SENATE BILL REPORT

HB 1836

BYRepresentatives Hargrove, Wineberry, Schoon, Vekich, Braddock, Brekke, Sanders, Winsley, Lewis and Todd

Encouraging economic self-sufficiency through self-employment of families receiving aid to families with dependent children.

House Committe on Trade & Economic Development

Senate Committee on Children & Family Services

Senate Hearing Date(s):February 23, 1988; February 24, 1988

Majority Report:  Do pass as amended.

      Signed by Senators Kiskaddon, Chairman; Bailey, Vice Chairman; Craswell, Fleming, Garrett, McDonald, Stratton.

Senate Staff:Jean Soliz (786-7755)

                  February 26, 1988

AS REPORTED BY COMMITTEE ON CHILDREN & FAMILY SERVICES, FEBRUARY 24, 1988

BACKGROUND:

Recipients of Aid for Dependent Children 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 certain business expenses from their income, but federal law prohibits them from deducting certain business expenses including those for capital expenditures or payments on business loans.  These expenditures may not be deducted from personal income so they are deducted from the AFDC grants.

SUMMARY:

The secretary of the Department of Social and Health Services is instructed to seek waivers from federal law 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, 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.

Any program operated as a result of the waivers must be operated in conjunction with any demonstration project on self- entrepreneurship operated by the Employment Security Department.

SUMMARY OF PROPOSED SENATE AMENDMENT:

Language is added to specify that the Department of Social and Health Services shall seek waivers and promulgate rules which allow deductions from income for business expenses including but not limited to capital expenditures, payments on the principal of loans to the business and reasonable amounts for cash reserves.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Effective Date:July 1, 1988

Senate Committee - Testified: Laurie Evans, DSHS