HOUSE JUDICIARY STANDING COMMITTEE March 15, 1993 1:00 p.m. MEMBERS PRESENT Representative Brian Porter, Chairman Representative Jeannette James, Vice-Chair Representative Pete Kott Representative Gail Phillips Representative Joe Green Representative Cliff Davidson Representative Jim Nordlund OTHER MEMBERS PRESENT Representative Tom Brice COMMITTEE CALENDAR HB 113 "An Act regulating the solicitation of contributions by charitable organizations and paid solicitors and the solicitation of sales by telephonic means; and amending Alaska Rules of Civil Procedure 79 and 82." HEARD AND HELD IN COMMITTEE FOR FURTHER CONSIDERATION HB 67 "An Act relating to eligibility for and payments of public assistance; and providing for an effective date." HEARD AND HELD IN COMMITTEE FOR FURTHER CONSIDERATION WITNESS REGISTER REPRESENTATIVE RON LARSON Alaska State Legislature State Capitol, Room 502 Juneau, Alaska 99801-1182 Phone: 465-3878 Position Statement: Prime sponsor of HB 113 JIM FORBES, Assistant Attorney General Department of Law 1031 West Fourth Avenue, Suite 200 Anchorage, Alaska 99501 Phone: 269-5100 Position Statement: Discussed HB 113 JAN HANSEN, Director Division of Public Assistance Department of Health and Social Services P. O. Box 110640 Juneau, Alaska 99811 Phone: 465-3347 Position Statement: Described provisions of HB 67; Supported HB 67 as introduced ELLEN NORTHUP, Director The Glory Hole P. O. Box 21997 Juneau, Alaska 99802 Phone: 586-4159 Position Statement: Opposed HB 67 DONNA BAXTER 213 Dunkel Street Fairbanks, Alaska 99701 Phone: 452-2857 Position Statement: Opposed HB 67 HOSANNA LAHAIR-LEE 1902 Logan Anchorage, Alaska 99508 Phone: not available Position Statement: Opposed HB 67 ANNIE WHITNEY 1281 Beluga Court Homer, Alaska 99603 Phone: 235-5558 Position Statement: Opposed HB 67 ELAINE LOOMIS-OLSEN P.O. Box 3581 Kodiak, Alaska 99615 Phone: 486-6860 Position Statement: Opposed HB 67 CHERYL PHILLIPS P.O. Box 933 Haines, Alaska 99827 Phone: 766-2626 Position Statement: Opposed HB 67 CINDY SMITH Alaska Network on Domestic Violence and Sexual Assault 419 Sixth Street Juneau, Alaska 99801 Phone: 586-3650 Position Statement: Opposed HB 67 SANDRA BAXTER 213 Dunkel Street Fairbanks, Alaska 99701 Phone: 452-2857 Position Statement: Opposed HB 67 VIANN EWE 670 West Fireweed, Suite 105 Anchorage, Alaska 99503 Phone: 272-5410 Position Statement: Opposed HB 67 DIXIE ARMSTRONG P.O. Box 1487 Homer, Alaska 99603 Phone: 235-2423 Position Statement: Opposed HB 67 CHERYL TROJOVSKY 3537 Spruce Cape Kodiak, Alaska 99615 Phone: 486-6072 Position Statement: Opposed HB 67 TOM SCHELL, Director Parent And Family Center Catholic Community Services 419 Sixth Street Juneau, Alaska 99801 Phone: 463-3933 Position Statement: Opposed HB 67 MARY KAY BROWN Arctic Alliance for People 619 Hillcrest Drive Fairbanks, Alaska 99712 Phone: 457-1934 Position Statement: Opposed HB 67 KATHERINE BASTEN 104 Heintzleman Drive Anchorage, Alaska 99503 Phone: 272-5410 Position Statement: Opposed HB 67 JAYNE ANDREEN, Executive Director South Peninsula Women's Services P.O. Box 2328 Homer, Alaska 99603 Phone: 235-7712 Position Statement: Opposed HB 67 DOTTIE REIKIE P.O. Box 3330 Kodiak, Alaska 99615 Phone: 486-4810 Position Statement: Opposed HB 67 CAREN ROBINSON League of Women Voters P. O. Box 33702 Juneau, Alaska 99803 Phone: 586-1107 Position Statement: Opposed HB 67 JUDY BUSH, Attorney Alaska Legal Services Corporation 763 Seventh Avenue Fairbanks, Alaska 99701 Phone: 452-5181 Position Statement: Opposed HB 67 PUDGE KLEINKAUF 4201 McInnes Anchorage, Alaska 99508 Phone: 561-7113 Position Statement: Opposed HB 67 MARILYN SCHODER P.O. Box 2043 Homer, Alaska 99603 Phone: 235-6223 Position Statement: Opposed HB 67 MEAALOFA TOFAEONO P. O. Box 2127 Kodiak, Alaska 99615 Phone: 486-1790 Position Statement: Opposed HB 67 SHERRIE GOLL Alaska Women's Lobby KIDPAC P. O. Box 22156 Juneau, Alaska 99802 Phone: 463-6744 Position Statement: Opposed HB 67 MARY LOU CANNEY 1441 22nd Avenue Fairbanks, Alaska 99701 Phone: 452-4666 Position Statement: Opposed HB 67 ROBERT JAMES 247 South Franklin Street Juneau, Alaska 99801 Phone: 586-1346 Position Statement: Opposed HB 67 JOHN THOMAS 1021 West 16th Avenue Anchorage, Alaska 99501 Phone: 272-3005 Position Statement: Opposed HB 67 ROBIN WICKHAM 3550 Airport Way Road Fairbanks, Alaska 99709 Phone: 479-9123 Position Statement: Opposed HB 67 SHEILA WOODS, Family Services Technician Tanana Chiefs Conference 1302 21st Avenue Fairbanks, Alaska 99701 Phone: 456-1702 Position Statement: Opposed HB 67 ANGELA SALERNO National Association of Social Workers 1727 Wickersham Drive Anchorage, Alaska 99507 Phone: 561-7970 Position Statement: Opposed HB 67 GAYLE HORETSKI, Committee Counsel House Judiciary Committee State Capitol, Room 120 Juneau, Alaska 99801-1182 Phone: 465-6841 Position Statement: Explained CSHB 67 (JUD) PREVIOUS ACTION BILL: HB 113 SHORT TITLE: CHARITABLE & TELEPHONIC SOLICITING/SALES BILL VERSION: CSHB 113(FIN) SPONSOR(S): REPRESENTATIVE(S) LARSON TITLE: "An Act regulating the solicitation of contributions by charitable organizations and paid solicitors and the solicitation of sales by telephonic means; and amending Alaska Rules of Civil Procedure 79 and 82." JRN-DATE JRN-PG ACTION 02/01/93 199 (H) READ THE FIRST TIME/REFERRAL(S) 02/01/93 199 (H) LABOR & COMMERCE, FINANCE 02/10/93 290 (H) JUD REFERRAL ADDED, FOLLOWING L&C 03/04/93 (H) L&C AT 