text:
January 1997
I. Committee Recommendations
11. Options Available to the State .
111. Minority Reports ~
IV. Meeting Notices
V. Meeting Minutes
I. Committee Recommendations
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, better known as
weKare reform, combines federal fbnding for the Aid to Families with Dependent Children ( AFDC),
Job Opportunities and Basic Skills ( JOBS) and Emergency Assistance programs into block grants for
each of the states. The Act gives states tremendous flexibility in designing their own welfare
programs while imposing a few requirements.
Pursuant to the request made by the President of the Arizona Senate and the Speaker of the Arizona
House of Representatives to review the federal welfare reform block grants and study possible
methods for administering block grant programs, the Joint Interim Study Committee on Block Grants
submits the following recommendations:
1. The eligibility criteria for cash assistance should not be changed; however, the welfare
program should shift from one which offers benefits based on eligibility to one that offers
benefits based on work.
2. An individual responsibility plan should be prepared for each adult applying for cash
assistance. The expectations of both the applicant and the state should be clearly outlined in
the plan. A penalty for non- compliance with the individual responsibility plan should be
imposed. The penalty should be a 25% cash benefit sanction for the first instance of non-compliance,
a 50% sanction for the second, and a 100% sanction for the third instance of
non- compliance.
3. Families moving to Arizona should be treated under the same eligibility criteria and benefit
levels as Arizona families.
4. A state criminal background check should be performed on each adult applying for cash
assistance in order to deny cash assistance to persons convicted of felonies involving the
possession, use or distribution of controlled substances.
5. The state should eliminate all federal waivers in effect under the EMPOWER Program except
the transitional medical assistance waiver. This waiver should continue until it expires.
6. Arizona should set ambitious goals for reducing out- of- wedlock births and encourage the use
of the request for proposal ( RFP) process to reach the goals.
7. Community service should be an option in the mix of possible work requirements for people
who apply for cash assistance.
8. The state should set up a work program to get people into a job as the way to move fiom
welfare to work.
9. The state should set aside a percentage of the Temporary Assistance for Needy Families
( TANF) Block Grant monies in a rainy day find for use in times of economic downturn.
10. No specific exemptions fiom the five- year lifetime cap on benefits should be outlined at this
time. An evaluation shall be conducted prior to the fifth year of passage of the federal
legislation to determine who, if anyone, should be exempt fiom the lifetime cap.
11. A statutory exemption from work for domestic violence victims should not be instituted.
Work requirements for victims of domestic violence should be determined on a case by case
basis. Eligibility offices should screen for domestic violence and refer individuals to
appropriate services.
12. A portion of the state maintenance of effort dollars should be designated for the Emergency
Assistance Program so that program administrators and recipients do not have to comply with
the TANF requirements.
13. A portion of the TANF monies should b6 transferred to the Child Care and Development
Block Grant for child care services.
14. A new sanction structure should be implemented imposing a 25% cash benefit sanction for
the first instance of program non- compliance, a 50% sanction for the second and a 100%
sanction for the third instance of program non- compliance.
Thomas C. Patterson
Carolyn g ~ l l e nC, o- chair
Sandra D. Kennedy Marion L. Pickens
11. Options Available to the State
Prepared by Senate Legislative Staff
I Federal Provision I Considerations I Issues Presented
P. L. 1 04- 1 93 eliminates the open-ended
federal entitlement program Aid
to Families with Dependent Children
( AFDC). States are able to establish
eligibility standards and requirements
for cash assistance or other services the
state chooses to offer.
Current law requires that eligibility be
established according to several
indicators including a 1 8 5% Income
Maximum Standard, a Need Eligibility
Determination, and a Payment
Also, any changes must coordinate
eligibility for Food Stamps and
Medicaid. Under TANF, a state must
provide Medicaid to a family that
would have been eligible for cash
assistance on July 16, 1996.
Does the state want to change the
eligibility criteria?
Federal Provision
Eligibility continued...
States must make an initial assessment
of the skills, prior work experience and
employability of recipients. States may
develop, in consultation with the
recipient, an individual responsibility
plan which sets forth employment goals
and obligations of the recipient. States
may reduce the TANF benefit by an
amount determined appropriate by the
state to a family with an individual who
fails without good cause to comply with
the individual responsibility plan.
Considerations Issues Presented
Does the states want to require that an
individual responsibility plan be
developed for recipients?
Does the state want to impose a penalty
for non: compliance with the individual
responsibility plan? If so, what should
that penalty be?
Federal Provision
Eligibility continued ...
States are allowed to treat families who
have moved from another state under
the cash assistance rules operating in
that state ( including benefit levels) for
12 months.
Federal Provision
States must deny cash assistance to
persons convicted of felonies involving
the possession, use or distribution of
controlled substances.
Administrative time and expense.
Arizona benefit levels compared to
other states.
Issues Presented
Does the state want to treat families .
who have moved to Arizona from
another state under the cash assistance
rules operating in the state from which
they moved?
States may opt out of this provision.
Administrative issues with regard to
checking the state criminal history data
bank. National criminal background
checks may take weeks. Costs involved
with background checks.
Issues Presented
Does the state want to opt out of this
Does the state want to require self-reporting?
Does the state want require a state
criminal data base search? Does the
state want to require a national criminal
data base search?
Federal Provision
P. L. 1 04- 1 93 combines federal
funding for the AFDC, Emergency'
Assistance and JOBS Programs into one
block grant. States can create their
own welfare programs with few
Arizona's EMPOWER Program contains
several welfare reform provisions passed
by the Legislature during the 1994- 95
legislative sessions.
Issues Presented
Does the state want to make any
changes to the EMPOWER Program
Issues Presented
Does the state want to make any
changes to the numerical goals?
How does the state want to achieve
these goals?
