SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE March 29, 2000 1:42 p.m. MEMBERS PRESENT Senator Mike Miller, Chairman Senator Drue Pearce Senator Kim Elton MEMBERS ABSENT Senator Pete Kelly, Vice-Chairman Senator Gary Wilken COMMITTEE CALENDAR CS FOR SENATE BILL NO. 80(CRA) "An Act relating to contracts for the provision of state public assistance to certain recipients in the state; providing for regional public assistance plans and programs in the state; relating to grants for Alaska Native family assistance programs; and providing for an effective date." -HEARD AND HELD CS FOR HOUSE BILL NO. 191(FIN) "An Act relating to charter schools." -SCHEDULED BUT NOT HEARD PRESENTATION BY DARRYL HARGRAVES, ALASKA COUNCIL OF SCHOOL ADMINISTRATORS PREVIOUS SENATE COMMITTEE ACTION SB 80 - See Community and Regional Affairs minutes dated 3/8/99 and 3/17/99 and HESS minutes dated 5/3/99. WITNESS REGISTER Jim Nordlund, Director Division of Public Assistance Department of Health & Social Services PO Box 110640 Juneau, AK 99811-0640 POSITION STATEMENT: Presented SB 80 Mr. Don Shircel Tanana Chiefs Conference 122 1st Ave., Suite 600 Fairbanks, AK 99701 POSITION STATEMENT: Supports SB 80 Mr. Elmer Lindstrom Special Assistant Department of Health & Social Services PO Box 110601 Juneau, AK 99811-0601 POSITION STATEMENT: Commented on SB 80 Barbara Miklos, Director Child Support Enforcement Division Department of Revenue 550 W 7th Ave., Suite 310 Anchorage, AK 99501 POSITION STATEMENT: Supports SB 80 Darryl Hargraves, Executive Director Alaska Council of School Administrators 326 4th, Suite 404 Juneau, Alaska 99801 POSITION STATEMENT: Presented legislative agenda of AASA ACTION NARRATIVE    TAPE 00-14, SIDE A Number 001 CHAIRMAN MILLER called the Senate Health, Education and Social Services (HESS) Committee to order at 1:42 p.m. and stated that a quorum was not present so he would begin the meeting by taking public testimony on SB 80. He noted his intention to hear HB 191 next Wednesday. SB 80-PUB.ASSISTANCE:PROGRAMS/GRANTS/CONTRACTS  MR. JIM NORDLUND, Director of the Division of Public Assistance in the Department of Health and Social Services (DHSS), made the following comments about SB 80 on behalf of the Administration. One of the main reasons for the success of the Welfare Reform Act of 1996 is that Congress gave states a great deal more flexibility with which to operate their welfare programs. In exchange for that flexibility, the federal government agreed to give states a fixed-amount block grant to operate their programs. Since 1996, states have been able to design programs that are more suited to their local economies and circumstances. The 1996 federal act also allows the 12 Alaska Native regional non-profit corporations and the Metlakatla reservation to operate their own welfare programs. Alaska's version of welfare reform, the Alaska Temporary Assistance Program (ATAP), was created by Alaska statute. That law allows DHSS to coordinate the operation of its welfare program with those same 13 entities. To receive the federal block grant, Alaska must contribute state funds, known as a maintenance of effort (MOE), to the program. The state currently contributes approximately 40 percent of the cost of the overall program. Current state law does not allow the state match to go to the Native-operated programs; SB 80 will allow the State to contribute State funds to the operation of the Native programs. These state monies are currently being spent on Native clients, so instead that money would be transferred to the regional non-profit organizations. SB 80 has a zero fiscal note because it simply changes the entity that is operating the program and does not increase funding for the programs. One other provision in the federal act, included at Senator Murkowski's request, underscores the need for SB 80 and is unique to Alaska. It requires that a Native-operated program be comparable to the state's program; however, if a Native program is operating with approximately 50 percent fewer dollars than the State's program, its program could not be comparable. For all practical purposes, without state funding, the Native organizations would be denied the opportunity to run their own welfare programs in Alaska. The Tanana Chiefs Conference (TCC) is currently operating a welfare program in the Fairbanks area. The only way the state can provide state funds for the TCC program is if TCC designed a program identical to the state's. TCC wanted to reduce client benefits by five percent and use that money to operate a drug and alcohol treatment program. TCC cannot do so under current state law; SB 80 would change that. SB 80 is a local control bill. It allows a local entity to design and operate its own program. CHAIRMAN MILLER announced that a quorum was present as Senators Pearce and Wilken had arrived. Number 598 SENATOR PEARCE asked if the state will have approval authority over the program changes that differ from the state's program. MR. NORDLUND said the bill lays out some of the parameters by which DHSS will provide state funding. One part of the bill is a reiteration of the particular criteria DHSS and the federal government will use to give non-profits state money. In addition, the money would be granted from DHSS to the Native non- profit organizations so the grants will be audited using DHSS's auditing procedures. SENATOR PEARCE noted that her concern is how much a Native non- profit program could differ from a state program. MR. NORDLUND stated