HOUSE BILL REPORT

ESSB 6232

BYSenate Committee on Children and Family Services (originally sponsored by Senators Anderson, Smitherman, Barr, Stratton, Lee, Wojahn, Bailey, Kiskaddon, Patterson, McCaslin, Smith, Fleming, Johnson and Conner)

Seeking federal waivers for self-employed persons receiving aid to families with dependent children.

House Committe on Human Services

Majority Report:  Do pass with amendments.  (9)

      Signed by Representatives Brekke, Chair; Scott, Vice Chair; Anderson, Leonard, Moyer, Padden, H. Sommers, Sutherland and Winsley.

House Staff:Jean Wessman (786-7132)

AS REPORTED BY COMMITTEE ON HUMAN SERVICES FEBRUARY 26, 1988)

BACKGROUND:

Recipients of Aid for Families with Dependent Children (AFDC) are allowed to be employed and remain on assistance if they report their income monthly.  Their income is then deducted from their monthly grant.  Persons who are self-employed may deduct specific business expenses from their income, but federal law prohibits them from deducting those expenses for capital expenditures or payments on business loans.  These expenditures may not be deducted from personal income, they are deducted from the AFDC grant.

SUMMARY:

BILL AS AMENDED:  The Secretary of the Department of Social and Health Services is instructed to seek waivers from federal law by October 1, 1988 to allow AFDC recipients who are self-employed to separate business assets from personal assets for a period not to exceed two years.  If the waivers are obtained, the Department of Social and Health Services (DSHS) is required to adopt rules to evaluate businesses of recipients.  Recipients may be required to prove why they continue to need assistance if it appears to the Department that the business income is sufficient to allow the owner to go off of AFDC.

AMENDED BILL COMPARED TO ENGROSSED SUBSTITUTE:  The requirement to request waivers on methods of determining income for calculating the grant amount is deleted.

Fiscal Note:      Available.

House Committee ‑ Testified For:    Miryam Gordon, Citizen.

House Committee - Testified Against:      Laurie Evans, Department of Social and Health Services.

House Committee - Testimony For:    This bill encourages self-employed AFDC recipients, and perhaps those who are not self-employed, to become more entrepreneurial and hopefully increase their chances of becoming independent from the AFDC program.  The only way to succeed at self-employment is to allow these expenses to be deducted from gross earnings.

House Committee - Testimony Against:      This could cost the Department an unknown amount of money both in grant dollars and administrative costs.  It would be better to let the Family Independence Program be implemented without any additional requests for federal waivers.