Federal Provision
States must establish numerical goals
for reducing out- of- wedlock
pregnancies for calendar years 1996-
2005. States must take action to
reduce the incidence of out- of- wedlock
pregnancies with special emphasis on
teenage pregnancies. States must
conduct a program to reach state and
local law enforcement officials,
counselors and the educational system
that provides information on the
problem of statutory rape "... so that
teenage pregnancy prevention
programs may be expanded in scope to
include menN. Additionally, $ 100
million dollars is allocated each year,
beginning in FFY 1 998, to be divided
among the five states who are most
successful in reducing the number of
out- of- wedlock births without increasing
the abortion rate.
Arizona's State Plan submitted to
DHHS on October 1, 1996 establishes
the state's numerical goals for reducing
out- of- wedlock births.
The Teenage Pregnancy Prevention
Task Force reviewed a number of
programs and proposals to address
these issues.
Beginning in FFY 1998, an estimated
additional $ 750,000 is included in the
Child and Maternal Health Block Grant,
administered by the Department of
Health Services, for an " abstinence
educationff program as defined in P. L.
104- 1 93.
Issues Presented
Does the state want to require
recipients who are ready to work to
participate in community service after
two months of receiving assistance if
they have not found employment?
Federal Provision
States may require a parent or
caretaker who has received assistance
for two months, who is not exempt
from work requirements, is deemed
ready to work, and is not engaged in
work to participate in a community
service program.
Considerations '
States may opt out of this provision.
Federal Provision
Work requirements continued...
P. L. 104- 193 requires a state to have a
percentage of its assistance caseload in
specified work activities. For FFY
1 997, 25% of all families that include
an adult or minor child head- of-household
must be participating in the
specified work activities. 75% of the
two parent family caseload must be
participating in the specified work
It is estimated that the state will receive
a 12 point credit towards these work
participation rates in FFY 1997 for
reducing the caseload from 1995
The work participation rates for adult
and minor child head- of- household
families increases each year with a 50°/ o
maximum caseload requirement to be
achieved in FFY 2002 and beyond.
Beginning in FFY 1999, 90% of the
two parent family caseload must be
participating in work activities,
Issues Presented
How does the state want to meet or
exceed the work participation rates?
Federal Provision
Work requirements continued.. .
Adults in families receiving assistance
under TANF are required to participate
in work activities ( as defined by the
state) after receiving assistance for 24
Considerations Issues Presented
How does the state want to meet these
work requirements?
Issues Presented
Does the state want to set aside a
portion of the annual TANF Block
Grant funds in a Rainy Day Fund for
times of economic downturn?
Federal Provision
States are given the option to carry
over TANF Block Grant funds for the
purpose of providing assistance in
future years.
issues Presented
Does the state want to exempt a
percentage of the caseload from the 5
year lifetime limit on benefits? If so,
what percent of the caseload should be
exempt from the 5 year lifetime limit?
Does the state want to specify who
would qualify for an exemption or does
the state want. to leave this discretion to
the program administrators?
Federal Provision
States may exempt up to 20% of its
caseload from the 5 year lifetime
benefit limit due to " hardship".
P. L. 104- 193 allows child only cases to
be exempt from the time limits.
The EMPOWER Program allows certain
people to be exempt from the 24-
month adult portion time limit
including those who are over 62,
disabled or incapacitated.
The EMPOWER Program allows an
unlimited number of recipients to be
granted extensions to the 24- month
adult portion cap for either an
education and training extension
( limited to two four- month extensions
per recipient) or a good faith effort
extension ( no limit on the number of
extensions per recipient).
Issue Presented
Does the state want to establish special
screening procedures?
Does the state want to provide a
referral service?
Does the state want to waive any
program requirements for victims of
domestic violence?
Federal Provision
Exemptions continued ...
States may establish procedures to
screen and identify victims of domestic
violence, refer these individuals to
counseling and appropriate services and
waive program requirements such as
work requirements, child support
cooperation requirements and family
cap provisions.
How should the eligibility interviewer
verify that domestic violence is
Issues Presented
Does the state want the new TANF
requirements to apply to EA services?
Does the state want to place any new
requirements on EA services or
Does the state want to designate a
portion of the MOE monies for the EA
Federal Provision
Recipients receiving services under the
TANF Block Grant must cooperate
with child support enforcement
services, must be calculated in the
denominator when calculating work
participation rates ( with some
exceptions) and must be tracked for life
to ensure that services are not provided
for more than five years.
Services offered under the Emergency
Assistance Program ( which is now part
of the TANF Block Grant) are
provided by local community agencies.
These agencies have several
administrative concerns with regard to
their ability to track EA recipients for
life. Additionally, the thousands of
people who receive EA services each
year will be counted when calculating
the work participation rates thereby
negatively impacting the rate unless
other effort. are made to ensure that
they are in " work activities".
MOE monies do not have to meet the
TANF requirements so the state could
designate a portion of the MOE monies
for the EA Program eliminating the
TANF requirements from EA services.
Federal Provision
States may transfer up to 30% of the
funds from the TANF Block Grant into
the Child Care and Development Block
Grant or for every two dollars that is
transferred into the Child Care and
Development Block Grant, one dollar
may be transferred into the Social
Service Block Grant, up to the 30%
total maximum transfer amount.
Estimates on the number of child care
dollars needed will be contingent upon
the work program adopted by the
Legislature and may not be known at
this time.
Issues Presented
Does the state want to transfer any
TANF Block Grant monies to the Child
Care and Development Block Grant or
the Social Services Block Grant?
Federal Provision
States are given broad flexibility to
assess penalties for failure to perform
required actions. These options are:
Nun- complance with work requirements
States must reduce the amount of the
TANF assistance pro- rata if an
individual fails to comply with a work
requirement but the amount is set by
the state. States may terminate TANF
assistance for the whole family. States
may eliminate the Medicaid benefit for
the individual whose cash is terminated
for failure to work.
