Kelly indicated that he was considering an amendment which would make violations of this law a civil action against the violator. Mr. Coons reiterated his preference for language similar to that in Florida's law in order to make any state agent have second thoughts about challenging this law. Mr. Coons said that he would agree to a compromise with the civil action, if the consequences for violation of this law were punitive enough to strongly discourage such action. He informed the committee that the Mayor of Atlanta, Georgia was going forward with a suit against a firearm manufacturer. Although Georgia has a law prohibiting such, there are no meaningful ramifications. MR. COONS stated that Internet polls by CNN and ABC respectively report that respondents against such suits range between 75 to 90 percent. He noted that the last time he checked, the CNN poll had received almost 100,000 respondents and the ABC poll had received about 50,000 respondents. Mr. Coons emphasized that all industries are open to such suits. He informed the committee of a report aired on the Rush Limbaugh show about a report which concluded smoking during pregnancy results in the baby becoming a criminal which he felt illustrated the craziness of such litigation. In closing, Mr. Coons encouraged the passage of HB 103 and SB 77. REPRESENTATIVE DYSON thanked Mr. Coons for his interest as well as the information he has supplied on this issue. Representative Dyson announced his intention to continue to work with Senator Pete Kelly and have these two bills become similar, if not exactly the same. Representative Dyson indicated that amendments will be made in both bodies as the bills move through the committee process. MR. COONS appreciated all the work on this issue. He mentioned that Senator Pete Kelly was on NRA Live last week. Number 2085 CO-CHAIRMAN HALCRO asked if Representative Dyson would approve of adopting CSSB 77(JUD), Version LS0463\I, Ford, 3/15/99, and reporting that out of committee as the CS from the House Community & Regional Affairs committee. Co-Chairman Halcro believed that the Senate Judiciary CS does a better job of covering everyone, including state agencies and municipalities. Co-Chairman Halcro pointed out that the CSSB 77(JUD) includes everything in HB 103, but the language is a bit broader. REPRESENTATIVE DYSON said he would be pleased with the substitution. The committee took an at-ease from 8:36 a.m. to 8:37 a.m. Number 2212 CO-CHAIRMAN HALCRO moved that the wording from the CSSB 77(JUD) be considered as the content of the amended HB 103. There being no objection, it was so ordered. CO-CHAIRMAN HALCRO moved to report CSHB 103, Version LS0463\I, Ford, 3/15/99, out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, it was so ordered. The committee took an at-ease from 8:40 a.m. to 8:42 a.m. HB 98-PUB.ASSISTANCE:PROGRAMS/GRANTS/CONTRACTS Number 2278 CO-CHAIRMAN HARRIS announced the next order of business before the committee as HOUSE BILL NO. 98, "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 tribal family assistance programs; and providing for an effective date." JIM NORDLUND, Director, Division of Public Assistance, Department of Health & Social Services, said that he was present to testify on behalf of the governor's bill, HB 98. This bill would allow Alaska Native organizations to run their own welfare programs in their own areas as well as providing an additional measure of local control over welfare programs. Mr. Nordlund explained that HB 98 developed from the Federal Welfare Reform Law signed by President Clinton in August of 1996. The federal law allows tribal and Native organizations in Alaska the ability to run their own Temporary Assistance for Needy Families (TANF) program. The TANF federal block grant runs the Alaska Temporary Assistance Program (ATAP) which is the replacement for the Aid to Families with Dependent Children (AFDC). Currently, Alaska receives about $65 million for the TANF block grant. The federal law specifies that block grant must be matched by, "the maintenance of effort", by 80 percent of the funding the state spent on the AFDC program in 1994. MR. NORDLUND explained that HB 98 would allow state funding to be utilized by a Native-run program in Alaska. The federal law says that the 12 regional nonprofits organizations in Alaska and the Metlakatla Indian Community are eligible to receive part of Alaska's block grant directly from the federal government to run their own programs. The amount of money would be determined by the department and would be based on the number of recipients that state money used to serve those clients in the fiscal year (FY) 1994. Mr. Nordlund stated that the reason for HB 98 is to allow a state match to the federal block grant. The AFDC program, the primary cash assistance program for poor families in Alaska, has traditionally been a 50-50 match program. The passage of the new federal law created the TANF block grant which required states to provide a match, but the match was not required for Native-run programs. Therefore, HB 