SENATE BILL REPORT
SB 6624
BYSenators McDonald and Stratton; by request of Office of Financial Management
Changing provisions relating to the family independence program.
Senate Committee on Ways & Means
Senate Hearing Date(s):February 23, 1990; February 26, 1990
Majority Report: That Substitute Senate Bill No. 6624 be substituted therefor, and the substitute bill do pass.
Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bluechel, Cantu, Hayner, Johnson, Lee, Newhouse, Owen, Saling, Smith.
Minority Report: That it not be substituted.
Signed by Bauer, Fleming, Gaspard, Moore, Niemi, Warnke, Williams, Wojahn.
Senate Staff:Karen Hayes (786-7711)
February 28, 1990
AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 26, 1990
BACKGROUND:
Current law states that all persons with dependent children who apply for public assistance whose income, assets and resources do not exceed eligibility limits are entitled to enroll in and receive any enhanced income and medical benefits wherever the Family Independence Program (FIP) is implemented. Subject to the availability of funds, the department may authorize benefits for additional categories of public assistance clients. No statutory provision exists which permits the department to restrict the availability of enhanced program benefits by slowing or halting new enrollment in the event that projected operating costs exceed budget appropriations. Concern has been expressed by the administration that it lacks the necessary tools to control caseload and expenditure growth attributed to the availability of the Family Independence Program in 15 community social service areas statewide.
The FIP Executive Committee is the administrative body charged by the Legislature with program oversight. After consulting with advisory boards, the FIP Executive Committee may authorize select program changes as deemed necessary to manage within existing resources. Current discretionary powers include:
(1) The authority to revise the level and type of enhanced program benefits, including cash incentives available for training, education or employment participants provided that no recipient receives less financial assistance than would otherwise be available under the federal Aid to Families with Dependent Children (AFDC) Program and Food Stamp Program;
(2) The authority to allow (or disallow) cash incentives paid to participants attending higher education or vocational institutions;
(3) The authority to establish rules for the treatment of earned and unearned income provided such regulations do not violate federal and state resource exclusions as outlined in federal code or state statute;
(4) The authority to condition enhanced program benefits upon mandatory participation by select clients as prescribed in statute and to impose administrative sanctions thereto;
(5) The authority to establish conditions under which child care and other related social services will be provided;
(6) The authority to establish copayment requirements for non-cash benefits;
(7) The authority to establish the frequency and method for redetermining eligibility.
SUMMARY:
Legislative intent is clarified. The Family Independence Program (FIP) is a demonstration project subject to periodic review and modification by the FIP Executive Committee as necessary to further state policy and to manage the program within available funds.
Treatment sites are defined. Treatment sites are those five community social service delivery areas selected by the federal government for data collection to draw program and fiscal comparisons between the federal Aid to Families with Dependent Children (AFDC) and welfare reform provisions of the Family Independence Program.
The participation of caretaker relatives in the Family Independence Program is restricted. Caretaker relatives are those guardians whose personal resources and earnings disqualify them for AFDC benefits. Such relatives may, under federal law, receive income assistance grants but only in recognition of qualifying dependent children in their household. For the purpose of federal cost neutrality, caretaker relatives who reside in a community where FIP is offered are classified as AFDC rather than FIP.
The FIP Executive Committee's powers are expanded. New discretionary powers would include:
(1) The authority to periodically review administrative data and evaluation reports;
(2) The authority to modify program operations so long as changes do not conflict with prior agreements reached between state and federal governments. These waivers condition the state's operation of a welfare demonstration project. Consultation with the FIP independent evaluator (the Urban Institute) must precede any program modifications;
(3) The authority to periodically stop enrollments in family independence program sites, except for the five treatment sites, until such time as sufficient funds become available to reopen enrollments;
(4) The authority to prescribe rules by which conversion to FIP from AFDC is allowed.
FIP enrollees who are employed on a fulltime basis and whose earnings are less than 135 percent of the benchmark standard (equivalent to the AFDC payment standard, adjusted for family size plus the cash equivalent of food stamps) are reassessed to determine if current employment is likely to move the family into noncash benefit status within one year. These suspended cases lose enhanced FIP benefits after one year unless a new self-sufficiency plan is developed and progress towards revised goals commence. In the event that nothing changes, termination of FIP benefits after one year may not result in less financial assistance than the family is entitled to under AFDC.
If amendments to state statute proposed in this bill are not approved by the federal government, the entire act is null and void.
EFFECT OF PROPOSED SUBSTITUTE:
Reference to the FIP independent evaluator is stricken. The Executive Committee shall consult with the Legislative Budget Committee before implementing program modifications.
The Governor is directed to terminate the Family Independence Program should state liability to the federal government for FIP program costs exceed 1989-91 appropriation authority by more than $15 million and the issue of state/federal cost sharing is not resolved by May 1, 1990.
The Governor is directed to terminate the Family Independence Program if FIP caseloads exceed quarterly tolerance levels above the February 1990 supplemental forecast and that growth is not attributable solely to an increase in the state's population, an increase in public assistance grant standards or a decrease in nonagricultural employment statewide. The Office of Financial Management is directed to provide legislative fiscal committees all mathematical calculations used to adjust the February 1990 caseload forecast for population, grant standard and employment changes and any subsequent reports of FIP caseloads this biennium are to be consistent with such calculations.
Should termination occur, the FIP Executive Committee is directed to provide the least disruptive, most expeditious transition of clients to the appropriate federally funded public assistance program. Within available funds, FIP child care benefits are continued until the transition is complete.
The federal severability clause is modified. Except for language which establishes fiscal contingencies for the operation of the Family Independence Program, other state amendments accomplished by this act which later prove to be a violation of federal and state agreements shall not be implemented.
Appropriation: none
Revenue: none
Fiscal Note: available
Effective Date:The bill contains an emergency clause and takes effect immediately.
Senate Committee - Testified: Dick Thompson, FIP Executive Committee, DSHS; Len McComb, FIP Executive Committee, OFM; Isiah Turner, FIP Executive Committee, ESD; Jacquie McPhail, Family Opportunity Council (con); Carly McDaniel, FIP participant (con); Jean M. Sherman, FIP participant (con); Cynthia R. Muck, FIP participant (con); Sharlene Olson, FIP participant (con); Janet Richardson, HEAD START (con); Linda Robison, FIP participant (con); Pamela VanHoute, Family Opportunity Council (con); Karen Shulman, Family Opportunity Council (con); Anita Torrie, FIP participant (con); Jenny Scott, FIP participant (con)