03:00 PM CAPITOL 17 03/04/93 (H) MINUTE(L&C) 03/05/93 542 (H) L&C RPT 5DP 03/05/93 542 (H) DP: PORTER,SITTON,MULDER,GREEN, HUDSON 03/05/93 542 (H) -ZERO FISCAL NOTE (LAW) 3/5/93 03/15/93 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 67 SHORT TITLE: ELIGIBILITY FOR PUBLIC ASSISTANCE BILL VERSION: SCS CSHB 67(FIN)(EFD FLD) SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR TITLE: "An Act relating to eligibility for and payments of public assistance." JRN-DATE JRN-PG ACTION 01/15/93 86 (H) READ THE FIRST TIME/REFERRAL(S) 01/15/93 86 (H) HEALTH, EDUCATION & SS, JUDICIARY,FINANCE 01/15/93 86 (H) -6 FNS (6-DHSS) 1/15/93 01/15/93 86 (H) GOVERNOR'S TRANSMITTAL LETTER 02/10/93 (H) HES AT 03:00 PM CAPITOL 106 02/10/93 (H) MINUTE(HES) 02/22/93 (H) HES AT 03:00 PM CAPITOL 106 02/22/93 (H) MINUTE(HES) 02/25/93 (H) HES AT 03:00 PM CAPITOL 106 02/25/93 (H) MINUTE(HES) 03/02/93 (H) HES AT 03:00 PM CAPITOL 106 03/02/93 (H) MINUTE(HES) 03/05/93 541 (H) HES RPT CS(HES) 3DP 3DNP 3NR 03/05/93 542 (H) DP: VEZEY, BUNDE, OLBERG 03/05/93 542 (H) DNP: B.DAVIS, BRICE, NICHOLIA 03/05/93 542 (H) NR: KOTT, G.DAVIS, TOOHEY 03/05/93 542 (H) -2 FISCAL NOTES (HES) 3/5/93 03/05/93 542 (H) -4 PREVIOUS FNS(DHSS) 1/15/93 03/15/93 (H) JUD AT 01:00 PM CAPITOL 120 ACTION NARRATIVE TAPE 93-33, SIDE A Number 000 The House Judiciary Standing Committee meeting was called to order at 1:13 p.m., on March 15, 1993. A quorum was present. Chairman Porter announced that HB 113, Charitable and Telephonic Soliciting/Sales, would be addressed by the committee first. The Chairman noted that the meeting was being teleconferenced. HB 113: CHARITABLE & TELEPHONIC SOLICITING/SALES Number 044 REPRESENTATIVE RON LARSON, PRIME SPONSOR of HB 113, said that charities throughout the nation had problems with "look alike" organizations, unconnected with the charity, which solicited "charitable" donations. He said that a bill similar to HB 113 had been introduced late last session. Representative Larson noted that Assistant Attorney General Jim Forbes had worked extensively to develop HB 113. Number 114 JIM FORBES, ASSISTANT ATTORNEY GENERAL, testified via teleconference from Anchorage. He worked for the Fair Business Practices Section of the Department of Law (DOL). He said that probably every legislator had encountered situations in which their constituents had been "taken" by a high-pressure telephone sales person. He noted that the telephone sales industry was currently virtually unregulated in Alaska. MR. FORBES said that the problem of charitable solicitation fraud was fairly widespread, and resulted in diminished contributions to legitimate charities. He commented that HB 113 would help the DOL catch violators, and would serve as a deterrent to violators. He said that HB 113 would also improve the state's ability to prosecute high-pressure telemarketers. MR. FORBES noted that HB 113 contained a number of exemptions, which he was confident covered legitimate telemarketing operations. Number 214 CHAIRMAN BRIAN PORTER mentioned that a number of proposed amendments to HB 113 had been brought to the committee's attention. He wanted to have the amendments incorporated into a Judiciary Committee substitute for the bill. He said that HB 113 would be rescheduled for a hearing as soon as possible. Number 229 REPRESENTATIVE JEANNETTE JAMES stated that when HB 113 was heard again, she would like further explanation of one amendment regarding telephone sales of securities. Number 241 REPRESENTATIVE GAIL PHILLIPS liked the portion of the bill which mandated a "cooling off" period for written contracts. She asked why funeral home directors and embalmers were exempted from the provisions of HB 113. Number 255 REPRESENTATIVE JIM NORDLUND asked if the language on page 6, lines 7-9 of HB 113 only pertained to charitable organizations that wished to solicit contributions over the telephone. CHAIRMAN PORTER replied that the language to which Representative Nordlund had referred pertained to charitable organizations that wished to solicit contributions by any means. Number 276 MR. FORBES said that the language pertained to any organization which solicited contributions from the public. REPRESENTATIVE NORDLUND asked if a charitable organization which raised funds through auctions and raffles would have to register with the DOL, under HB 113's provisions. Number 288 MR. FORBES responded that organizations engaging in that sort of fund raising would be required to register with the DOL. Number 290 REPRESENTATIVE NORDLUND asked what the registration process would entail. He noted that charitable organizations generally already registered with the Department of Commerce and Economic Development (DCED). Number 295 MR. FORBES commented that HB 113, as currently drafted, would require charitable organizations to register with the DOL, in addition to the current requirement of registering with the DCED. He was looking at ways to reduce paperwork requirements, through the regulatory process. He said it was possible that registration with the DCED might be deemed sufficient, by regulation, to meet HB 113's requirements. Number 318 REPRESENTATIVE NORDLUND noted that streamlined registration procedures would assist small charitable organizations already overburdened with paperwork. Number 324 MR. FORBES agreed. HB 67: ELIGIBILITY FOR PUBLIC ASSISTANCE Number 329 CHAIRMAN PORTER announced that HB 113 would be