SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE March 24, 1995 9:05 a.m. MEMBERS PRESENT Senator Lyda Green, Chairman Senator Johnny Ellis Senator Judy Salo MEMBERS ABSENT Senator Loren Leman, Vice Chairman Senator Mike Miller COMMITTEE CALENDAR SENATE BILL NO. 98 "An Act making changes related to the aid to families with dependent children program, the Medicaid program, the general relief assistance program, and the adult public assistance program; directing the Department of Health and Social Services to apply to the federal government for waivers to implement the changes where necessary; relating to eligibility for permanent fund dividends of certain individuals who receive state assistance, to notice requirements applicable to the dividend program; and providing for an effective date." PREVIOUS SENATE ACTION SB 98 - See Health, Education & Social Services minutes dated 3/8/95, 3/10/95, 3/13/95, 3/17/95 and 3/22/95. WITNESS REGISTER Jim Nordlund, Director Division of Public Assistance (DPA) Department of Health & Social Services (DHSS) P.O. Box 110640 Juneau, Alaska 99811-0640 POSITION STATEMENT: Reviewed the position of DPA to the new CS. Glenda Straube, Director Child Support Enforcement Division Department of Revenue 550 W 7th Ave., Suite 410 Anchorage, AK 99501 POSITION STATEMENT: Discussed concerns from her division. Shannon O'Fallon Assistant Attorney General Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 POSITION STATEMENT: Reviewed the concerns from the Department of Law. Curt Lomas Welfare Reform Program Division of Public Assistance Department of Health & Social Services P.O. Box 110640 Juneau, AK 99811-0640 POSITION STATEMENT: Provided additional information regarding assistance programs. Portia Babcock Staff to Senator Green State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Offered additional information regarding the new CS to SB 98. Barbara Thompson, Assistant to the Director Division of Education Support Department of Education 801 W 10th Street, Suite 200 Juneau, Alaska 99801-1894 POSITION STATEMENT: Reviewed the Division of Education Support's concerns with the legislation. Cathy Tibbles Division of Family and Youth Services PO Box 110630 Juneau, Alaska 99811-0630 POSITION STATEMENT: Anticipated additional work for her division. Loren Jones, Director Division of Alcoholism and Drug Abuse PO Box 110607 Juneau, Alaska 99811-0607 POSITION STATEMENT: Discussed concerns regarding the alcohol and drug testing and treatment provisions. Val Horner, Program Officer Job Opportunities and Basic Skills (JOBS) Division of Public Assistance Department of Health & Social Services PO Box 110640 Juneau, Alaska 99811-0640 POSITION STATEMENT: Offered information regarding the JOBS program. ACTION NARRATIVE TAPE 95-21, SIDE A SHES - 3/27/95 SB 98 PERSONAL RESPONSIBILITY ACT OF 1995  CHAIRMAN GREEN called the Senate Health, Education, and Social Services Committee work session to order at 9:05 a.m. She introduced SB 98 as the only order of business before the committee. She announced a meeting would be called if a quorum arrives, otherwise information provided at the work session would be furnished to other committee members and any interested parties. JIM NORDLUND, Director of the Division of Public Assistance in the Department of Health and Social Services, stated that he would be acting as the "ringleader" for a number of different agencies, most in DHSS, affected by the bill. He provided a list of names of people who would like to testify and/or respond to questions to committee members. He also stated that DPA is in the process of completing responses to questions raised by committee members. CHAIRMAN GREEN noted that SB 98 would be held over until Monday, but she requested any completed responses be submitted to the Chair at this time. Number 085 GLENDA STRAUBE, Director of the Child Support Enforcement Division, (CSED) in the Department of Revenue, gave the following testimony on the portion of SB 98 that pertains to paternity establishment. SB 98 does not permit that assistance be paid to a family with respect to a dependent child whose paternity has not been established. Paternity establishment can take between six months and three years, for many reasons. There are exceptions in SB 98, but it appears children will suffer because the process cannot be expedited any faster. CHAIRMAN GREEN responded that she understood that DHSS was very interested in establishing paternity as quickly as possible. GLENDA STRAUBE replied affirmatively. CHAIRMAN GREEN explained that was the reason Section 19 was included in SB 98, and asked if the exceptions listed were inadequate to serve that purpose. GLENDA STRAUBE said that CSED is trying very hard to speed up paternity establishment, however paternity is not considered established until the court rules it so. Number 116 CHAIRMAN GREEN asked how that section might be reworded so that the third exception still requires the parent to at least name the other parent. GLENDA STRAUBE suggested including language that states that if through no fault of the child's family, paternity cannot be established, the exception would be granted. CHAIRMAN GREEN stated staff would work with Ms. Straube to draft such language at a later time. GLENDA STRAUBE addressed the third exception on line 6, page 9 of SB 98, from personal experience. She was informed by the Department of Health and Social Services in California that she had a nephew she was unaware of. She raised the child but would not have been able to provide three names of possible fathers, since she had been estranged from the mother for many years. SB 98 would prevent a person in such a situation from receiving public assistance for that child. CHAIRMAN GREEN stated that the intent was to require the applicant to provide information. She asked Ms. Straube to assist committee staff in drafting suitable language to cover the type of situation discussed. GLENDA STRAUBE agreed, and expressed concern that the public perception of welfare reform is gender discriminatory because the absent parent is not part of the picture. Programs exist in other states that require unemployed, absent parents, who do not make child support payments, to participate in workfare or other programs. Such programs would increase the likelihood that the absent parent can start to pay child support and help the family get off of the Aid to Families with Dependent Children (AFDC) program. CHAIRMAN GREEN agreed with that approach and asked for assistance in drafting such language. SENATOR ELLIS cited figures provided to the committee that show about 800,000 welfare cases nationwide would be unnecessary if parents would, and could, pay child support. He asked if proportionally, similar figures would apply to Alaska. He also asked for other proposals that might be included in welfare reform that would increase child support enforcement and decrease the welfare roles. Number 226 GLENDA STRAUBE stated repeated studies which illustrate that people are far more likely to go off of AFDC if they receive child support payments, because that amount of money may raise the income level past the eligibility level. She noted other bills in the legislature that are important to ensure that more child support payments are collected so that families can get off of AFDC. One bill regarding administrative paternity establishment would eliminate the court's role, except for judicial review; that would shorten the process by six months. A second bill is required by the Federal Uniform Interstate Family Support Act, and would facilitate reaching obligors in other states. A third bill, on both the House and Senate sides, is the Occupational Licensing bill, which would help collect child support payments from self- employed people. She discussed the large number of professional people who do not make child support payments and hide behind their self-employed status. That bill provides for a driver's license suspension if people do not work out payment plans. Number 263 CHAIRMAN GREEN noted that the governor's bills on child support enforcement, SB 115 and SB 116, are scheduled to be heard in the committee. She commented that those bills may offer a forum to