Minor teen parent failure to attend school
Unmarried, minor teen parents must
attend high school or equivalent
program. States must impose a penalty
but the amount is up to the state.
Current sanctions for non- compliance
with the JOBS Program include:
1 st time - the adult portion of the
benefit is sanctioned for one
2nd time - the adult portion of the
benefit will be sanctioned for a
minimum of three months
All subsequent sanctions - the adult
portion of the benefit will be
sanctioned for a minimuq of six
Arizona imposes a sanction for non-compliance
through the JOBS Program.
Issues Presented
Does the state want to make any
changes to the current structure of
penalties for non- compliance with work
Does the state want to increase the
penalty for teen parents who fail to
attend high school or it equivalent?
Federal Provision
Sanctions continued..,
Failure to live in adulasupervised setting
Teenage parents must live at home or
in an adult supervised setting. The
entire TANF benefit must be
Child Support Enforcement
A state must reduce a family's grant by
25% if the parent fails to cooperate in
establishing paternity or in establishing,
modifying or enforcing a support order.
States have the option to increase the
amount of the penalty.
Minor Dependent Children
States may sanction families where an
adult fails to ensure that the minor
dependent children of the adult attend
school as required.
The EMPOWER Program eliminates the
cash benefit for teen parent families not
living in an adult supervised setting.
Issues Presented
This is a requirement of the federal
legislation, not an option.
Does the state want to increase the
minimum penalty beyond what is
required in the federal legislation?
Does the state want to sanction families
where the adult fails to ensure the
minor child's attendance at school?
Federal Provision
States may determine the number of
days ( between 30 and 180) a minor
child may be absent from the home
before assistance is denied.
Tribal members may be concerned with
the number chosen as many children
are sent away to boarding school.
Issues Presented
How long should a child be absent from
the home before assistance is denied?
Federal Provision
States have the option to provide,
deny, deem or otherwise limit benefits
under TANF, the Social Services Block
Grant and non- emergency Medicaid to
legal non- citizens in the United States
prior to August 22, 1996. ( There are
Legal non- citizens arriving in the United
States after August 22, 1996 are
ineligible for all federal means tested
programs for five years. ( There are
exceptions) After the five year bar,
states may continue to bar services until
citizenship is obtained.
A state may use state funds to
services to these individual. Dollars
used for services would count towards
the TANF MOE requirements.
Issues Presented
Does the state want to provide, deny,
deem or otherwise limit services
provided under TANF, SSBG, or non-emergency
Medicaid to legal non-citizens
in the United States prior to
August 22, 1996?
Does the state want to use state funds
for cash assistance or other services for
immigrants barred from receiving
federal assistance?
After the five year bar, does the state
want to continue to bar services until
citizenship is obtained?
Issue Presented
Does the state want to require that
cltlzenship be an eligibility requirement for
state funded programs?
Does the state want to continue to provide
non- emergency Medicaid services to these
individuals through the creation of a
Federal Provision
Immigration continued ...
States have the option to deny state-only
funded public benefits to legal
non- citizens.
( There are exceptions)
Legal non- citizens who will be losing SS1
benefits under POL- 04- 1 93
lose their categorical eligibility for
Medicaid. ( There are exceptions) .
I( a state wanted to non- emergenq
Medicaid coverage to these individuals, a
new eligibility categoty would have to be
Issues Presented
Does the state want to continue the
$ 50 child support pass- through?
Federal Provision
The federal law requiring a pass-through
of the first $ 50 of any child
support payment to go to the family
receiving assistance is repealed.
States may continue the pass- through
but the federal government will no
longer share in the cost.
111. Minority Reports
The Joint Interim Committee on Block Grants report contains recommendation to the Legislature
on how to address block grant funding for welfare reform, many of which I support. However,
many recommendations have not been included in the report, which I believe are essential in
moving people from public assistance to self- sufficiency. Without those provisions, I cannot
endorse the committee recommendations.
I believe Arizona must include the following provision in developing a comprehensive welfare
reform program:
A careful assessment, by properly trained workers, of a recipient's skill. Sufficient time
must be allowed to assess prior work experience and employability to assure accuracy
of information.
Any program design for full employment should include opportunities for work
experience, continuing education, job training and transportation assistance.
Transitional support should continue until a recipient becomes financially self- sufficient.
The Personal Responsibility Plan should be considered a contract between the
recipient and the state agency ( DES), with both sharing the responsibility of complying
with the provisions of the plan.
The language in the Personal Responsibility contract must clearly state the expectation
for participants and define noncompliance and resulting sanctions.
The amount of the cash benefit agreed upon in the onset of the Personal Responsibility
Plan should not be reduced due the uncspccted increase in the state's caseloads.
Allows a minimum of 20 hours a week to fulfill the work requirement if the participant
is continuing their education and! or job training that will lead to a higher salary position.
That a recipient is granted a hearing after 3 proper investigation has been conducted
before a sanction for an alleged noncompliance is imposed.
A criminal background check should not be required of each person requesting assistance.
TANF ( block grant) monies should not he deposited into a " Rainy Day Fund" until the
state has determined that sufficicnt funding is available to implement any welfare reform
program. Fund monies should be dedicated solely to the achievement of the of TANF.
The state should consider allowing the following to be exempted from the 5- year
lifetime limit: recipients who are 62 years old or older; the disabled or incapacitated;
and those who have made a good faith effort and still unable to find work.
Victims of domestic violence must be given time to establish stability and security in
their lives through counseling and appropriate support services, before a work
requirement is imposed.
Child care reimbursement must be at the current market rate.