held, and that the committee would turn its attention to HB 67, Eligibility for Public Assistance. He commented that people in Fairbanks, Anchorage, Homer, and Juneau wished to testify on the bill. He asked those wishing to testify, with the exception of the representative from the Division of Public Assistance, to limit their comments to two minutes, if they were addressing the policy contained in HB 67. Number 359 JAN HANSEN, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE (DPA), described the provisions of HB 67. She called the members' attention to a green-covered document entitled "FY 94 Budget Overview," which she had distributed. (A copy of the FY 94 Budget Overview may be found in the House Judiciary Committee Room, Capitol Room 120, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) She noted that the document contained a number of graphs and charts relevant to discussion of HB 67. MS. HANSEN said that the DPA was attempting to restructure welfare in the state, in an effort to contain the growing caseload. She mentioned that both nationally and in Alaska, there had been unprecedented growth in the Aid to Families with Dependent Children (AFDC) program. MS. HANSEN said further that the DPA, in an effort to contain the cost of the program, put resources into the front-line eligibility staff, so that payments were only being made to those applicants who qualified. She said that her agency was working with the federal government to change federal welfare law. She said that her agency was directing resources toward a "Welfare to Work" program, in which welfare recipients could get training which would put them to work and get them off of welfare. MS. HANSEN wanted the committee to look at HB 67 in the context of what the DPA was doing to restructure welfare and contain costs. She said that HB 67 addressed the payment structure for AFDC and the Adult Public Assistance (APA) programs. MS. HANSEN explained HB 67's impacts on the AFDC program first. She said that the program comprised of 50% federal funds and 50% state funds. Federal criteria were used to determine eligibility, she noted. She commented that the state sets the standard of need for a household, as well as the payment level. MS. HANSEN stated that under current law, the state could set the need and payment amounts, and increase those amounts by the federal Social Security Administration cost-of-living allowance (COLA) on January 1 of each year. She said that the original version of HB 67 would suspend the COLA for one year, so that on January 1, 1994, payment amounts would not increase. However, she noted that the House Health, Education, and Social Services (HESS) Committee had repealed the COLA provision entirely in the committee substitute it recently adopted. MS. HANSEN clarified that the changes made by the HESS committee created additional budget reductions. She said that the governor's budget, as submitted, already contained the dollar effect of the original HB 67. She noted that the savings shown in the attached fiscal notes pertaining to the original HB 67 had already been included in the budget. She commented that the COLA suspension would result in a $2.1 million dollar savings for fiscal year 1994. MS. HANSEN stated that the second change for the AFDC program in HB 67 pertained to "ratable reductions," which referred to grants being reduced by a percentage amount. She noted that the federal government required the state to set a standard of how much money a poor individual needed. The state then determined how much it would pay. She said that Alaska had historically and by statute paid 100% of the need standard. She said that HB 67 would reduce AFDC payments by approximately 6.3%. MS. HANSEN commented that in the case of a family comprised of a mother and two children, the bill would result in a reduction from $950 per month to $890 per month. She noted that one positive effect of paying less than 100% of the need standard was allowing a working client to keep a little bit more of their earned income. She said that under HB 67's provisions, AFDC payments would be rolled back to payment levels in 1991. MS. HANSEN noted that the third major change for the AFDC program in HB 67 created an equity of payments between two categories of AFDC recipients. She said that currently, the state provided different payments to three-person families consisting of two parents and one child and three-person families consisting of one parent and two children. She stated that HB 67 would reduce the payment now made to three-person families consisting of two parents and one child, by about $90 per month. MS. HANSEN stated that another, slight change would be made to the AFDC program, under HB 67's provisions. She said that there were a small number of households in which a non- parental relative did not receive a welfare payment, but the child in her or his custody did. The federal government had determined that Alaska was out of compliance with federal standards regarding these payments; HB 67 would change the way that those grants were determined. She said that households with two children would receive a decreased welfare benefit, and households with one child would receive an increased benefit. MS. HANSEN went on to describe changes made by HB 67 to the APA program. She commented that two of the changes were similar to those made to the AFDC program. The first change