correct some of the current inadequacies. The intent of Section 19 in SB 98 is to help the department require parentage establishment, not to find children that could be eliminated from eligibility. SENATOR ELLIS thanked Ms. Straube for her comments, and for advertising his legislation regarding professional licensing and the suspension of driver's licenses. He noted the argument that pulling licenses from professionals would prevent them from working and paying child support which has been made toward both Rep. Davies' bill in the House and his bill in the Senate. He indicated that 98 percent of able-bodied white collar professionals, making good salaries are unwilling to pay child support. After such legislation is enacted they seem to immediately work out a payment plan to pay their child support. Within the bill, the individual has 150 days to contact the Child Support Enforcement Agency and work out a payment plan and a provision to issue temporary licenses is available if a further grace period is necessary. He pointed out that the focus has been on people in low wage jobs who are struggling to pay child support, and not on the people who could easily pay but merely refuse to pay. JIM NORDLUND thanked Chairman Green, and commented that the child support bills are extremely important to DHSS. He offered to work with the committee and other state agencies in drafting revisions to those bills. Number 322 SHANNON O'FALLON, Department of Law, felt that Section 2 which limits assistance to United States citizens, is unconstitutional under a U.S. Supreme Court case, Graham vs. Richardson. That case involved several states' laws which made non-citizens ineligible for public assistance. The Supreme Court found the laws to be in violation of equal protection rights. CHAIRMAN GREEN noted illegal aliens are prohibited from receiving assistance. She asked if any prohibition existed against legal aliens filing for benefits immediately upon entering the country. SHANNON O'FALLON explained that as long as the individual completed the steps to become a legal alien, he/she would be eligible. CHAIRMAN GREEN asked how cumbersome that process is. SHANNON O'FALLON did not have that information. SHANNON O'FALLON suggested replacing the word "equivalent" with the word "similar" on line 7, page 2. The language "substantially equivalent" has proved problematic in litigation. The same change would need to be made in Section 22 on page 10, line 13. SENATOR ELLIS asked about conviction for false statements, or welfare fraud, in another jurisdiction. SHANNON O'FALLON explained that the crime in another state must be linked to welfare fraud in order for benefits to be denied in Alaska. It would not apply to other types of convictions in another state. Number 380 SENATOR ELLIS asked Ms. O'Fallon to elaborate on the issue of conviction for welfare fraud. If there were a crime in Mississippi related to the misrepresentation of information on an application which was considered to be a type of welfare fraud, but not considered a crime in Alaska; how would such a situation be handled? SHANNON O'FALLON said that the crime in Mississippi would have to be substantially similar to a crime in Alaska. Regarding the mechanics of that provision, SENATOR ELLIS asked if it would require reciprocal agreements with welfare agencies in other states, or if the previous conviction would somehow become apparent during the application process. SHANNON O'FALLON was unsure how the process would work, however she did not believe the department would be responsible for finding out whether or not the applicant was convicted of a certain crime. JIM NORDLUND pointed out that most of the fraud detection done by DHSS is done at an administrative level. The lion's share of the work is inexpensive and productive and never appears on a criminal record. He suspected that is the system used by other states, therefore it would be impossible to find out when those determinations were made by other states. Tracking down criminal fraud would be difficult to do. He estimated very few people would be affected by Sections 3 and 22. The department believes that permanently denying benefits to a person who lied on an application is too harsh of a punishment. He suggested considering a phased sanction for those types of activities. Number 417 SENATOR SALO questioned whether applicants are required to sign a sworn statement on the application stating they have never been denied benefits in another state because of fraudulent statements. JIM NORDLUND replied applicants are required to sign a statement that the information they have provided is true. Penalties for lying are included. CURT LOMAS, Division of Public Assistance, DHSS, clarified that applicants are currently required to sign an unsworn statement as to the truth of the information they provided. They are not asked about out-of-state convictions because there is no penalty attached to state benefits for an out-of-state conviction for welfare fraud. He noted one exception, the Federal Food Stamp program requires that fraud disqualification be applied across state lines. That information is provided through a nationwide computer program, independent of the client. CHAIRMAN GREEN specified that the applicant would have to be convicted of fraud. This provision would not apply to an interviewer's summary opinion of an applicant. Follow-through would be necessary to obtain a conviction. She commented about the Food Stamp program and current investigative procedures used by the department. She indicated that the program may need a penalty to provide more teeth. SENATOR ELLIS asked Chairman Green about her previous comment about fraud information becoming available later. CHAIRMAN GREEN clarified that the purpose is not to do an intense investigation of all current recipients. She discussed setting up a program similar to the Food Stamp program in which the names of fraudulent recipients are kept on file. Number 463 SENATOR ELLIS questioned whether such a system would apply to new applicants only. CHAIRMAN GREEN replied affirmatively, unless information about an existing recipient came forward. The intent is not to demand a retroactive search. SENATOR ELLIS inquired as to how the information might come up later. CHAIRMAN GREEN stated that her comments were directed toward information found out by the agency (DHSS). SENATOR SALO discussed practical ways to get information about welfare recipients that would not require an increase in the number of department staff. She suggested adding a sworn statement to the application, and/or using food stamp information about fraudulent applicants to deny benefits in Alaska. PORTIA BABCOCK, staff to Chairman Green, clarified that permanent ineligibility is acquired when a person is convicted of welfare fraud. She asked whether penalties exist for a person who reapplies for food stamps elsewhere after being convicted of welfare fraud. CURT LOMAS believed that penalties are phased and that permanent disqualification may come after a third conviction. PORTIA BABCOCK stated that a criminal record search of all applicants would be cost prohibitive and may need to be clarified in the bill. She commented on using the food stamp fraud information to deny benefits to applicants. Number 516 SENATOR ELLIS asked if a person could get cash benefits while serving jail time. CURT LOMAS replied that prisoners are not eligible. SENATOR ELLIS asked if permanent eligibility extends to minor children. CHAIRMAN GREEN did not believe that permanent ineligibility status that applied to an adult would apply to a child; that is not the intent. PORTIA BABCOCK explained that there are many situations where the parent may not be eligible for benefits but the dependent child is. She specified that if an adult drops out of the JOBS program, they can be determined ineligible for benefits for a specific time period but the child is not ineligible. SENATOR ELLIS asked how a child would get food stamps and AFDC when the parent is declared permanently ineligible for benefits. CURT LOMAS clarified that the ineligible person could still apply for benefits, but the benefit amount would be adjusted to remove the amount designated