98 would allow state funding to follow the federal money for a Native-run program. Native-run organizations would become eligible for this funding in much the same way as the state is eligible for the federal money. He explained that a plan must be provided to the U.S. Secretary of Health and Human Services; with the approval of that plan the Native-run organization would receive its federal share. Mr. Nordlund pointed out that the federal law includes a provision which states that a Native-run program in Alaska needs to be comparable to the state's program. Number 2508 MR. NORDLUND informed the committee that currently, Alaska has a grant that goes to the Tanana Chief's Conference (TCC). The grant received by the TCC is similar to HB 98 in that it provides state funding for cash assistance programs. In order to receive that state funding, the TCC had to amend its original program to become essentially identical to the state program. If HB 98 passed, the TCC would be able to amend its plan to a program that TCC would feel is a better welfare program for their area. For example, TCC wanted to implement a 5 percent benefit reduction and use those proceeds to fund enhanced alcohol and drug treatment programs for those screened to have such problems. Mr. Nordlund felt that HB 98 does provide an additional measure for local control, allow programs to be more culturally attune and better meet the needs of persons in the specific locals. MR. NORDLUND said that HB 98 would allow a Native-run program to serve a non-Native in that area with departmental approval. For example, in a small village populated with 20 Native families and one non-Native family it makes more sense for the Native-run program to serve the one non-Native family as opposed to the state serving that family. With regard to whether HB 98 will cost any money, Mr. Nordlund said no. Currently, the state serves Native families in these areas. This bill would allow the diversion of state funds to the Native organization in order to serve those same families. Therefore, there is not a fiscal note for HB 98. He noted that HB 98 has the possibility, although probably not in the short-term, to save the state money. Mr. Nordlund believed that a locally-run welfare program is probably a better welfare program and has a better possibility of helping reduce welfare case loads, thereby saving money. Number 2667 CO-CHAIRMAN HALCRO asked if the intent of HB 98 is to provide more flexibility. MR. NORDLUND replied yes. CO-CHAIRMAN HALCRO noted that Mr. Nordlund had provided a list of 14 organizations. He asked if those organizations have already been approved to participate in this program or have those organizations merely expressed a desire to participate. MR. NORDLUND clarified that there are 12 regional nonprofits and the Metlakatla Indian Community. No organization has been approved yet. He reiterated that approval is incumbent upon a plan that the organization submits to the federal government. The TCC plan has been approved but had to be amended to become ATAP compatible in order to receive state funding. In further response to Co-Chairman Halcro, Mr. Nordlund agreed that in those areas without an organization expressing interest in administering a welfare program, the state would serve that population. Mr. Nordlund noted that not all of the authorized organizations will pursue this. Number 2753 REPRESENTATIVE MURKOWSKI noted that Mr. Nordlund used permissive language when saying that a non-Native "may" participate in one of these programs. Representative Murkowski referred to Mr. Nordlund's example regarding a Native community with one non-Native family. She asked if it would be an option to exclude the non-Native family or would a Native nonprofit program have to include anyone eligible in that village regardless. MR. NORDLUND explained that if the Native organization and the state agreed that the non-Native family would be served in that village by the Native organization, that would be the case. The recipient would not have the option to decide between service from the state or the Native organization. REPRESENTATIVE MURKOWSKI asked if for example, the Kodiak Native Association could operate its program at the same time the state operates its program. MR. NORDLUND agreed that would be possible. He would encourage a plan under which the state would serve non-Natives in Kodiak, while the rural villages on Kodiak Island would be served by the Native-run program. This would all be dependent upon the service delivery structure that would be created in association with the Native organization. However, Mr. Nordlund pointed out that it would also be possible that the determination would be that the Native organization would serve the non-Natives in that area. Mr. Nordlund stated it is too soon to make such projections. Number 2875 REPRESENTATIVE MURKOWSKI expressed concern that if two different entities operate similar programs, there would be some administrative overlap. Is there a way to eliminate such overlap? MR. NORDLUND