it is hard for DHSS to anticipate exactly what Native organizations might propose in a plan so there is no bright line in terms of what they can and can't do. That question revolves around the definition of comparability. DHSS has laid out some of the things the Native organizations must do to be comparable. His view is that a five percent benefit cut is not substantial enough to make TCC's program incomparable. It will ultimately be up to the U.S. Secretary of Health and Human Services to define whether a program is comparable. Number 805 CHAIRMAN MILLER asked Mr. Nordlund to list the names of the Native non-profit organizations along with Metlakatla to clarify where the money will be going. He also noted that although he understands the benefit of creating regional programs, he has a philosophical problem with creating a program for Native people and a program for others since over the years the legislature has tried to break racial barriers down. He asked Mr. Nordlund for his view of that issue. MR. NORDLUND said that matter has been dealt with in the legislation itself because the bill allows DHSS to set up regionally operated public assistance programs. DHSS could set up a program that is for all of the Doyon region, for example, including Natives and non-Natives if it chose to do so. That provision is in the bill because the day may come when DHSS will want TCC to operate the program for all recipients in the region. DHSS will most likely contract with TCC fairly soon to operate programs for all recipients in small villages because there may be only one non-Native recipient in that village. SENATOR ELTON asked if a Native resident of a region will have a choice between the Native regional program and the state program. MR. NORDLUND said the simple answer is "no." Once DHSS contracts out the operation of the program to a local entity, then that is where the person will go to get services. CHAIRMAN MILLER asked which program a member of the Doyon region who lives in Fairbanks would fall under. MR. NORDLUND replied a Native person living in Fairbanks would fall under TCC's program. Number 1107 SENATOR ELTON asked about the changes in the proposed committee substitute. MR. NORDLUND said the main change in the committee substitute is that it deals with child support. SB 80 was introduced last year and ran into a roadblock in terms of how child support would be distributed to the state or the Native organization. DHSS worked with the Attorney General's office and the Child Support Enforcement Division (CSED) over the interim on that issue and determined that the child support collections should be assigned to the Native organization. In the past, the state collected the child support payments and gave half to the federal government as a reimbursement. The federal government does not care what happens with those distributions anymore and will allow the Native organizations to keep all child support collections. Because the state will be helping the Native organizations to fund the program, the state will be reimbursed from the child support collections by a reduction in the amount granted to the Native organization. CHAIRMAN MILLER said because the proposed committee substitute was submitted to staff at the last minute he cannot receive it too well. MR. ELMER LINDSTROM, Special Assistant to the Commissioner of DHSS, said he brought the document to committee staff this morning, and the document reflects exactly the version of the bill that passed out of the House HESS Committee earlier this session. The bill was heard in the House Finance Committee late last week and it was unclear whether it would be amended by that committee. He waited until the bill moved from House Finance to bring it to committee staff. He apologized for the short notice. CHAIRMAN MILLER noted that committee members would have the weekend to look at it. MR. DON SHIRCELL, the Director of TCC's Family Service Division for the past 16 years, said Alaska's unique size makes regionally designed and administered temporary assistance programs logical. SB 80 is consistent with the same rationale from which state and federal welfare reform emerged. Programs closer to the people are more responsive, relevant, effective and efficient than large, centrally-operated one-size-fits-all programs planned and administered outside of the community. This January, TCC completed its first year administering a regional Native family assistance pilot program. While it is still too early to fully assess the project, some of the preliminary statistics indicate that TCC is headed in the right direction. In January of 1999, when the state fully transitioned its program to TCC, there were 440 cases. This January, the monthly caseload consisted of 356 families. Like the state's temporary assistance program, TCC's caseload is the lowest it has been in three years. Preliminary statistics also indicate that more Native families receiving temporary assistance are working for the checks they receive. Village leaders feel good about that. Alaska's rural communities and their regional non-profit corporations have been designing programs that fit the needs of their families, and many have also been developing local and regional infrastructures that now rival the state's capacity to provide a comparable level of local service delivery, especially in remote areas. TCC feels it could get more bang for the buck if it is allowed to incorporate other regional variations within its temporary assistance