for the disqualified person. SENATOR ELLIS asked if CSSB 98(HES) would extend the status quo. PORTIA BABCOCK stated, to her understanding, current provisions for that situation would apply. JIM NORDLUND noted that most people who lie on an application lie about their income. When their real income is disclosed, it is usually higher, therefore they would become ineligible anyway. SENATOR ELLIS asked, if the applicant's income decreased in the future, would that person be able to apply and receive benefits for the dependents. CURT LOMAS stated that federal programs would require a waiver, and obtaining a waiver is difficult. Number 566 SENATOR ELLIS commented that the possibility of sharing welfare fraud information among states may not occur due to federal budget cuts. CURT LOMAS noted the proposal in the AFDC program two or three years ago which required the disqualification of convicted applicants across state lines. Congress and the Administration reviewed the costs of establishing such a program, and discovered it would cost money, rather than save it. JIM NORDLUND stated that while fraud is not rampant, it does exist. The House Finance Committee has included funds in the DPA budget for an additional six investigators. TAPE 95-21, SIDE B SENATOR ELLIS discussed his support of the alleviation of welfare fraud. He felt it is heinous, offensive to society, and undercuts support for people who really need it. SHANNON O'FALLON continued with the sectional analysis. Section 4 establishes a residency requirement of 30 days prior to applying for assistance. She expressed concern that the bill needs to be clear regarding the state's purposes, for litigation reasons. CHAIRMAN GREEN asked if the 30-day residency requirement has been accepted by the court. SHANNON O'FALLON explained that she had only reviewed court cases in which a one-year residency requirement was struck down. JIM NORDLUND said DHSS does not have a position on the 30-day residency requirement as it is a policy call by the legislature. DHSS has not determined whether many people come to Alaska to collect benefits, the department is trying to collect empirical evidence. Number 557 SHANNON O'FALLON pointed out that Section 9 contains sanctions but does not specify for how long those sanctions would be imposed. Additionally, some of the provisions under (d) do not contain a "no good cause" exception, which could lead to problems. SENATOR ELLIS asked if the phrase "to the extent allowed under federal law" on line 4 of page 5 would apply to the federal law in place when CSSB 98 (HES) is enacted, or whether this would change with changes in federal law. SHANNON O'FALLON felt that depended upon the effective dates in the bill, Section 39. The effective date of this measure is subject to what federal laws are passed. Under subsection (b), the attorney general and DHSS would determine when this law goes into effect, which would not be until federal law and federal regulations go into effect. SENATOR ELLIS said that the effective date clause makes the bill extremely prospective. He questioned the anti-federal sentiment of many legislators, and asked Chairman Green if that philosophy is behind the references to federal programs contained in SB 98. PORTIA BABCOCK explained that SB 98 intends to reflect the volatile nature of the law at the federal level and the many changes that are expected to occur. CHAIRMAN GREEN noted further complications with match programs. SB 98 is designed to allow state programs to continue if the federal program is changed to a block grant system. Number 485 CURT LOMAS commented that this provision of current law relates specifically to the JOBS program and sanctions for noncompliance. The references in paragrahps (2) and (4) do not relate to jobs, but to other provisions in the bill. The sanctions for failure to participate in the JOBS program are already specified in federal law. In fact, those sanctions are considerably greater than a 20 percent penalty in almost every circumstance. CHAIRMAN GREEN expressed the need to have an aggressive workfare or JOBS program within the state; a similar noncompliance factor could be built in. CURT LOMAS suggested that if a penalty is attached to another provision, the penalty be included in the section covering that provision. SHANNON O'FALLON noted that Sections 1, 3, and 4 contain "no good cause" requirements; she suggested including the same provision in other sections. That provision would allow a person in a certain situation, such as sexual harassment on the job, to continue receiving benefits if they left a job. PORTIA BABCOCK indicated that the "no good cause" provision is not specified in each section, but is included in Section 17. SHANNON O'FALLON pointed out that the provision is not included in Section 9, paragraphs (1), (3), and (4). Section 2 contains the exception. Number 452 CURT LOMAS noted that problem does exist in paragraph (4). JIM NORDLUND suggested addressing those issues when they review the section pertaining to school. SHANNON O'FALLON explained that Section 20 is a personal responsibility statement. She commented that the section may need clarification, it seems that the governor would sign all the forms. Section 24, regarding illegal aliens, may contain confidentiality problems. Federal regulations governing AFDC, food stamps, and Medicaid do not allow sharing that type of information. CHAIRMAN GREEN said that issue is being researched. JIM NORDLUND stated that it would be unlikely that the state could receive a waiver for that. CHAIRMAN GREEN indicated that the issue is being considered in the new federal law. SENATOR SALO inquired as to the availability of the statistics on the number of recent immigrants to Alaska receiving benefits. CURT LOMAS replied those figures were requested and should be available next week. SENATOR ELLIS informed everyone of the complaints he had heard. The complaints often come from older white Alaskans, especially in regard to longevity bonuses. In his research, the recipients are often Korean Americans or legal aliens, entitled to the benefits. He believed many of the complaints were based on racism. CHAIRMAN GREEN felt that the law should specify that illegal aliens should not be entitled to benefits. SENATOR SALO recommended obtaining the statistics prior to passage of the bill. She felt Section 24 should be eliminated if it only applies to a very small number of people, since the potential for constitutional challenge exists. CURT LOMAS clarified that current law, both state and federal, prohibits benefits to illegal aliens, with the single exception of Medicaid. Medicaid provides for emergency medical services in life threatening circumstances. The debate in Congress on this issue has shifted toward further benefit limitations to legal immigrants, but not a categorical denial of assistance. SENATOR ELLIS asked if the department receives complaints about legal aliens receiving benefits. CURT LOMAS said they receive calls frequently. He explained that applicants have to provide legal documents verifying legal resident status, and the department has to confirm the legality of the documents with the INS. Number 351 SHANNON O'FALLON discussed Section 32, which contains a two-tier payment system. The two-tier system draws distinctions between people who have lived in Alaska longer than others. A Ninth Circuit federal court case, Green vs. Anderson, struck down a similar two-tier system. She did not believe Section 32 would withstand a constitutional challenge because it infringes on an individual's right to travel, and interstate migration. She explained that Section 32 provides for different payment levels; recipients who have resided in Alaska for less than six months are paid at the level of the previous state in which they collected benefits in. CHAIRMAN GREEN said Section 32 was modelled after the Wisconsin waiver, which was approved. SHANNON O'FALLON noted that there had been no court test of that waiver to her knowledge. PORTIA BABCOCK specified that most of the states that have applied for waivers have been denied by the federal government. Wisconsin was granted this particular waiver; it was approved by the Clinton