pertained to the COLA, which under the original bill was suspended for one year, and under the HESS committee substitute was repealed. The second change, she said, dealt with the ratable reduction, and the impact was less severe than the AFDC ratable reduction, due to the manner in which the APA payment was calculated. MS. HANSEN said that blind, aged, and disabled people were those who received APA benefits. She said that they received a Supplemental Security Income (SSI) payment from the federal government, as well as a state supplement. She said that the COLA reduction would affect only the state supplement portion of the APA payment. With regard to the ratable reduction, Ms. Hansen noted that payments would be rolled back to 1990 levels. She said that the resulting out-of-pocket difference for APA clients was somewhat less than that for AFDC clients. She commented that the average monthly reduction for an APA household would be $42. MS. HANSEN said that HB 67 also affected the interim assistance program for APA clients. She mentioned that disabled persons who applied for welfare benefits had to be determined by the federal government to be "disabled." She noted that they had to apply for federal SSI funds. She said that the process for meeting the disability criteria took an average of eight months to complete. While a person's application was pending, she said, the state paid an interim assistance grant of $280 per month. MS. HANSEN commented that currently, at the end of the interim period, when a person was determined to be disabled, the federal government sent a payment to the individual for all of their SSI, retroactive to the month in which they applied. The state also made a payment to those individuals, she said, to bring their benefit up to the full level for which they qualified under the APA program. MS. HANSEN noted that HB 67 would change the process for the interim assistance program by having the federal government send a lump sum check to the state when an individual was determined to be disabled. The state would, therefore, be reimbursed for its $280 per month interim assistance payments, send the remainder of that check on to the client, and start the state supplement payment from that date forward. She noted that this was a common procedure in many other states. MS. HANSEN mentioned that each provision of HB 67 would result in a considerable cost savings to the state. She called the members' attention to cost savings figures on page 12 of the "FY 94 Budget Overview." She reiterated her earlier comment that the cost savings of HB 67 were already reflected in the governor's budget, as submitted. MS. HANSEN stated that the Department of Health and Social Services (DHSS) supported HB 67 as introduced, with the one- year suspension of the COLA. She mentioned the DHSS' concern that the new version of HB 67 might create too large a gap between the poverty level and the size of the payment welfare recipients would receive in the future. She noted that typically, AFDC recipients stayed on the program for less than two years. She said it was important that, during those two years, the state pay enough so that the recipient could get his or her life in order and become self- supporting. MS. HANSEN noted that HB 67 allowed the DHSS to adopt regulations immediately, but made the changes contained in the bill effective on July 1, 1993. Number 684 REPRESENTATIVE NORDLUND asked if the DHSS had notified welfare recipients of the pending reduction in their benefits. Number 687 MS. HANSEN replied that the DHSS had not formally notified its clients of the pending change. She said that the DHSS intended to notify clients when HB 67 passed the legislature, without waiting for the governor to sign the bill into law. She said that under that scenario, clients would be notified by May 15, at the latest. Number 697 REPRESENTATIVE NORDLUND expressed his opinion that six weeks' notice was not sufficient time for welfare recipients to plan for how to deal with a reduction to an already-tight budget. Number 705 CHAIRMAN PORTER commented that it would be difficult to notify recipients prior to HB 67 passing the legislature, as the DHSS would not be able to tell them what sort of reductions would be made to their monthly payments. Number 709 REPRESENTATIVE NORDLUND responded that a delayed effective date would give recipients more time to plan for reduced monthly benefits. Number 712 REPRESENTATIVE JOE GREEN asked what would happen if a person was receiving interim assistance from the state, pending a federal determination that she or he was disabled, and the person ended up not being declared disabled. Number 720 MS. HANSEN replied that when the state was notified of the federal government's determination that an individual was not disabled, state payments to that individual would end. She noted that most applicants were deemed "not disabled" the first time around. She called the federal process for determining disability complex and arcane, and added that most applicants were determined to be disabled when the rulings were appealed. CHAIRMAN PORTER asked Ms. Hansen to address Representative Green's original question regarding what would happen in the event that a person was deemed not disabled. MS. HANSEN did not think that persons deemed to be not disabled were required to repay interim assistance benefits. Number 745 REPRESENTATIVE