Child care must be available for parents up to 100% of the federal poverty level, and on
a sliding scale for parent whose income falls between 100% and 200% of the federal
poverty level.
Parents participating in the program must be given assurance of quality child care, which
includes providing child care for special needs and sick children. The child care should
be made available during and after traditional work hours. The program should also
include provisions that provide child care for single parents for work, job training or
educational classes.
The state should continue to provide services to legal non- citizens who resided in the
U. S. prior to August 22, 1996.
Arizona should continue the $ 50 child support pass- through for those currently receiving
the pass- through.
The Legislature should receive annual reports on the implementation of the welfare
reform program. Included in the report is the number of recipients who achieved
economic self sufficiency and no longer require public assistance and those who have left
the public assistance system ~ vithouto btaining self- sufficiency.
The rccommcndations I have included in this Minority Report are the results of many hours of
public testimony before the Joint Interim Committee on Block Grants and community forums
held throughout the state. Through this process. I have come to the conclusion that these
provisions are vital in developing an innovative ~ velfareto work program. With the flexibility
gi\ m to the states in the federal legislation. Arizona should take this opportunity to ensure that
e\. c? one is treated fairly and provided the support services to move to self sufficiency.
1 would like to thank my colleagues for thc many hours spent in working through this issue, but
~ vithouth e provisions I have highlighted. I regret I cannot endorse the interim committee report
at this time.
While many of the recommendations contained in the full committee rport are appropriate, the
committee missed the a number of opportunities to make the Arizona Temporary Assistance To
Needy Families ( TANF) much better, both in terms of fostering self- sufficiency and providing a
safety net for nnedy children and families.
I join in the recommended additional provisions set out in Representative Pickens report and will
not repeat those here. In addition I would urge ~ y legislation in this area to include:
a provision in the law providing that Arizona may not set more restrictive income
eligibility standards than those that existed under the Aid for Dependent Children
an increase in the benefit level by making it based upon a percentage of the most recent
Federal Poverty Level
a stipulation in the law that, prior to cutting off or reducing TANF grants due to a budget
shortfall, any " rainy day" contingency fund of excess TANF grant monies must be
. .
continuing the Jobstart Program as a pilot only, until further evaluaation is done as to the
effectivenes and success of the project
reasonble sanctions for noncompliance that apply only to the adult portion of the TANF
grant. not to the child portion.
The committee recommendations should also have included some general direction to the
Legislature and the Department of Economic Securtiy to include adequate funding and flexibility
geared. not to cutting families off from help and saving money, but instead to helping people find
and keep work, to breaking down the barriers to work and to making certain that children in this
state are not scarred by poverty to the extent possible. ,, A /
IV. Meeting Notices
AW][ ZONA STATE ILEGIlSLASPm
joint Interim Meetin? Notice
Open to tlre Public
DATE: Wednesday, September 4, 1996
TIME: 4: 00 p. m.
PLACE: House Hearing Room I
1. Introduction of Members
2. Opening Remarks and Stateme. nt of the Committee's Mandate
3. Briefing on Current Block Grants Administration in Arizona
-- Ted Ferris, Joint Legislative Budget Committee
-- Ken Behringer, Legislative Council
4. Preliminary Briefing of the New Federal Block Grants Law
-- Department of Economic Security
-- Joint Legislative Budget Committee
5. Committee Discussion
6. No Public Testimony
flepresen fa fives:
Carolvn Allen, Co- Chair
Mark Anderson
Robert McLendon
Gary Richardson, Co- Chair
Tom Patterson
Sandra Kennedy
** People with disabilities may request reasonable accornmodatlons such as interpreters, alternative formats, or assistance .? th
physical accessibility. If you require accommodatlons, please contact the Chief Clerk's Office at ( 602) 542- 3032.
lnterim Meetina Notice
Open to the Public
Joint lnterim Committee on Block Grants
Monday, October 7, 1996
Senate Hearing Room 1
1. Opening Remarks
2. Discussion: Major Legislative Decisions for Implementing PL 193
- Welfare Reform Block Grants
3. Funding Issues: Presentation by the Joint Legislative Budget
Committee staff
Overview of the current funding for Aid to Families with
Dependent Children ( AFDC), Emergency Assistance, Job
Opportunities and Basic Skills Training ( JOBS), and Child
Review of Welfare Reform Block Grant Funding
4. Child Support Enforcement: Presentation by Nancy Mendoza,
Director. Division of Child Support Enforcement, Department of
Economic Security
Overview of the provisions of PL 193 relating to child
support enforcement
Mandates and options available to the states
5. Public Testimony
Senator Richardson, Co- chair
Senator Patterson
Senator Kennedy
Representative Allen, Co- chair
Representative Anderson
Representative McLendon
- 7tle 11 of the Amencans Wth Drsabrlrtres Act prohrbrts the Anzona Senate ftum drscnmrnat~ nogn the bass of disability m the pmv~ son
ot a servrces and pubk meetmgs. lndnnduals wth d~ sabrlrtresm ay request reasonable acannmodams. such as ~ nterpreterso r akematrve
fomats by contactrng the Senate Secretary's Office at ( 602) 5424231 fvorce) as soon as possrble. Pleese be specrfic about the agenda
Item in whrch you are rnterested and for whrch you are requestrng an accommodatron The Senate may not be able to provrde certarn
accommodatrons pnor to the meetrng unless they are requested a reasonable tlme m advance of the meetmg. Thrs agenda wll be made
ava~ lablern an altematrve format on request
Oaen to the Public
DATE: Tuesday, October 22, 1996
TIME: 8: 30 a. m.
PLACE: House Hearing Room 4
1. Opening Remarks
2. Overhead Presentation by Legislative Staff:
" Major Provisions of P. L. 104- 1 93 that require State Policy Decisionsn
. .