Administration and has been in operation since July of 1994. SENATOR SALO asked what factors contributed to the approval. PORTIA BABCOCK explained that Wisconsin agreed to pay the same rate paid by the previous state which was one factor. SENATOR SALO suggested that Alaska may have a completely different circumstance because Alaska has the highest cost of living. SENATOR ELLIS commented that this has been very popular among legislators nationwide. SENATOR SALO requested information on the number of applicants in that category. CURT LOMAS indicated data is available on length of residency in the state, which he would provide to the committee. JIM NORDLUND stated that the department believes that Section 32 is unconstitutional and may address a situation that does not exist. Number 297 SENATOR SALO remarked that she had taught children whose families arrived in Alaska in search of economic opportunity, but ended up living in extreme poverty. She did not feel people in extreme cases like that should be denied benefits. CHAIRMAN GREEN clarified that the bill would not deny benefits to those people, but the benefits received would not be at the Alaska rate until they had resided in Alaska for seven months. PORTIA BABCOCK pointed out that there is a 30-day residency requirement before an individual is eligible to apply, therefore the applicant would not receive the lower rate until after that time period. There is an exception for people who work for 90 days immediately upon arrival. Those people would be eligible right away. SENATOR ELLIS inquired as to how a person arriving from another state would apply. JIM NORDLUND replied that this section would add another level of complexity to the eligibility determination computer system, which would have to be reprogrammed. Additional costs would be associated with those changes. CHAIRMAN GREEN felt the costs should be minimal since the number of applicants affected would be very small. JIM NORDLUND indicated that the computer program would still need to be reprogrammed for the occasional applicant that fits that category. CURT LOMAS explained when the first waiver packages were considered, waivers were approved: if a two-tier system was used; and if the other state's eligibility rules were used, which vary in every state. The federal government has since allowed for some simplification. He stated DHSS would negotiate with the federal government, if faced with applying SB 98, for the least administratively burdensome method. That could involve surveying states and obtaining their benefit tables. CHAIRMAN GREEN stated the information would not be too difficult to replicate. CURT LOMAS noted states use different ways of calculating payments and different items are included in the payments. Number 227 SENATOR ELLIS pointed out that Alaska does have the highest AFDC rates, and other states have different types of programs as well. SHANNON O'FALLON reiterated her concern about serious constitutional problems with Section 32. JIM NORDLUND discussed Section 5 which reduces benefit reductions on an average of seven percent. The department is opposed to Section 5. DHSS recognizes the need to reduce the amount of money that goes toward AFDC payments, but through reducing the caseload rather than benefits. DHSS suggests reducing the caseload by vigorously pursuing work opportunities for AFDC recipients. SENATOR SALO asked whether the reduction to $463 per month would be significantly below the poverty level in Alaska. CURT LOMAS stated that the 1994 poverty level for a one-person household is $767 per month. The $463 amount is for a child living with an adult who is not needy. SENATOR SALO referred to page 3, and noted a pregnant woman eligible for assistance would receive $437 per month. CHAIRMAN GREEN asked if the poverty level data refers to cash only. CURT LOMAS recollected it includes cash income only. CHAIRMAN GREEN clarified that other programs, such as food stamps, rent assistance, and Medicaid would also be collected. SENATOR ELLIS indicated many of those programs are being reduced dramatically, or eliminated. CHAIRMAN GREEN felt the figures in CSSB 98(HES) could be considered generous compared to the cuts made by the federal government. She noted that the seven percent reduction may not be germane depending on changes made to the federal program. Number 098 SENATOR ELLIS remarked there is extreme uncertainty about what the federal government is about to do, and that Alaska is not in a unique position. The same argument for inaction was used last year in regard to health care reform. He asked Mr. Nordlund if past cuts in cash payments, Medicaid, and co-pays, had any affect on the governor's decision to oppose the rate reductions. JIM NORDLUND replied it most likely did. He added that HB 67, which passed several years ago, eliminated the COLA from AFDC and APA and reduced the payment. The effect of that, in this fiscal year, is a reduction of $15 million in benefit pay-outs. SENATOR ELLIS indicated SB 98 is not the first proposed reduction in welfare benefits; at least four major changes have been made to benefits in the past few years. JIM NORDLUND pointed out that a person eligible for AFDC is not automatically eligible for other programs, except Medicaid. Twenty percent of people on AFDC receive housing assistance and sixty percent of AFDC recipients receive food stamps. TAPE 95-22, SIDE A Number 005 JIM NORDLUND said that there is very little money left after the essentials are paid, at the present benefit level in the AFDC program. He explained the information that he had handed out to the committee members. SENATOR SALO asked if page 3 of the handout was the most common example of a public assistance recipient. JIM NORDLUND replied yes, a single mother with two children would be the typical example. CHAIRMAN GREEN asked for clarification of the source of the funding for the program according to the chart on page 1. CURT LOMAS explained that APA supplements the federal SSI program up to the state needs standard. APA is 100 percent general fund; SSI is 100 percent federal. JIM NORDLUND pointed out that both programs attempt to achieve a needs standard. The AFDC program is 50/50. Food Stamps and Energy Assistance are 100 percent federal. Number 081 In response to Senator Ellis, CURT LOMAS said that the Low Income Home Energy Assistance Program, LIHEAP, has been scheduled for another cut from the current budget. JIM NORDLUND explained that LIHEAP was a portion of the Congressional recision package which would affect next year's heating bills for needy families. CHAIRMAN GREEN asked how many people would be impacted by that. JIM NORDLUND said he would get that information for her. CHAIRMAN GREEN inquired as to where housing assistance showed up. How many people that are served through these programs also receive Alaska Housing or assistance through housing assistance programs and what is that amount? CURT LOMAS answered that roughly 20 percent of their caseload of AFDC and APA receives housing assistance. He directed Chairman Green to the boxes which indicate the less subsidy amount which is not included in the numbers for the department's programs. PORTIA BABCOCK asked how that subsidy would affect eligibility for AFDC. CURT LOMAS said that it would not. In response to Chairman Green, CURT LOMAS explained that rental subsidy is based on a family's income which would take into account AFDC assistance that a family might receive. PORTIA BABCOCK pointed out that there is a substantial inequity between the 20 percent who receive housing subsidies and those that do not. CURT LOMAS agreed and stated that often AFDC families that receive housing subsidies are the only families with any money left after paying for the essentials. Number 164 JIM NORDLUND noted that Section 6 was a new section to the CS which would require notification of the JOBS program to all applicants. This section would also require that each applicant develop a self- sufficiency program which the department supports in principle. He informed the committee that DPA already notifies all AFDC applicants about the JOBS program. He explained that a portion of the participants in the JOBS program are volunteers and a