clarified that to eliminate the administrative overlap and make use of the administration better is the intent of HB 98. In larger communities such as Fairbanks, large administrative structures exist. In smaller communities, having an additional administrative body tends to be less efficient. REPRESENTATIVE KOOKESH commented that these Native organizations to which Mr. Nordlund is speaking have been alive for many years and have strong administrative staff and presence in their regions. These Native organizations would survive even without this legislation, but HB 98 could make life in Rural Alaska easier. This legislation makes sense for these regions as well as for the state as a whole. Representative Kookesh said if the Native organization does not do this work, the state will need a larger presence in these areas. TAPE 99-15, SIDE B Number 2991 MR. NORDLUND pointed out that there is a limit to the state's presence, especially in the smaller areas of Alaska. Native organizations have already established a presence in villages. Furthermore, Native organizations have a better ability than the state to work with rural clients to do a better job helping those clients move away from public assistance. In response to Representative Murkowski, Mr. Nordlund stated that the TCC program is very young. The TCC officially took over the program in October. After a three month transition period, the TCC began paying benefits. Mr. Nordlund believed it is still very early to comment on the success of the program. Many hurtles remain to be overcome. Mr. Nordlund believed that in the long run the TCC program will be more successful than the state's program in that area. REPRESENTATIVE DYSON noted that he was most familiar with Bristol Bay Native Cooperation and the Cook Inlet Tribal Council. Those organizations have done excellent work and are an immense asset. REPRESENTATIVE MORGAN asked if the TCC program has made judgement calls based on the color of someone's skin in order to determine for which program that individual would be eligible. MR. NORDLUND informed the committee that protocols are being established to determine such referrals. Mr. Nordlund pointed out that the Division of Public Assistance will continue to issue benefits and make eligibility determinations for the Medicaid program and food stamps for Adult Public Assistance for Natives and non-Natives. Only for ATAP would Native clients be referred to TCC. Number 2800 REPRESENTATIVE MORGAN asked if the state would respect TCC's application or would a client have to go through the entire process again for the state. He indicated the possibility of duplication and inconvenience for the client. MR. NORDLUND said that there may be some inconvenience for the client. He expressed the importance of establishing a relationship between the client and TCC employee who will work with that client in the future. Mr. Nordlund acknowledged that in some cases the client would have to go across town to receive a service. REPRESENTATIVE JOULE noted that there is access to the Alaska Career Information System (ACIS) during the transition from welfare to work. Would that technology be available to the Native organizations? Representative Joule emphasized that ACIS is an excellent resource. MR. NORDLUND said that clients are entitled to those services at the usual locations (one-stops, the job service). Ideally, Native organizations running these programs would offer such in house through a computerized connection. However if the Native organization has not reached that development stage, a client could receive that information from an access point. REPRESENTATIVE JOULE asked if a Native organization were on-line would ACIS follow. MR. NORDLUND clarified that would be dependent upon the capabilities of the Native organization. However if the service is not available through the Native organization, the service would be available through the other state offices. Number 2609 REPRESENTATIVE DYSON encouraged, as Representative Morgan spoke to earlier, co-locating these services and having one intake form. Representative Dyson indicated he would ultimately desire every family or person have one person/counselor/case manager who would access all available services whether federal, state, local or tribal. Representative Dyson understood from prior comments that this legislation would somewhat separate services, but the benefits would outweigh that concern. MR. NORDLUND pointed out that the department is endeavoring to establish a case management system. He mentioned the opening of the one-stop center in Muldoon. Mr. Nordlund encouraged Native organizations to try to locate in existing one-stops which would not only save time for the client, but also achieve efficiencies in other functions. Mr. Nordlund said that the department is trying to move in that direction, but it is fairly complicated. REPRESENTATIVE DYSON mentioned that he had watched the Department of Community & Regional Affairs do creative things in order to find local organizations through which to