JAMES asked if persons over the age of 65 had to prove they were disabled in order to receive SSI benefits. Number 751 MS. HANSEN replied that persons over 65 only needed to prove their financial need for benefits, not that they were disabled. The process for determining financial need was much shorter than the process for proving disability, she noted. Number 766 ELLEN NORTHUP, DIRECTOR, THE GLORY HOLE, a homeless shelter in Juneau, testified in opposition to HB 67. She was appalled that HB 67 was even introduced. She was particularly concerned about those clients that she saw most often: Those disabled individuals between the ages of 45 and 65. She cited the lack of housing available for poor people, and noted that Alaska did not even have an income tax, yet it was cutting benefits to its poorest citizens. She asked committee members to follow their consciences when voting on HB 67. Number 813 DONNA BAXTER, testifying via teleconference from Fairbanks, said that the loss in income to welfare recipients would be a detriment to businesses in the Fairbanks area. She expressed her opinion that passage of HB 67 would result in more unemployment, and would throw the state into a recession. She complained that APA and AFDC recipients had not even been formally notified that HB 67 had been introduced. Number 830 MS. BAXTER stated that $280 per month was not sufficient to support a person. She expressed an opinion that a doctor's declaration ought to be enough to qualify a person as "disabled." She commented that the Social Security Administration should be penalized for not acting on applications for disability in a timely manner. TAPE 93-33, SIDE B Number 000 HOSANNA LAHAIR-LEE testified via teleconference from Anchorage. She had worked her way off of welfare, but was back on welfare due to a disability. She was unable to work, but did volunteer work helping other low-income people. She felt that the welfare system should be reformed so as not to encourage fraud. She commented that public assistance recipients had the right to know about HB 67, and said that most recipients had not been notified of the pending changes to their monthly payments. She supported freezing benefits, but not dropping them. She urged the committee to listen to AFDC and APA recipients. Number 130 ANNIE WHITNEY testified via teleconference from Homer. She said that she was a teacher at the alternative high school, and that many of her students were AFDC recipients. She commented that the state was taking advantage of the disenfranchised, and called the state's actions "morally unjustifiable." She complained that HB 67 contained no incentives for recipients to go to work or school. Additionally, she said that the bill did not address the needs of the chronically unemployed. Number 190 ELAINE LOOMIS-OLSEN testified via teleconference from Kodiak. She said that she was a coordinator of a single parent project at Kodiak College. She commented that 2/3 of the project's members were on the AFDC program. She said that the project's members were determined to be free from welfare. She noted that HB 67 did not follow the welfare reforms proposed by President Clinton. She stated that the bill would make the road to self-sufficiency even longer. Number 250 CHERYL PHILLIPS testified via teleconference from Haines in opposition to HB 67. She said that she was a single mother, and did not know how she would manage on a decreased monthly income. She implored the committee to find ways other than cutting welfare benefits to save money. Number 303 CINDY SMITH, EXECUTIVE DIRECTOR, ALASKA NETWORK ON DOMESTIC VIOLENCE AND SEXUAL ASSAULT, spoke in opposition to HB 67. She was concerned about HB 67's impact on the immediate safety of domestic violence victims. She said that women wanting to separate from violent partners would likely go on AFDC for a time. She was of the opinion that HB 67 would result in more homelessness. She said that the cut to welfare benefits was counterproductive to job readiness. Number 340 MS. SMITH commented that with the repeal of the COLA, there was no longer a state policy regarding "how poor is poor enough?" She said that with no standard in place, poor people would fall further and further behind. She was of the opinion that welfare recipients needed to be notified that their benefits would be cut, so that they could adequately plan for the future. Number 384 SANDRA BAXTER testified via teleconference from Fairbanks. She said that being on welfare caused people to feel depressed. She called HB 67 unrealistic. Number 420 VIANN EWE testified via teleconference from Anchorage in opposition to HB 67. She is the Family Services Coordinator for the Southcentral Foundation's Head Start program. She said that the bill would negatively impact children in the Head Start program. She called the bill counterproductive. Number 441 DIXIE ARMSTRONG testified via teleconference from Homer in opposition to HB 67. She volunteered for a program which distributed food to low-income people in her community. She said that if HB 67 was enacted, she did not see how her program could maintain a supply of food for the needy people in Homer. Number 454 CHERYL TROJOVSKY testified via teleconference from Kodiak. She said that when she was able to get work, she was only paid the same amount that she could get on public assistance. She also stated that when she worked, she usually