portion are compelled to participate. CHAIRMAN GREEN asked if that 20 percent was limiting. JIM NORDLUND clarified that their goal is to have 20 percent of the basic caseload participate and 50 percent of the unemployed parent caseload participate in the JOBS program. The program becomes more labor intensive for the division as well as the limitations in funding. Mr. Nordlund pointed out that the requirement for eligibility technicians (ET) to develop a self-sufficiency plan for each participant would take time and be reflected in the fiscal note. They want to do this. He noted that a budget increase for additional eligibility technicians had passed in the House Finance Subcommittee. The caseload should decrease allowing ETs more time to develop self-sufficiency plans. He asserted that even with the requested budget increment, the department would not be able to adequately do the self-sufficiency plans for everyone. He explained that if an ET spends more time in developing self- sufficiency plans then they have less time to ensure accurate payment levels are being used. CHAIRMAN GREEN inquired as to what language would address Mr. Nordlund's concerns regarding the self-sufficiency plan. JIM NORDLUND said that they would give that some thought. Number 215 JIM NORDLUND commented that if the self-sufficiency plan applied to the entire caseload then it should be taken outside of the JOBS statutes. CURT LOMAS specified that the self-sufficiency provision in SB 98 is addressed under the JOBS statutes rather than the AFDC statutes which is where the language should be addressed. SENATOR ELLIS suggested that the assumption of the self-sufficiency language seemed to imply that everyone could become self- sufficient. He felt that a case management plan with those of various ability levels would be advisable; however, how would you categorize the various levels of mental and physical disabilities that people have while developing a plan to reach their highest level of functioning and independence. He pointed out that self- sufficiency should be a flexible term. JIM NORDLUND stated that in this time of limited resources, the division wants to be as efficient as possible while working with those who have the best chance of succeeding in the work place. He expressed the need to recognize that there would always be individual's who would require public assistance even instances that are not specified in the exceptions of SB 98. He emphasized that a case management approach would be implied with the self- sufficiency plan. He noted the Independence Project in Juneau and the Anchorage program of Homegrown Self-Sufficiency. The message to be sent to those applying for AFDC benefits is that these benefits are temporary help and the division will work with the applicant in becoming employed. SENATOR ELLIS inquired as to who does the functional assessment of those applying for AFDC. He discussed an example of a case in which a person could look able-bodied enough to be employed although they were mentally ill. He agreed that the self- sufficiency goal was important, but caution should be taken. He explained that ETs are not currently trained to do functional assessments of an individual's physical or mental health; more than an ET would be need for this provision. He did not want to create a new welfare trap that could categorize a person as able to become self-sufficient while the person could not actually reach 100 percent self-sufficiency. Number 327 JIM NORDLUND mentioned that with this self-sufficiency assessment, ETs would have a broader job description. With the limited budget, ETs would have to make preliminary assessments and then offer referrals. CHAIRMAN GREEN announced that she intended to recess and reconvene at 1:30 p.m. SENATOR ELLIS commented that it was unfortunate that the two absent majority members could not be present for this meeting. JIM NORDLUND recommended that when the meeting reconvened that other divisions and departments be allowed to testify in order that they might be able to return to their jobs. CHAIRMAN GREEN requested the transcripts for the afternoon portion of the meeting. She also suggested that if there was any written back up from any of the departments or divisions. The work session recessed until 1:30 p.m. Number 367 The work session was called to order at 1:39 p.m. SENATOR ELLIS announced that he had passed out a memo from Legal Services regarding the constitutionality of the two-tier payment system. JIM NORDLUND handed out information regarding the myths and facts about welfare and the number of able-bodied persons included in the AFDC caseload. BARBARA THOMPSON, Division of Education Program Support for the Department of Education, expressed concern with Section 6. The increase in referrals to the JOBS program which Section 6 would indicate, would necessitate an increase in funding. Sections 9 and 17 pose the following concerns. First, how would the reporting of attendance to DHSS take place? There could be costs associated with the development of a reporting system. She noted that all schools do keep attendance records, however, all schools may not define attendance in the same way. Differences in definitions of an excused absence or adequate attendance would be left to the school to settle. The second concern would be in the confidentiality of the transmittal of the attendance records. The transmittal of attendance records for a specific purpose from one state agency to another may be acceptable. Ms. Thompson indicated that this would need further research in the areas of the Freedom of Information Act and the Privacy Act. The last concern relates to the position in which these two sections place school staff. Sections 17 and 9 seem to be diametrically opposed to the assumption that these sections would intend to help students have better attendance, help everyone appreciate the school system, and appreciate education. School districts would become holders of the purse strings and would then become the entity that initiates or provides the information that gets the family AFDC payment reduced. Ms. Thompson did not want to have parents and teachers in an adversarial role. CHAIRMAN GREEN noted that this was due to some school employees in her district who expressed frustration that the attendance rate is so sketchy for those students who need to be in school the most. These sections were not viewed as a burden to them. Number 464 SENATOR SALO agreed that school attendance is a problem, but it is not just limited to poor children. She explained the possibility of the danger in creating a differentiation in how one would handle record keeping for poor children versus other children. She pointed out that when school districts report their attendance to the Department of Education, they do not include the names of children. Under SB 98, the names of students would need to be tracked. BARBARA THOMPSON did not feel that this provision would promote good will about the educational system in a local community in the long-term. JIM NORDLUND remarked that this is a project that is currently going on in New Jersey, under a waiver. The preliminary results are not too promising. CHAIRMAN GREEN indicated that schools seem to already be fairly involved in the reporting of things about students and families. She said that it was a point well taken. JIM NORDLUND explained that Sections 7 and 8 are almost identical to the governor's bill. However, he expressed the need to ensure that this is not gender discriminatory. There are two parents responsible for a child. Typically the mother takes care of the children and the father is absent. The father or the father's family should also be held responsible for the care of the child. CHAIRMAN GREEN noted that there should be an amendment addressing that issue. Number 523 CATHY TIBBLES, Division of Family and Youth Services (DFYS), recognized the advisability of having young adolescent parents living in supportive and structured environments. They anticipate that there would be an additional load in interviewing, investigating homes for their safeness, and time involving mediation. She also anticipated contracting with private clinical social workers to deal