work. Could the statute be changed to make this easier? Representative Dyson longed for the day in which a single individual can act on behalf of the local, state and federal governments, et cetera. Therefore, co-locating and separate administrative requirements would not be necessary. REPRESENTATIVE MORGAN commented that HB 98 sounds like the beginnings of the privatization of state services which he indicated perhaps, he would like. MR. NORDLUND agreed this could be viewed as privatization. Mr. Nordlund stated, "There is a bit of concern here in that regard, in that--there is a provision in our state contract with the Public Employee Unions that any time we look to privatize unless we can show that its saving money, that a feasibility study needs to be done in order to show that money actually can be saved to this effort." Mr. Nordlund believed that would have to be done before this legislation could be fully utilized. Number 2273 REPRESENTATIVE MURKOWSKI returned to the Kodiak scenario. She noted the understanding that a Native nonprofit organization has the latitude to modify the program to accommodate local needs. Suppose there is a Native organization running the program and the state is running assistance for those located in Kodiak. "Is it possible that one program is going to be perceived as more favorable than the other and the only basis for the distinction is the fact that one family is Native and one family is non-Native? And what kind of problems does that create?" MR. NORDLUND acknowledged Representative Murkowski's comments as one of the concerns with HB 98. He pointed out that Senator Murkowski had encouraged comparability language in federal law that is included in the law as well as standards for comparability. The programs must be comparable enough that the recipient of either program is not discriminated against. For example, if HB 98 passes and TCC does the five percent benefit cut in order to provide other services, Mr. Nordlund recognized the possibility of a challenge from a TCC recipient claiming they were treated unfairly which could lead to litigation. Mr. Nordlund hoped the comparability criteria would be adequate to sustain such a challenge. CO-CHAIRMAN HARRIS inquired as to the way the money changed hands. MR. NORDLUND explained that currently, the state pays cash to ATAP through a debit card. He did not believe most Native organizations would have that capability. Mr. Nordlund believed that TCC paid its clients through their general account. He suggested there might be folks from TCC on-line who could better speak to this. In further response to Co-Chairman Harris' question about a tracking mechanism, Mr. Nordlund said that there is some reporting about which recipients are receiving benefits and the level of benefits received. Presumably, those recipients are eligible to receive those benefits. He noted that there is an appeal process for clients who feel that they have not received the proper benefit. An unhappy client would first appeal to TCC, then to the department, and to the court system. MR. NORDLUND mentioned that the federal government has criteria for the block grant as well. The federal government has auditing procedures and performance measures for the Native organization. Furthermore, the department has normal auditing procedures to which the Native organization would be subject. Number 1921 TERRY HOEFFERLE, Chief of Operations, Bristol Bay Native Association (BBNA), testified via teleconference from Anchorage. He was impressed with the knowledgeable level of discussion. The federal TANF legislation identified 13 organizations in Alaska as eligible to operate local programs of which 12 are regional Native nonprofits and the Metlakatla Indian Community. Some regional organizations have already indicated that they are not interested in operating their own family assistance program. He noted that some of the regional organizations are too small to operate such a program. MR. HOEFFERLE informed the committee that BBNA was established in 1966 and most of the other organizations are over 30 years old. These organizations were created to resolve Native land claims in Alaska. Although the regional boundaries of the regional Native nonprofits correspond to the regional for profit Native corporations, the two should not be confused. These 12 regional Native nonprofits operate Indian programs which include health and social service programs. These tribal programs bring in over $400 million per year to the state. Mr. Hoefferle described these tribal programs as Indian funded dollars which could be viewed as authorized by the U.S. Congress as treaty obligations. Mr. Hoefferle informed the committee that these organizations contract with various federal agencies each of which has its own programming and reporting requirements that must be followed. He noted that the Native nonprofits also operate state contracts and grants for a diverse group of programs such as Village Public Safety and Healthy Families to name a few. MR. HOEFFERLE informed the committee