could not get health insurance as an employment benefit. She commented that HB 67 would be an impediment to welfare recipients who were trying to get off of welfare. She requested that the Job Opportunities and Basic Skills (JOBS) Training Program be implemented in her community. Number 487 TOM SCHELL, DIRECTOR, PARENT AND FAMILY CENTER in Juneau, a part of CATHOLIC COMMUNITY SERVICES, said that HB 67 would affect the neediest senior citizens, disabled persons, and children. He commented that HB 67 did not promote greater self-sufficiency, independence, or empowerment among welfare recipients. He said that the bill merely reduced an already "extremely spartan" monthly benefit. He urged the committee to identify societal problems leading to the need for public assistance, instead of cutting aid to public assistance recipients. MR. SCHELL expressed his organization's opposition to HB 67, because other options had not yet been exhausted. Number 539 MARY KAY BROWN, representing the ARCTIC ALLIANCE FOR PEOPLE, testified via teleconference from Fairbanks in opposition to HB 67. Her organization was comprised of representatives from Fairbanks non-profit agencies that worked with welfare recipients. She said that the cuts proposed in HB 67 would not be cost-effective in the long run, as they would increase the very types of social problems that her group was working to counteract. She commented that HB 67 penalized the disenfranchised. She urged the committee to oppose HB 67, and instead emphasize job training programs and job placement. Number 560 KATHERINE BASTEN, an AFDC recipient, testified via teleconference from Anchorage. She said that she was a single parent who had left an abusive marriage. She commented that she struggled to support herself and her three children on her monthly public assistance benefit. Number 590 JAYNE ANDREEN, EXECUTIVE DIRECTOR, SOUTH PENINSULA WOMEN'S SERVICES, testified via teleconference from Homer. Her organization helped victims of family violence. She noted that her organization unfortunately could not contain its caseload. She was of the opinion that HB 67 would lead to more family violence in Alaska. She said that one major reason women remained in abusive relationships was a woman's concern about her inability to support herself and her children. She noted that in some cases, a perpetrator of family violence would use the family's finances as a control mechanism. MS. ANDREEN commented that people on public assistance had no "fat" to cut from their household budgets. She also read the written testimony of Joe Lawlor. Mr. Lawlor said that it was unfair to roll welfare benefits back to 1990 levels unless all other state payments, including state employee salaries, were also rolled back to the 1990 level. He said that HB 67 amounted to the legislature picking on people with little political power and who would suffer greatly as the cost of living increased. Number 632 DOTTIE REIKIE testified via teleconference from Kodiak. She is a 19-year-old single mother on AFDC. She expressed her desire to get off welfare, and said that she was currently working to attain her high school diploma. Number 645 CAREN ROBINSON, representing the LEAGUE OF WOMEN VOTERS, expressed her organization's strong opposition to HB 67. She said that people had to wait nearly six months to get low-income housing in Juneau, if they were homeless, in a violent relationship, or living in tremendously unsafe conditions. Other people might have to wait two to three years to get into low-income housing, she said. MS. ROBINSON cited the national League of Women Voters' position that government should promote self-sufficiency among individuals and their families. The national League also felt that the most effective social programs were those that worked to prevent or reduce poverty, she said. She added that the national League felt that persons who were unable to work, whose earnings were inadequate, or for whom jobs were not available, had the right to an income and/or services sufficient to meet their basic needs for food, shelter, and access to health care. Number 684 JUDY BUSH, ATTORNEY, ALASKA LEGAL SERVICES CORPORATION, testified via teleconference from Fairbanks. She commented that a disabled adult currently received $808 per month; under HB 67's provisions, however, that same adult would only receive $717 per month. She noted that HB 67 would result in some APA recipients losing health care benefits. Ms. Bush mentioned that HB 67 would require disabled people to repay their state interim assistance payments, but ironically would not require people found not to be disabled to repay those benefits. MS. BUSH next spoke about HB 67's impact on the AFDC program. To her knowledge, the state of Alaska had no documentation for its present need standard for the AFDC program. She commented that the need standard needed to be reassessed, but noted that HB 67 did not require a reassessment of the standard. She said that the present need standard clearly did not reflect the cost of decent, safe living conditions. MS. BUSH stated that child support was a key component of reducing welfare costs. She said that currently, the Child Support Enforcement Division only collected 18.6% of what the state paid out in AFDC benefits. She noted that HB 67 did not address child support enforcement, but merely penalized children and custodial parents. She said