3. Presentation by the Department of Economic Security:
a Overview of the Job Opportunities and Basic Skills ( JOBS) Program
a Profile of the AFDC and JOBS caseload
Update on the Arizona JOBSTART Pilot Program
4. Public Testimony
Senator Richardson, Co- chair
Senator Patterson
Senator Kennedy
Representative Allen, Co- chair
Representative Anderson
Representative McLendon
" Title 11 of the Amencans Wth D~ sabrlrtieAs d prohibns the Anzona Senate fnxn drsarmrnabng on the bass of drsabllrly m the provlsron
of rts servrces and publrc meetrngs lndrvrduals mth drsabilrtres may request reasonable accomrnodstions, such as ~ nterpreterso r
altemabve formats by cuntactrng the Senate Seaetary s Office at ( 602) 542- 4231 ( ma) as soon as possble Please be speafic about
the agenda rtem m whrch you are mterested and for which you are requesbng an accommodation The Senate may not be able to
provrde certarn accommodabons pnor to the meetrng unless they em requested a reasonable trrne m advance of the meeting Thrs
agenda wll be made avarlable m an altematrve fonnat on request
Thursday, October 31, 1996
8130 a. m.
Sena. t e . H earing Room 1
1. Follow- up Issues: Information provided on several questions raised during the last
committee meeting
2. Presentations by the Department of Economic Security: + Child Care and Development Block Grant ' . + Diversion Option + Emergency Assistance Program + Social Sewices Block Grant
3 Public Testimony
Senator Richardson, Co- chair
Senator Patterson
Senator Kennedy
Representative Allen, Co- chair
Representative Anderson
Representative McLendon
" T I I I ~ 1 1 o! me Amencans Wttn Dlsab~ lrltesA ct pmnrarrs the Arizona Senare from drscnmmatrng on the bass of d~ sabilitym the provisron
of 11s servlces and publtc meetfngs Indtv~ dualsw fln drsab~ ltt~ emsa y request reasonable accommodations, such as interpreters or
aIfemarrve fonnets by wntact~ ngth e Senate Secretary s Ofice e! ( 6021 542- 4231 ( voice) as soon 8s possible. Please be specific about
me agenda ttem m whtch you ere rnterested and for Mrcn you are reawstfng an accommodabon. The Senate may not be able to
provrde cenarn eccommOdatrons prior to the meelmg unless tney are reauested a reasonable time in advance of the rneet~ ng. This
agenaa w111 be made evatlable m an altematlve tome: on reques:
joint Interim Meeting Notice
Open to the Public
DATE: Friday, November 15, 1996
TIME: 8: 30 a. m.
PLACE: House Hearing Room 2
1. Emergency Assistance Program
Discussion of the impact of P. L. 104- 193
.3 Immigration Provisions of P. L. 104- 193
Impact on services hnded under the TANF block grant and options
available to the State
- Presentation by the Department of Economic Security
Impact on the Medicaid Program and options available to the State
- Presentation by AHCCCS
3. Welfare reform programs from other states
- Presentation by legislative staff
4. Public Testimon~,
hf embers:
Re~ resentntive: s
Carol\. ti A lletl. Co- Chair
Mark A~ ldcrsoti
Robert McLendon
Gaq~ Ri chardson, Co- Chair
Ton? Patterson
Sandra Kennedy
** I'eopIe a- itii ilisahlilt~ esm ay request reasc~ nahica ccc. lnmodattons such as ~ nterpreters, a lternative formats, or assistance r.: h
phy, lcal acccsslbll~ t~ I[. " ou requlre accornrnociatrc, ris. contact the Chid Clerk's Office at ( 602) 542- 3032.
DATE: Tuesday, December 3, 1996
TIME: 8: 30 a. m.
PLACE: Senate Hearing Room 1
1. EMPOWER Redesign: Proposal for welfare reform changes under P. L. 104- 193
- Presentation by Dr. Linda Blessing, Director, Department of Economic
2. Discussion of options available to the states under P. L. 104- 193
3. Public Testimony
Senator Richardson, Co- chair
Senator Patterson
Senator Kennedy
Representative Allen, Co- chair
Representative Anderson
Representative Pickens
" Titk 11 of the Amencans Wth Drsab~ hbesA ct prohrbfts me Amona Senate from disoiminating on the basis of disability in the provision
of Its servtces and pubbc meebngs. Indwtduals wth d~ sab~ lrtrems ay request reasonable aooommodations, sud, as interpreten or
anernatlve fonnafs. by cwtecbng Me Senate Seaetary's ORce at ( 6MJ 5424231 ( mce) as soan as possible. Please be speak about
the agenda Item m whrch you are Interested and for whtch you are reauestrng en accommodation. The Senate may not be able to
prowde ceflaln accommodattons pnor to Me meetrng unless they are requested a reasonable time in advance of the meeting. 7Bis
agenda mll be made ava~ lable m an elternatwe format on request
O ~ etno the Public
JOINT INTERIM STUDY COMMllTEE ON BLOCK GRANTS
DATE: Monday, December 9. 1996
TIME: 1 : 30 p. m.
PLACE: House Hearing Rooms 3 and 4
1. Presentation by the Department 6f Health Services:
Teen Pregnancy Program " Sex Can Wait"
- Marianna Bridge, Office Chief, Women's and Children's Health
2. Discussion of Welfare Reform Block Grant policy options
3. Public Testimony
Senator Richardson, Co- chair
Senator Patterson
Senator Kennedy
Representative Allen, Co- chair
Representative Anderson
Representative Pickens
" TiNe I1 of the Amencans With Drsabrlrtres Act pmhrbrts the Anzona Senate from drscnminating on the bags of disabrlity m the provrsron
of rts services and publrc meetrngs lndrvrduals wrth drsabrlrtres may request reasonable accommodatrons, such as rnterpraters or
altematrve formats by contactrng the Senate Secretarys Office at ( 602) 542- 4231 ( vorce) as soon as possrble Please be specrfic about
the agenda Item rn whrch you are rnterested and for whrch you are requestrng an accommodatron The Senate may not be able to
provrde certarn accommodatrons pnor to the meetrng unless they are requested a reasonable time ~ n advance of the meetrng Thrs
agenda wrll be made evarlable m an altematrve format on request
O~ etno the Public
DATE: Friday, December 20, 1996
TIME: 1 : 00 p. m.