program. SB 80 would allow Native family assistance programs the degree of flexibility needed to do more with its program dollars. For example, the state's temporary assistance program plan includes one-stop centers which offer a wide range of employment training and counseling services to help people get off of welfare. The state has financed such centers in a handful of urban communities. Over the course of the first six months of the TCC pilot program, it financed a community-based service delivery infrastructure that includes community based offices and staff located in one-stop centers in each of the 38 rural communities of TCC's service area. These were created at no additional cost to the consolidation of state and federal program funds. The shared staff and facilities were funded through the combined resources of other existing TCC programs to minimize administrative costs and maximize the level of collaboration with other support services needed by families seeking to enter the labor market. These small community based service centers service locally acceptable, culturally appropriate single points of entry for families needing assistance, as well as single points of contact for employers. The small size of the one-stop centers allows for personal attention and monitoring to ensure progress. People work with people and not paper. Under SB 80, the TCC program could impose the following standards not permissible under current Alaska statute. All applicants for assistance could be required to undergo alcohol and substance abuse evaluations. More importantly, they'd be required to follow the recommendations of their evaluation or lose a percentage of their benefits. For those who comply with the treatment plan recommended within six months, their benefits would be restored and any percentage withheld would be returned upon successful completion of their treatment plan. TCC would be able to assertively approach the problem of alcohol and substance abuse and create bonus incentives for compliance on the same dollar. TCC could require all parents who receive benefits to attend their children's parent teacher conferences and include their children in regular health screenings and immunization clinics. TCC cannot impose many sanctions under current law. SB 80 is about less government, local control, and more "bang for the buck." Number 1661 SENATOR ELTON said SB 80 presents a more holistic approach. He asked what process TCC goes through to determine which programs it will mandate and what the sanctions will be. MR. SHIRCELL replied the TCC engaged in a planning exercise for about four years which preceded the introduction and submission of its federal welfare reform plans to the federal government. During three TCC conventions each condition and sanction was hashed out. TCC initially did a survey in 1996 to flesh out the kinds of things that tribes were willing to do. The sanctions were agreed upon by consensus. SENATOR ELTON asked who would be in charge of making sure that public assistance dollars are not being used to supplement other programs that TCC may be offering - whether it be anger management or alcohol and drug abuse. He asked whether TCC, the federal government, or the state government would do that. MR. SHIRCELL said TCC has contractual arrangements with the various federal agencies and with the state divisions. Number 1869 MS. BARBARA MIKLOS, Director of the Child Support Enforcement Division, said Mr. Nordlund described CSED's role in this process very well and that she was available to answer questions. SENATOR ELTON asked MS. MIKLOS if she was satisfied with the regime DHSS set up to accomplish the child support requirements. MS. MIKLOS said she was and that it took DHSS and CSED two years to figure out how to resolve the child support issue. CHAIRMAN MILLER asked if the House version was heard by the House Finance Committee. MR. NORDLUND said it was. CHAIRMAN MILLER announced that he would bring up SB 80 again next week after committee members had time to digest the changes in the bill. He asked Mr. Darryl Hargraves to address the committee. Number 2036 MR. DARRYL HARGRAVES, Executive Director of the Alaska Council on School Administrators (ACSA), referred to a handout given to committee members entitled "Alaska Legislation Update" and made the following comments. [Mr. Hargraves was representing the school superintendents from around the state (members of the Alaska Association of School Administrators - AASA) who recently met in Juneau to discuss legislation.] Discussions regarding the House operating budget focused on the need to get funding at the level allowed under the foundation formula. Co-payments for student transportation will require school districts to pay a portion of that cost. The AASA is concerned about the status of a study for the adequacy of the foundation formula. The AASA has asked that it be allowed to be involved in such a study and it encourages the legislature to do the study as envisioned by the authors of SB 36. The AASA would like to see the operating budget go forward. The Governor's capital budget supports construction. The AASA is concerned that some projects will not be funded for five years. Some of those projects need to be done right now. The AASA did not decide whether the Governor's bill, with its technical aspects, was the best way, or whether construction with general obligation bonds would be better. That is a decision to be made by the legislature but the projects need