with this increase in various areas. She noted that DFYS would be developing fiscal notes when they had the final SB 98 before them. SENATOR ELLIS inquired as to the thoughts of Ms. Tibbles or others about the requirement of parental notification and its affect on the abortion rate. He indicated that some believe that the abortion rate would increase with the enactment of such legislation; when parents realize they must house their daughter and her child, their granddaughter, the parents would more often counsel their daughter to have a safe and legal abortion. CATHY TIBBLES said that they have not discussed that issue since DFYS has not been so involved with pregnant teens. SENATOR ELLIS expressed interest in the opinions of DFYS regarding this issue. SENATOR SALO was unsure of the worthiness of this provision even if its in both SB 98 and the governor's bill. The numbers seem to indicate that this would affect 100 girls. CATHY TIBBLES stated that perhaps 50 percent of the pregnant teens would not want to remain in the home for whatever reason. SENATOR SALO asked if there were circumstances that did not fit the exceptions under SB 98. Would some teen mothers and their babies be better off on their own in some cases? She commented that the major motivation for changing this law could be financial or related to the quality of the care of the child. CATHY TIBBLES agreed that some teen mothers would be better alone and not living in their parents' house. She asked if an emancipated minor would be exempt from this provision. If so, that would afford an alternative for those teens that are mature and capable of caring for a child alone. SENATOR SALO noted that SB 98 would require that the minor be emancipated for a year prior. CURT LOMAS said that emancipation was not an exemption. He clarified that if the minor had lived away from home for a year or had been married for a year the minor would be considered emancipated. Under state law, emancipation does not constitute an exemption. TAPE 95-22, SIDE B Number 585 SENATOR ELLIS asked Mr. Nordlund if the governor's bill was financially motivated. JIM NORDLUND felt that the best interest of the infant would be the motivation of this provision. He said that the department judged that a child would be better situated in an extended family assuming that is a safe and loving environment. In some ways the opportunity to move out of the home is created through the granting of benefits. He assumed that the Division of Family and Youth Services (DFYS), which is already overburdened, could reasonably determine whether a juvenile is in a relatively safe environment. CHAIRMAN GREEN noted that she had thought that the Mat-Su Alternative School would not like this because the majority of their female population is teen mothers. The school has a daycare center and there are living arrangements for the mothers and their children. She pointed out that the staff and principals of this school want such a provision because some people are being encouraged by the program. Unencumbered teens are not encouraged to move out on their own. JIM NORDLUND suggested that an emancipated child should be added to those being exempt. SENATOR ELLIS asked Chairman Green if she had a guess about the effect on the abortion rate. CHAIRMAN GREEN did not. She did not know if it would be accurate to assume that there are a great number of parents who would foster abortion. SENATOR ELLIS said that some statistics illustrate that the majority of parents faced with giving advice to their teenaged daughter regarding her pregnancy would counsel the teen to have an abortion. The clause placing the teen mother in the extended family could become an incentive for the parent to counsel for an abortion if the parents do not want to deal with another child. He predicted that placing the teen mother in the home could increase the abortion rate. Number 510 LOREN JONES, Director of the Division of Alcohol and Drug Abuse, expressed concern with the provision regarding drug testing. He agreed with the goal of the section which would be to encourage persons on assistance to seek treatment. The abuse of alcohol and drugs poses a barrier for persons getting off assistance, receiving employment, getting through training, keeping their children, and keeping a safe environment. He emphasized that for many gaining assistance is the first step towards recovery. Many of these people have few job skills. Many of the women are not in a situation that would be considered conducive to recovery and if they return to that environment the treatment effects are lost. He explained that for many women, receiving assistance allows them to get away from an abusive spouse, have some economic stability for themselves and their children, and have a safe environment. Mr. Jones was concerned with the penalty for the noncompliance in treatment. People in treatment have a lot of starts and stops. Barring someone from receiving assistance for two years would take away the incentives to those people. Urine testing or other testing to measure treatment compliance or failure would pose a barrier. People relapse during treatment and after recovery. He stated that the bill seems to be unclear as to the purpose of the testing. He noted that the most common test is the urine test which is not sensitive to alcohol consumption. Mr. Jones explained that there are some confidentiality issues that are of some concern. Information obtained from tests done at a treatment program are not available to anyone outside the program. Therefore, the testing or sanctions on welfare would need be to done outside of the treatment program. Currently, testing is done in an effort to measure the progress of the client and compliance to the program. He informed everyone the they do place sanctions such as discontinuing treatment and changing the form of the treatment, but the sanctions attempt to keep the client connected to the treatment program. He pointed out that some of the sanctions in SB 98 would pose a barrier for individuals wanting to return to treatment. Mr. Jones pointed out that women on AFDC that are dependent on alcohol and drugs are a minority among the AFDC population. If these women can remain in treatment, then their economic situation may allow them to leave a situation that may not be conducive to recovery. He emphasized that for that group, remaining on assistance even if they relapse is important for the treatment program to help these people. He noted that there may be ways that are currently being used to encourage compliance. Number 421 SENATOR SALO asked Mr. Jones if he was suggesting that paragraph (2) be eliminated from Section 26 and leave the remainder of the section. She inquired as to Mr. Jones' thoughts regarding the sanctions on those who refuse to participate. LOREN JONES did believe that there should be sanctions for those who have been shown to have a drug or alcohol problem that interferes with their participation in the JOBS program or a training program. Mr. Jones suggested that if the sanction removed the person from assistance then they should be allowed to reapply for assistance if they resume compliance with the treatment program and not have a two year wait. Most people enter substance abuse treatments due to a crisis. SENATOR ELLIS pointed out the "if available" language and inquired as to the status program coverage and access across the state. LOREN JONES addressed the budget cuts the Division of Alcohol and Drug Abuse have faced, approximately $3 1/2 million decrease in funding. Services in six communities were removed. There are approximately 500 people on the wait list for treatment. He discussed the new allowance to bill Medicaid for treatment services and noted that there are many restrictions with Medicaid. Mr. Jones expressed concern with the sanctions imposed on persons who do not maintain treatment when the division itself has many pressures regarding the number of persons seeking treatment. He explained that the language "if available" could mean if the treatment is available in ones community. Treatment is usually not available in communities with a population under 700 or 800. The language "if available" could also