PLACE: Senate Hearing Room 1
1. Committee discuss~ ono f- the policy options available to the states under P. L.
104- 1 93 and preliminary recommendations.
2. Public Testimony
3. Committee vote on policy option recommendations.
Senator Richardson. Co- chair
Senator Patterson
Senator Kennedy
Representative Allen, Co- chair
Representative Anderson
Representative Pickens
" Trfle I1 of the Amencans Wrth Drsabrlrtres Act pronrbrrs the Anzona Senate from discnmmatrng on the basis of drsability in the pmvisron
of rrs servrces and publrc meettngs lndrvrduals wrth Ursabrlrtres may request reasonable accommodabons, such as interpreters or
alternafrve formats by conracrrng the Senate Secrefacy s Offtce af ( 602) 542- 4237 ( vorce) as soon as possible. Please be specific about
the agenda Item m whrch you are rnteresled and for whrch you are requeslrng an accommodatron. The Senate may not be able to
provrde ceflarn accommodafrons pnor to the meelrng unless they are requesred a reasonable bme in advance of the meetmg. Thrs
agenda wrll be maae avarlable m an altematrve fonnat on request
C UGENDASllZ- 20- 96 BLK
V. Meeting Minutes
Minutes of
Wednesday, September 4, 1996
4: 00 p. m. - House Hearing Room 1
Co- chair Carolyn Allen called the meeting to order at 4: 05 p. m. and attendance was taken.
See attached sheet for other attendees.
Members Present - Staff
Representative Mark Anderson Pat Chumbley, House
Representative Robert McLendon Mimi Leonard, Senate
Representative Carolyn Allen, Co- chair
Senator Gary Richardson, Co- chair
Members Excused
Senator Tom Patterson
Members Absent
Senator Sandra Kennedy
Representative Allen informed the Committee since President Clinton had signed the
" Welfare Reform" bill, it would be up to the individual states to establish the methods for
distribution of funds. She added today's meeting would inform the Committee where the
program is currently, where it is going and how Arizona will get there. She further stated
the original bill was 615 pages and that she had asked many interested parties to
participate in today's meeting which would be mainly informal in nature and would have no
public testimony.
Senator Richardson noted this bill would cause the biggest change to welfare reform ever
in Arizona and that he was glad to see so many people at today's meeting who were
interested in the outcome. He cautioned the Committee to take its charge seriously as it
was imperative that the program be " done right" the first time.
Ted Ferris, Staff Director, Joint Legislative Budget Committee ( JLBC), introduced Lisa
Cotter, JLBC, who would be making the presentation on current block grants in Arizona.
Lisa Cotter, JLBC, distributed a summary prepared by JLBC entitled " Current Federal
Block Grant Programs" ( filed with original minutes). She noted the total grant amount of
existing block grants for Federal Fiscal Year ( FFY) 1996 was $ 138.7 million and the
estimate of new block grants and existing block grants for FFY 1997 was $ 412.1 million.
Ms. Cotter listed the existing current Federal block grant programs as follows: the Social
Services Block Grant, administered by the Department of Economic Security; the Low
Income Home Energy Assistance Program administered by the Department of Economic
Minutes of the Joint Interim Study Committee
on Block Grants.
September 4, 1996
Page 2
Security; the Substance Abuse Block Grant administered by the Department of Health
Services; the Mental Health Block Grant administered by the Department of Health
Services; the Maternal and Child Health Block Grant administered by the Department of
Health Services; the Preventive Health Block Grant administered by the Department of
Health Services; the Title VI Educational Improvement Block Grant administered by the
Department of Education; the Community Development Block Grant administered by the
Department of Commerce; and the Surface Transportation Program administered by the
Department of Transportation. She reviewed the information found on the handout which
specified the intent, amount and use of each grant.
Representative McLendon referred to the 10% allocated for administrative costs in most
of the grant programs and asked if that amount included costs associated with assembling
a computer system. Ms. Cotter explained that she did not have specifics for each of the
grants but that she would investigate the question further for the Committee.
Representative McLendon referenced the " Surface Transportation Program" and asked
what the majority of funds were used for. Ms. Cotter explained the use of the funds was
at the discretion of the Department of Transportation but that it was her understanding
most of the funds were used for highway projects.
Senator Richardson inquired whether programs funded by the block grants Ms. Cotter
referred to were integrated in order to deliver services in a more streamlined manner. Ms.
Cotter said it was the goal of those involved with the Community Services Block Grant to
integrate services wherever possible. Senator Richardson stressed the need to study
further the possible duplication of services and ways to enhance the delivery of needed
programs. Representative Allen agreed with Senator Richardson's statement.
Pat Chumbley, House Research Analyst, informed the Committee that its mandate is to
establish a review of existing block grants, study methods for the administration of block
grants and to report its recommendations to the President of the Senate and the Speaker
of the House.