to be done. The AASA finds SB 198 to be interesting, acceptable and desirable. AASA commends the sponsor for the legislation which is vitally necessary. He asked for the committee's support of SB 198. The AASA supports the Quality Schools grant funding in the amount of $7.5 million. SB 198 will alleviate some of the serious concerns faced by districts right now and the Quality Schools funding can be used strictly to boost student results on the exit exams. Regarding compliance with IDEA, SB 205 was supported by the AASA. The bill will provide $14.3 million in federal funding. AASA is concerned the state will lose that money if something is not done to take care of those statutes on the books right now. The bill simply says the statutes will reference federal law. AASA is concerned that the bill will become "Christmas tree" legislation and many issues will be addressed by it. AASA would like to see the bill pass as is, and not become a vehicle for issues related to gifted and talented programs. SENATOR ELTON asked Mr. Hargraves if he has problems with the way the legislature restructured the way special education programs are funded and whether that percentage cap runs into problems with IDEA. MR. HARGRAVES said it is his understanding that gifted and talented programs do not fall under the purview of IDEA. AASA has wondered why gifted and talented programs were put under that category. He said he was on the first task force in the 1970s to start gifted and talented programs in the state. Alaska was quite unique in that it put gifted and talented programs into the same category as programs for children who are handicapped. SENATOR ELTON thought that the fact that both programs were lumped together with a cap may create problems with the federal law. He asked Ms. Lappe of the Department of Education and Early Development to respond to his concern at a later date. CHAIRMAN MILLER said another discussion that has to take place regarding SB 205 is that DOEED has already gone farther because it has mandated that gifted and talented programs must be offered in every school district in one of the sections of SB 205. He noted Mr. Hargraves was saying the state needs to do what is necessary to comply with IDEA. MR. HARGRAVES agreed and said the Alaska delegation in Washington, D.C. has said the state will lose the $14.3 million if it does not do something about compliance. MR. HARGRAVES noted that the superintendents strongly support opening the coastal plain of the Arctic National Wildlife Refuge (ANWR) to development to provide more revenue to the State. Regarding the clean-up bills on PERS and TRS, the AASA took no position. The AASA appreciates the fact that student transportation costs are included in the supplemental appropriation bill, but it would like to see no co-pay for several reasons. The AASA took no position on the Mackie plan or the long-term fiscal plan. The AASA does not support the school discipline and safety bill [HB 253] as it will create many difficulties for school districts. Regarding SB 292, the AASA has taken no position. AASA does support the school debt reimbursement bill - HB 433. AASA would like to see the legislature keep that as a central part of school construction. The AASA sees SB 105 as a limited opening up of SB 36. SB 105 is strongly supported by the AASA even though only three schools will benefit from it. In response to the tax cap initiative, the AASA has "double- starred" that proposal as an area of concern because it does not know what the future of the state will be. Schools are having terrific problems now and are having to cut offerings left and right. Vocational education is all but gone in most of the school districts in the state. The AASA does not see how schools will survive the passage of SB 227. Regarding HB 192, the AASA has taken no position. The AASA has expressed an interest in having the pledge of allegiance in the classrooms and would expect school boards to set up policies. AASA took a "no" position on the free exercise of religion and believes it will open up severe problems for school districts. AASA believes that schools will have to show a compelling state interest for almost anything done in a school district. AASA opposes the creation of an Alaska Board of Technical and Vocational Education [SB 289] because it sets up a different bureaucracy. It will create something that could cost money that would be taken from school districts. The AASA took no position on HB 327 - the retirement incentive program - but it questions whether it is appropriate to put it in a permanent program of this type and whether it is needed at this time. The AASA opposes HB 129, which excludes principals from collective bargaining under PERA. AASA also opposes the Native language program bill. Superintendents from rural areas with an almost 100 percent Native population said the local people in those communities oppose SB 103 because they want that issue left to local control. Last, HB 365 pertains to the REAA consolidation. AASA heartily opposes that bill - state operated schools were not successful in the past. The AASA sees benefits to HB 277 which would allow the rehire of retired teachers but it is concerned that teachers may quit their jobs to get retirement benefits and then get rehired. Some members suggested that the bill should require teachers to be out of work for a specified period of time. There being no questions or further testimony, CHAIRMAN MILLER adjourned the meeting at 2:36 p.m.