that BBNA provides services in 32 villages in the Bristol Bay region. The BBNA Board of Directors has a member from each village as well as six members at large. This year BBNA has a $16 million budget and 302 employees, of which 68 are located in the central office in Dillingham and the remaining 234 employees are located in the villages in the region. Within the villages, the BBNA employees are employed in various capacities from the Village Public Safety Officer to Tribal Children Service Workers. Number 1526 MR. HOEFFERLE identified the major focus of BBNA, as well as other Native nonprofits in Alaska, as placing Native people in the workforce. Today BBNA has a workforce development budget of $1.2 million which is used for employment training, higher education scholarships, child care, and general assistance. Although these are Indian Program funds, these funds can be used to leverage some of the ATAP funds. The aforementioned programs are worked out of a one-stop shop workforce development center in Dillingham. BBNA created this one-stop shop using its own administrative dollars. The State of Alaska is co-locating some of its similar programs into the office structure. Mr. Hoefferle pointed out that BBNA has an agreement with the Alaska Department of Labor to operate a computer which has access to the department's information system. Also the Department of Community & Regional Affairs has co-located its peer outreach workforce program in the BBNA offices. MR. HOEFFERLE agreed with Representative Kookesh's comments that his interest in HB 98 is not to guarantee the Native nonprofits survival. The manner in which BBNA operates the aforementioned programs requires an administrative rate, an indirect cost rate, which is much lower than that of the University of Alaska, the State of Alaska, or the U.S. government. Mr. Hoefferle explained that assessment was determined from the indirect rate the state and federal governments have applied to disaster assistance funds coming in to Bristol Bay. The interest in administering this program emanates from the BBNA's local presence and resources in the region. Mr. Hoefferle stated that BBNA can do a better job moving "our" people from welfare to work than the state. The state program is operated via a long-distance phone call to Anchorage. Number 1212 DON SHIRCEL, Director, Family Services, Tanana Chiefs Council, testified via teleconference from Fairbanks. He informed the committee that since October 1, 1998 the TCC has operated the TANF program, which is called the Athabascan Self-Sufficiency Assistance Partnership (ASAP), for Native households. The TCC service area encompasses over a third of the entire state. During the first three months of programming, TCC has transitioned over 500 Native household cases which is about one-third of the Division of Public Assistance's Northern region case load. Since mid December, TCC has been the sole agency determining eligibility, processing applications, and providing timely benefits to over 450 Native households in over 40 rural communities and in Fairbanks, Alaska's second largest city. Mr. Shircel discussed the intricacies of initiating and setting up structures for this program. MR. SHIRCEL stated that it is still too early to make projections to the full impact of the privatization of welfare services under the TCC ASAP program. In six months of operation, the TCC has not had any formal complaints and have been able to engage over 35 percent of the rural caseload in work activities and created one-stop service centers in 38 remote rural communities. The state has not been able to do either on the same dime, since the initiation of welfare reform programming. Mr. Shircel emphasized that tribes are, through their Native organizations, operating these programs effectively, efficiently, within the constraints of the organization's budget and with the full support and participation of over 40 communities. Mr. Shircel echoed Mr. Nordlund's comments that the TCC would like to do more which would be allowed under HB 98. He reiterated the TCC's desire to implement a five percent reduction in benefits, mandatory alcohol and substance abuse screening, a voucher system for clients suspected of misuse of welfare benefits, stronger sanctions for nonparticipation in work activities, stronger sanctions in domestic violence cases, and incentives for parents to participate in parent-teacher conferences and children's health screenings. Mr. Shircel said that he would appreciate the committee's serious consideration of moving HB 98 out of committee and the legislator's support this session. There being no one else wishing to testify, the public testimony was closed. Number 0867 CO-CHAIRMAN HALCRO moved CSHB 98 out of committee with individual recommendations and the attached zero fiscal note. There being no objection, CSHB 98(CRA) was reported out of committee. ADJOURNMENT There being no further business before the committee, the House Community & Regional Affairs Standing Committee meeting was adjourned at 9:36 a.m.