Ken Behringer, General Counsel, Legislative Council, referred to the handout entitled
" Federal Welfare Reform Legislation, The Personal Responsibility and Work Opportunity
Act of 1996 ( H. R. 3734) in Relation to the Welfare System of the State of Arizona,
Including the State's Waiver ~ rovisionsE. MPOWER ( Employing and Moving People Off
Welfare and Encouraging Responsibility) September 4, 1996 Prepared by Martha Cronin,
Legislative Council; Ricki Kaplan, Legislative Council; and Stefan Shepherd, JLBC" ( filed
with original minutes). Mr. Behringer informed the Committee there are nine provisions
that comprise the EMPOWER welfare reform legislation that was passed by the Arizona
State Legislature in 1994. Implementation of the series of laws known as EMPOWER was
conditioned on receiving waivers from certain portions of the Federal Social Security Act
Minutes of the Joint Interim Study Committee
on Block Grants
September 4, 1996
Page 3
from the U. S. Department of Health and Human Services. He noted those waivers were
granted in May of 1995 and the EMPOWER legislation was subsequently implemented on
November 1, 1995. The waiver duration is seven years.
Martha Cronin, Research Analyst, Legislative Council, further explained that under
H. R. 3734, states have the option of continuing to operate their welfare systems under their
existing waivers or to terminate their waivers without being subject to any accrued cost
liabilities. Ms. Cronin referred to the handout Mr. Behringer introduced into record, and
explained the State's plan and the Federal plan and compared on a side- by- side basis.
Representative McLendon asked if it is the responsibility of the Legislative or the Executive
branch to carry out changes. Ms. Cronin said it was her understanding the Legislature has
the authority to appropriate the block grants but that she was not entirely sure and referred
the matter to Mr. Behringer.
Mr. Behringer said he believed the Federal law and State law were consistent on their
interpretations of who was to deal with the issue of block grants. Representative
McClendon said it was his interpretation that block grants were to be administered through
the Executive Branch, and that he wondered if the Statutes would need to be changed to
reflect that interpretation. Mr. Behringer said he believed the Legislature already
possessed the authority to appropriate the block grant dollars. Representative McLendon
queried whether decisions could be made without both branches being involved..
Peter Burns, Governor's Office, responded the issue Representative McLendon referred
to regarding the allocation and control of block grants was currently being researched and
that legislative authority and involvement would be sought and anticipated.
Representative Anderson referred to the " Brown Amendment" to H. R. 3734, and asked
what block grants it would apply to. Mr. Behringer returned and explained the amendment
applies to the Child Care Block Grants and Temporary Assistance for Needy Families
Representative McLendon asked if the Leg~ slaturew ould have to tailor its approach to
block grants to the Federal model. Ms. Cronin returned to the podium and explained it
would be up to the Legislature to decide how it wished to proceed. He asked the Chair if
it would be part of the Committee's formal recommendation that the Committee decide
which option it would pursue. Representative Allen said she believed that language to that
effect could be part of the recommendation.
Ms. Cronin referred again to the table and pointed out " Part I" was a comparison of
EMPOWER VS. TANF. She reviewed the provisions found in the table and the policy
considerations that need to be made in order to decide which direction the State should
Minutes of the Joint Interim Study Committee
on Block Grants
September 4, 1996
Page 4
go. Comparisons of the time limits, exemptions, family cap, transitional medical assistance
and child care, unwed minor parents, work requirement for unwed teen parents, 100- hour
rule, sanctions for noncompliance with work requirements, individual development
accounts, and the JOBSTART pilot program were made in the table and reviewed by Ms.
Ms. Cronin proceeded to Part II of the table entitled " Additional State Welfare Provisions
VS. H. R. 3734" which compared the following issues: allowable uses of funds, funding
levels, appropriation of monies, start date, eligibility requirements, benefit levels, work
requirements, residence status, paternity and child support, legal immigrants, immigrant
deeming requirements, illegal immigrants, child support disregard, child care block grant,
funding levels, MEDICAIDIAHCCCS, and food stamps.
Dr. Linda Blessing, Director, Department of Economic Security ( DES), referred to the
handout entitled " Welfare Reform State Options" ( filed with original minutes) and pointed
out to the Committee Arizona was already " ahead of the game" when it came to applying
for waivers in order to develop its own welfare program. She informed the Committee that
it was imperative that a new State plan was developed quickly and returned to the Federal
government since Arizona could lose some grant money. She added it was in Arizona's
. best interest to develop a transitional plan that will continue to allow flexibility with Federal
block grant dollars. Dr. Blessing emphasized the long range goal of the Department was
to work with the Governor's Office and the Legislature to focus on the proyisions and goals
of EMPOWER in addition to employment, personal responsibility and prevention and be
able to make any changes to the plan during the regular Legislative session. Dr. Blessing
asked the Committee members to pay special attention to numbers 1 ., 4., 5., and 8. She
further referred the Committee to the last page of the handout, specifically the provision
dealing with food stamps, adding that studies were currently being conducted in hopes of-simplifying
the program for families. She added DES would continue to work with the
Governor's office to develop a transitional plan.
Representative Anderson asked Dr. Blessing if she was confident with the Legislature's
ability in making decisions regarding the program. Dr. Blessing said she believed policy
options were clearly under the purview of the Legislature. She added it was her objective
to get the maximum block grant amounts and that it was urgent for the Legislature to
proceed with its work.
Leslie Johnson, representing Congressman Salmon's Office, said Congressman
Salmon wants Arizona to be involved in the process and wants to see its program succeed.
She added the issue is not a partisan one and that the block grant concept is a way to
deliver services to those who need them in the most efficient manner. She spoke in
support of the flexibility block grants allow and noted that Congress has a stake in the
success of the program.
Minutes of the Joint Interim Study Committee
on Block Grants
September 4, 1996
Page 5
Representative Allen informed the Committee she and Senator Richardson would be
attending a three day conference in Washington, D. C. that would give them further
information on block grants and that a second meeting would be scheduled upon their
Representative Anderson thanked those who had prepared the handouts distributed to the
Committee members and noted the comparisons would be helpful to the Committee
members in reaching a decision on which issues to address.