mean if the appropriate treatment is available. Number 335 CHAIRMAN GREEN asked if there was a way to rephrase this language to indicate that it is not the intention of these assistance programs to aid and abeit alcohol and drug abusers to continue their lifestyle. She stated that it is not our responsibility to fund abusers. LOREN JONES understood her sentiment. He explained that the division views alcohol and drug abuse as a disease that among some is a behavioral problem and among others the abuse is not a matter of choice. In response to Chairman Green, Mr. Jones pointed out that society pays for abuse problems in emergency rooms and highways. He was not convinced that sanctions on persons on welfare would be the manner in which society should illustrate displeasure with others diseases or behavioral problems. JIM NORDLUND agreed that the notion that someone would use assistance to purchase alcohol or drugs is intolerable and DPA would like to deal with this problem. He explained that a case management approach would be beneficial in attacking this problem. CHAIRMAN GREEN asked if there was another system besides a cash system. SENATOR ELLIS offered the voucher system as an alternative. CHAIRMAN GREEN said that she did not care if the abuse was by choice or a disease. It is not fair if the behavior continues and someone else is deprived of funding. LOREN JONES agreed that case management and voucher systems may be a way to a deal with this dilemma. He noted that an integral part of the treatment program is learning how to manage money. SENATOR ELLIS pointed out that voucher systems or other manners besides mailing checks would require more state employees which has been a barrier in the past. SENATOR SALO requested the consideration of deleting paragraph (2) of Section 26 and inserting "cash" between "for" and "assistance" in subsection (b). This would eliminate the receipt of cash from those individuals who choose not to participate in a treatment program, they may still receive food stamps or rent assistance. She expressed objection to the mandatory testing provision. She noted that people who view assistance programs negatively point to fraud and the use of assistance money to buy drugs and alcohol. SENATOR ELLIS clarified that the loss of the benefit for two years only applies to the adult, the child would still receive their benefit. CHAIRMAN GREEN pointed out that the problem remains, cash in the hands of the adult. Number 234 JIM NORDLUND felt that this provision provided a good incentive with losing the benefit, however, there would be no incentive to return to treatment if the benefit cannot be reinstated until two years has passed. The incentive would be to allow the receipt of the benefit while the person attends treatment. CHAIRMAN GREEN said that this issue would be reviewed. The message must remain that it is not the intent that these persons do not seek treatment if they want to continue to receive public assistance. SENATOR ELLIS asked Mr. Nordlund if his division planned to cost out the drug testing provision in their fiscal note. JIM NORDLUND stated that nothing would be done until there is a firm idea of the final bill leaving the committee. In response to Senator Ellis, CHAIRMAN GREEN explained that there were amendments which would be incorporated into a new CS. JIM NORDLUND stated that DPA, Governor Knowles and the Administration oppose Section 10 with its rateable reduction of 1.7 percent to APA. CHAIRMAN GREEN informed him that would be deleted. JIM NORDLUND continued with Section 11 regarding interim assistance payments. He pointed out that when persons are initially denied benefits, they are determined to be eligible upon appeal. This section would cut off benefits to persons who are disabled. Number 171 CURT LOMAS noted that the following information is approximately a year old. He informed the committee that last year 69 percent of the applicants for Supplemental Security Income (SSI) for disability benefits were denied. More than half, 54 percent, of the applicants who were denied appealed and 60 percent of those who appealed were found to be eligible for benefits. Mr. Lomas explained that the interim assistance program was created by the federal government due to the lengthy process in determining the eligibility of disabled applicants. Interim assistance provides a minimum means in which to live while the applicants move through the process. The appeal process is a three tier administrative appeal process. He noted that before persons receive interim assistance, they are screened, receive a medical examination and a physician's opinion as to the possibility of their meeting the social security criteria. SENATOR ELLIS asked if this section was crafted with the concern of cost savings or fraud. CHAIRMAN GREEN explained that those persons who go through the system, appeal denial and remain denied upon appeal; their benefits or funds cannot be recovered. CHAIRMAN GREEN inquired as to the number of persons who would be eligible for other programs during this same time. CURT LOMAS explained that this would be the entry for Medicaid. They may be eligible for some services of the General Relief Medical program and Food Stamp benefits. He clarified that SSI is a component of APA. JIM NORDLUND added that SB 101 was passed out of the last legislature, but Governor Hickel vetoed it. SB 101 had the same provision. He handed out copies of the veto memo in which Governor Hickel expressed that the interim assistance provision would leave many disabled Alaskans without money to meet their needs while pursuing claims for federal assistance. Mr. Nordlund pointed out that Section 12 is conforming to Section 13. Section 13 would require persons found to be ineligible to repay their SSI benefits. He indicated that the major problem with that section would be the difficulty in collecting money from those persons. He was unsure as to the cost of creating a collection effort in comparison to what could be recovered from these low income individuals. Number 066 CHAIRMAN GREEN inquired as to an effective remedy to this problem. Would the remedy lay in the initial screening or the need to clarify the criteria? How could the entry process be improved in order to avoid the 20 percent of persons who are found to be eligible after appeal? CURT LOMAS said that the remedy would be for the federal government to eliminate this cumbersome process. Since that would be unlikely to change... CHAIRMAN GREEN asked if that was being considered for change at the federal level. Mr. Lomas said no. CURT LOMAS explained that investing in a more rigorous evaluation at the entry level could be a manner in which to improve screening. That would involve additional costs. He did not know how the process would work or how cost effective that would be. He discussed the history of SSI and the repayment of funds from individuals denied benefits. Currently, when a Medicaid eligibility determination is at an equivalent level of standards then an individual could be qualified for Medicaid and APA. TAPE 95-23, SIDE A Number 002 Mr. Lomas did not know the cost effectiveness of a system which would eliminate the need for interim assistance. He agreed that it could be a possibility that would require some analysis. JIM NORDLUND handed out information regarding which demonstration projects DPA felt could be done statewide regardless of what is done at the federal level, the projects that are likely to result in good outcomes with some testing, and those that seem to be high risk in some manner. Mr. Nordlund commented that the governor's bill also has a time limit as does SB 98 in Section 16. However, the governor's bill applies the time limit to those AFDC recipients having a reasonably good likelihood to enter the job market and successfully keep employment. SB 98 uses too broad of an approach with a harsh limit; the provision in SB 98 would apply to too many people. Under SB 98 some people will fall through the cracks. The five year limit in SB 98 does not allow for adequate transition between welfare and employment; it will not work. CHAIRMAN GREEN indicated that the last three years of the five years could be the transition period. JIM