that if the legislature passed HB 67, she would feel ashamed to collect a permanent fund dividend check. Number 770 PUDGE KLEINKAUF testified via teleconference from Anchorage. TAPE 93-34, SIDE A Number 000 MS. KLEINKAUF said that in the interest of fairness, if AFDC and APA recipients' COLAs were going to be cut, then state employees' COLAs should also be cut. She commented that the savings that would result from HB 67 was only one-half of general fund monies. The other half was federal money, she said. She added that there were ways to address the high cost of welfare without financially penalizing recipients. She noted that the state needed to get much tougher about collecting child support. She also proposed granting tax credits to businesses that hired welfare recipients. Number 095 MS. KLEINKAUF said that the state government itself should take the lead in hiring welfare recipients. She said further that there was no COLA that came via a federal route to AFDC recipients. Therefore, she said, AFDC recipients who had their state COLA cut would not be able to receive any other COLA. But, she said that APA recipients who were also on Social Security and/or SSI would continue to receive the federal COLA. She mentioned the "gap" which had been referred to earlier, and commented that as many welfare recipients were not working, they would not be able to fill the "gap." She concluded by saying that she strongly opposed HB 67. Number 142 MARILYN SCHODER testified via teleconference from Homer. She volunteered for two programs which assisted the poor. She said that if legislators had to cut the budget, they should cut many programs a small amount, instead of making severe cuts to a few programs. Number 188 MEAALOFA TOFAEONO testified via teleconference from Kodiak. She is part of the single parent program at Kodiak College, and an AFDC recipient. She said that she had worked at a cannery, but received no health insurance. She said that she had applied for AFDC benefits to get health insurance. She commented that HB 67 would make it more difficult for welfare recipients to get off of public assistance. Number 219 SHERRIE GOLL, representing the ALASKA WOMEN'S LOBBY and KIDPAC, testified in opposition to HB 67. She asked committee members, when considering HB 67, to look at the budget as a whole and to see if any other sector of the budget was being cut by $17 million. She commented that 22,000 children would be affected by HB 67, as would 4,137 elderly people, 5,438 disabled adults, and 89 blind adults. She said that the state needed a plan to reduce its caseload growth, through job placement and child support enforcement. She commented that the original HB 67 had been made even harsher by the HESS committee changes. MS. GOLL recommended that the House Judiciary Committee look at the original bill, which she said included every possible cut ever considered by an administration over the last ten years. Number 302 MARY LOU CANNEY, an AFDC recipient, testified via teleconference from Fairbanks. She said that she would probably be off welfare within the next year. She stated her opposition to HB 67, saying that the cuts in it were harmful. She asked the committee to think carefully about the people who would be affected by HB 67. She said that those people needed support, and expressed her opinion that HB 67 was not a supportive bill, but rather a harmful bill. Ms. Canney commented that HB 67 amounted to child abuse. Number 347 ROBERT JAMES said that he opposed HB 67. He commented that government could do a much better job than the one it was currently doing. He mentioned that the U.S. government sent money to other countries, even those with which we had been at war, yet there was so much need in our own country. He said that he was too proud to apply for welfare, because he was able to work at times. He commented that the legislature could find other ways in which to cut the budget, rather than cutting benefits to poor people. He said that budget cuts always hit the poor people. MR. JAMES noted that people were not living on the street because they wanted to. Number 415 JOHN THOMAS testified via teleconference from Anchorage. He supervised a program which dealt with people who would be affected by HB 67. He commented that the SSI program did have a COLA, but that in 1992, that COLA only amounted to $12. He said that the AFDC program contained an inherent disincentive to work, and he would like to see the AFDC program changed, so that it would give parents an incentive to work, by ensuring that they continued to receive interim child care and health insurance benefits. He urged the committee to look at the long-term economic ramifications of HB 67. MR. THOMAS stated that the legislature should look at eliminating waste, not social programs. He said that the 23,000 children who would be affected by HB 67 could not vote, and were therefore an easy target for the legislature. Number 491 ROBIN WICKHAM testified via teleconference from Fairbanks, in opposition to HB 67. She had many concerns about the bill, but noted that the savings contained in HB 67 resulted in less money for food, shelter, clothing, and utilities for poor people. She did not see a savings resulting from legislation that would create more homeless, hungry, and destitute people. She commented that the state needed to beef up the Child Support Enforcement Division's collection