NORDLUND stated that establishing a limit would seem to indicate the need to supply people with job training or positions before the time limit ends. The limit in SB 98 is not an effective manner in which to deal with this population. CHAIRMAN GREEN stated that now there is no reason for people to think about the cessation of receiving benefits. JIM NORDLUND pointed out that there will always be persons on welfare. He did agree that there are able-bodied persons who due to whatever reason are receiving assistance. He noted that there are also federal barriers which seem to keep individuals from seeking employment. Mr. Nordlund emphasized that the limits should target those individuals who would have the most success at becoming employed. He suggested that the five year limit be narrowed and applied to those with the best possibility of becoming employed. Furthermore, providing job training to these individuals would be even more beneficial in moving them from welfare to work. Number 130 CHAIRMAN GREEN thought that providing job training was the responsibility of the JOBS program. JIM NORDLUND specified that the JOBS program only applies to a portion of the AFDC population. The provision in SB 98 applies to the entire AFDC population. Mr. Nordlund recognized the self-sufficiency provision as an improvement to SB 98. DPA does believe in the concept of time limits, but applying it too widely is not a suitable approach. CURT LOMAS indicated that it is hard to determine how many of the AFDC caseload are able-bodied. Although known anectdotally, the data does not illustrate that the majority of those needing public assistance are at best moderately functional. Many people are not well equipped to support themselves in the long-term. He emphasized that an absolute time limit would leave these people with no where to turn. Those folks will always be present and ultimately their children would suffer. He suggested that an expansion of the good cause categories may moderate some of the impacts of such a provision. Number 194 SENATOR ELLIS inquired as to the number of persons on the waiting list for the JOBS program. VAL HORNER, JOBS Program Officer for DPA, said that the program serves approximately 2,000 people a month which is nearing the maximum capacity for the program. SENATOR ELLIS asked if the program could serve all those welfare recipients who want to participate in this program. VAL HORNER replied no. Currently, the Alaska JOBS program serves approximately 35 percent of the AFDC population. That does not include the native population. Ms. Horner emphasized the importance in recognizing that the JOBS program does reach a limit in which taking in more participants limits the time available to serve the client and help them gain employment. Ms. Horner indicated that the remainder of the AFDC population could be considered on the waiting list for the JOBS program. JIM NORDLUND discussed Section 18 and reiterated Ms. O'Fallon's suggestion to add a good cause clause to this section. There are exceptions to consider. He recommended that the provision should not be a permanent reduction in benefits. He said that they agree with the concept of Section 20, but placing contractual language in statute may not be appropriate. Circumstances change and that language could pose difficulties. He suggested that the section contain the intent of the personal responsibility agreement. He offered to present language addressing this agreement in regulation. Number 264 SENATOR ELLIS asked if there was a federal bill that would eliminate the JOBS program. JIM NORDLUND replied yes. PORTIA BABCOCK specified that the JOBS program would become a block grant. JIM NORDLUND stated that DPA does not support Section 21 and the provision that would not allow the receipt of benefits of a child conceived while under welfare. The additional money that a mother would currently receive when she has another child would not be an incentive, if that is the concern of this provision. The governor's approach provides an additional effort with pregnancy prevention which seems to be the most effective approach to reducing unwanted children to welfare recipients. CHAIRMAN GREEN noted that New Jersey experienced a 29 percent reduction in the birth of children to AFDC recipients when such a provision came into affect. JIM NORDLUND requested that information. The bill in Congress was almost lost due to such a provision such as Section 21. The concern was regarding the possible increase in the number of abortions. JIM NORDLUND addressed Section 25. This is an untested idea which is worthy of consideration. He noted that it could reduce the caseload. He was unsure of how much money this section would actually save. Number 332 CHAIRMAN GREEN pointed out that the reason the language "may" was included was to allow the department flexibility. JIM NORDLUND suggested that transitional benefits after marriage may need to be tested before applying on a statewide basis in order to discover if the provision would save benefit payments. He recommended the consideration of allowing the benefit to only continue for the child, not the mother. Mr. Nordlund noted that Section 27 of SB 98 seems to be modeled after the governor's approach to the diversion program with one crucial difference. Therefore, the department cannot support this provision in SB 98. He stated that the diversion program intends to be an incentive. He explained that under SB 98, 15 percent of the AFDC caseload would be required to fall under this provision which would ultimately mandate a disqualification for a portion of that 15 percent. The eligibility technicians would be placed in a position of determining who to disqualify and who to qualify in order to meet their 15 percent threshold. CHAIRMAN GREEN asked if changing "shall" on page 12, line 6 to "may" would resolve that problem. JIM NORDLUND did not seem to understand why the percentage would remain and how it would follow with the new language. CHAIRMAN GREEN stated that the governor's bill had a percentage. PORTIA BABCOCK noted that the governor's bill had language to the affect of up to 12 percent. CURT LOMAS did not recall any language to that affect in the governor's bill. JIM NORDLUND also objected to the disallowance of cash payments. He pointed out that there are situations in which the problem is cash for these people. For example, a person could become employed as a laborer which is required under OSHA to have steel-toed boots. These boots could cost $100 and under the provision in SB 98 that would not be allowed. Mr. Nordlund noted that the voucher system could be a possibility in order to address the concerns about using the money for the intended purpose. There would be some administrative problems with the voucher system. He reiterated that cash and what it would buy is the problem not necessarily Medicaid benefits. The department shares the committee's concerns regarding the improper use of the money. Mr. Nordlund said that Section 29 is good. The governor's bill has the 100-hour rule, waiver, and the increase in the auto allowance exemption. He pointed out that the earned income disregard would cost some money in the beginning, but it should provide an incentive. Although the earned income disregard has not been tested, it is worthy of some review. Section 30, workfare, is similar to that in the governor's bill, community work projects. The governor's bill seems to have more of a community focus. Number 412 CHAIRMAN GREEN stated that the workfare provision should be broad in order to allow flexibility for opportunities. This would provide a meaningful activity preparing the individual for work. JIM NORDLUND informed the committee that in relation to Section 31 of SB 98, the governor's bill targets the unemployed parent population. Section 31 of SB 98 applies to everyone and there are no training requirements. He suggested providing a link between job training for long-term permanent employment in the private sector. He acknowledged that there would always be persons working in community work projects where there are no jobs. There being no further business before the committee work session, the meeting adjourned at 3:17 p.m.