capabilities. Number 520 SHEILA WOODS, FAMILY SERVICES TECHNICIAN, TANANA CHIEFS CONFERENCE, testified via teleconference from Fairbanks. She opposed HB 67. She said that the bill would create an economic hardship for families which already faced such hardship. ANGELA SALERNO, representing the NATIONAL ASSOCIATION OF SOCIAL WORKERS, testified via teleconference from Anchorage in opposition to HB 67. She noted that during two different hearings on HB 67, there had been unanimous opposition to the bill. She commented that HB 67 would not give people an incentive to go to work. Number 551 CHAIRMAN PORTER asked committee counsel, Gayle Horetski, to discuss the proposed House Judiciary committee substitute for HB 67. Number 555 GAYLE HORETSKI, COMMITTEE COUNSEL, HOUSE JUDICIARY COMMITTEE, called the members' attention to a draft committee substitute dated March 11, 1993. She said that the original HB 67 had been referred to the HESS Committee, which had removed the COLA. She mentioned a memorandum from Terri Lauterbach of the Legislative Affairs Agency's Legal Services Division, which pointed out a technical problem in the HESS Committee's substitute for HB 67. Ms. Horetski said that the draft Judiciary Committee substitute made a technical change only. She noted that the effect of the HESS Committee substitute and the proposed Judiciary Committee substitute were the same. Number 584 REPRESENTATIVE NORDLUND asked if the DHSS had seen the technical amendment. MS. HANSEN had reviewed the proposed committee substitute, and agreed that the technical change accomplished what it set out to accomplish. She noted that the DHSS did not support the COLA repeal, however. Number 599 REPRESENTATIVE PHILLIPS made a MOTION to ADOPT CSHB 67 (JUD). Number 601 REPRESENTATIVE NORDLUND OBJECTED. He had some amendments, based on the HESS Committee substitute, to offer. He did not object to adopting CSHB 67 (JUD), but noted that his amendments would have to be altered to comport with the new document. Number 622 REPRESENTATIVE CLIFF DAVIDSON expressed his intent to offer an amendment which would change the bill back to how it was originally written. Number 633 REPRESENTATIVE NORDLUND asked if the technical amendment would result in a reduction of APA benefits. Number 639 MS. HANSEN understood that the technical amendment had no impact, other than to clean up the language of the statute. Number 655 REPRESENTATIVE NORDLUND REMOVED his OBJECTION to adopting CSHB 67 (JUD). He had a great deal of trepidation about HB 67, and said that in general, he did not support the bill. However, he was offering his first amendment as a compromise. The amendment, he said, allowed for a suspension of the COLA for both APA and AFDC recipients for one year. Additionally, he said, the ratable reduction in the amendment was rolled back to the 1992 level, as opposed to the 1991 level in the HESS committee substitute. He commented that his amendment would still result in a reduction in AFDC and APA benefits, as well as a reduction in the cost of the programs to the state. REPRESENTATIVE NORDLUND said that the only difference between the effect of his amendment and the governor's bill was that the ratable reduction would be less severe under the provisions of his amendment. Number 703 REPRESENTATIVE DAVIDSON noted that Representative Nordlund's amendment would not provide for a permanent rejection of the COLA, but just a one-year suspension. He spoke in favor of the amendment, citing the testimony that the committee had heard. He hoped that the legislature could find other ways in which to make financial survival less painful. He urged his colleagues to support the amendment. Number 718 REPRESENTATIVE GREEN asked what would happen after the COLA was suspended for one year, under the provisions of Representative Nordlund's amendment. Number 722 REPRESENTATIVE NORDLUND replied that the intent of his amendment was to suspend the COLA for one year, and then automatically grant a COLA the following year. Number 726 REPRESENTATIVE DAVIDSON noted that the amendment would result in a permanent lessening of the COLA. Number 735 REPRESENTATIVE NORDLUND understood Representative Davidson was correct. Number 738 REPRESENTATIVE GREEN asked how the effects of HB 67, as proposed to be amended, could be determined. Number 743 REPRESENTATIVE NORDLUND said that in his opinion, based on the testimony he had heard today, people would likely not be very supportive of his amendment. However, he said that his amendment would result in a less severe reduction in benefits than would the HESS Committee substitute for HB 67. Number 754 MS. HANSEN said that the HESS Committee substitute for HB 67 would result in a $60 per month reduction for a family of three, whereas Representative Nordlund's amendment would result in a $27 per month reduction for the same family. REPRESENTATIVE PHILLIPS OBJECTED to ADOPTING Representative Nordlund's AMENDMENT. A roll call vote was taken. Representatives Davidson, Nordlund, and Green voted "YEA." Representatives Phillips, James, and Porter voted "NAY." And so, the AMENDMENT FAILED. Number 770 REPRESENTATIVE NORDLUND said that he had another amendment to offer. Number 775 CHAIRMAN PORTER noted that due to the late hour, he would reschedule HB 67 to a time uncertain, to address additional amendments to the bill. ADJOURNMENT CHAIRMAN PORTER adjourned the meeting at 3:25 p.m.