Representative McLendon agreed with Representative Anderson and addressed Ms.
Johnson's concerns at the Federal level. He added he was pleased to see all those
attending today's meeting and that he would depend on those people to keep him informed
of issues vital to making recommendations.
Representative Allen commended Janet Regner for her paper entitled " Block Grants with
a Vision" and recommended that all of the Committee members familiarize themselves with
Without objection, the meeting was adjourned at 5: 32 p. m.
Respectfully submitted,
Arlene Seagraves. Comqttee Secretary
( Tapes on file in the Office of the Secretary of the Senate)
Guests Attendinq Meeting
MEETING 50, Q+ / , - s& A4 immrn. DATE
NAME AND TITLE ( Please print) REPRESENTING BILL NO.
Interim Meetina Notice
Open to the Public
Joint Interim Committee on Block Grants
Moriday, October 7, 1996
8: 30 a. m.
Senate Hearing Room 1
1. Opening Remarks
2. Discussion: Major Legislative Decisions for Implementing PL 193
- Welfare Reform Block Grants
3. Funding Issues: Presentation by the Joint Legislative Budget
Committee staff
Overview of the current funding for Aid to Families with
Dependent Children ( AFDC), Emergency Assistance, Job
Opportunities and Basic Skills Training ( JOBS), and Child
Review of Welfare Reform Block Grant Funding
4. Child Support Enforcement: Presentation by Nancy Mendoza,
Director, Division of Child Support Enforcement, Department of
Economic Security
Overview of the provisions of PL 193 relating to child
support enforcement
Mandates and options available to the states
5. Public Testimony
Senator Richardson, Co- chair
Senator Patterson
Senator Kennedy
Representative Allen, Co- chair
Representative Anderson
Representative McLendon
" Title I1 of the Amencans With Disabilities Act prohibits the Arizona Senate from discnrninating on the basis of disability h the provision
of its servrces and publrc meetings. lndividuals with disabilities may request masonable accommodations, such as interpreters or alternative
formats. by contactrng the Senate Secretary's Office at ( 602) 5424231 ( voice) as soon as possible. Please be specific about the agenda
Item m which you are rnterested and for which you are requestrng an accommodation. The Senate may not be able to provide certain
accommodations pnor to the meeting unless they are requested a reasonable trme m advance of the meeting. This agenda will be made
avarlable rn an alternabve format on reauesf.
Minutes of
Joint Interim Study Committee on Block Grants
DATE: Monday, October 7,1996
TIME: 8: 30 a. m.
PLACE: Senate Hearing Room # 1
Members Present
Senator Patterson
Representative Anderson
Representative McLendon
Representative Allen, Co- chair
Senator Richardson, Co- chair
Member Absent
Senator Kennedy
Senator Richardson called the meeting to order at 8: 40 a. m. and announced that
senator Kennedy would be arriving momentarily.
Approval of Minutes
Senator Richardson called for approval of the minutes of September 4, 1996 and,
without objection, they were approved as distributed.
Major Leqislative Decisions for lmplementinq PL 193 - Welfare Refonn Block
Mimi Leonard, Research Staff Analyst, distributed a memo on Federal Welfare Block
Grants - Major Decisions for State Legislatures ( filed with original minutes), outlining
the cate. gories the Legislature will need to address.
Ms. Leonard stated Arizona's State Plan was submitted on October 1, 1996 and under
Temporary Assistance to Needy Families ( TANF) Arizona will receive an additional $ 23
million than under Aid to Families with Dependent Children ( AFDC), and $ 6 million in
child care funding.
Ms. Leonard noted the handout entitled State Plan Differences ( filed with original
minutes), prepared by the Department of Economic Security ( DES), explains the
Employing and Moving People Off Welfare and Encouraging Responsibility
Joint Interim Study Committee on
Block Grants
October 7,1996
Page 2
( EMPOWER) was submitted as the State Plan. The only changes to the State Plan
are those required by federal law.
Ms. Leonard referred the members to the goals and objectives regarding out- of-wedlock
births and teen pregnancies in the Arizona State Plan ( filed with original
Ms. Leonard stated the reason the federal legislation requires establishment of goals is
to ensure the issue is brought before the public for debate and to ensure legislative
oversight. She explained if a state's goals are not met, there are no penalties, however
there are substantial incentives for success in meeting related goals specified in the
bill. The top five states who decrease the out- of- wedlock birth rate, without increasing
the abortion rate, beginning in Fiscal Year ( FY) 1999 through 2002, will be awarded
$ 20 million for each year the individual state is the most successful in meeting the
Ms. Leonard distributed the most recent summary entitled Analysis of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 ( filed with original
. minutes).
In response to Senator Patterson, Ms. Leonard explained the determination of success
for the $ 20 million award is based on the top five states that are successful in meeting
the requirements, not what goals are set.
In response to Representative McLendon, Ms. Leonard stated presently federal
legislation does not provide direction on how states are to use the $ 20 million award.
Senator Richardson stated he presumed Congress was trying to reverse the negative
incentive and look at how they could reward the states initially. He added if caseloads
drop, then federal funds decrease, which might be seen as a negative. However, this
provides more federal money to work with on a limited basis. Representative
McLendon stated the idea of having a contest using $ 20 million dollars of federal funds
seemed a little frivolous.
Ms. Leonard said the United States Department of Health and Human Services ( HHS)
may set forth rules to guide the states regarding the incentive. Representative Allen
stated she sits on the Teenage Pregnancy Task Force and Arizona could use those
funds to continue to help in this area.
In response to Senator Richardson, Ms. Leonard stated, in reading the bill, she could
not find any direction regarding how states can use the $ 20 million award.
October 7,1996
Page 3
Joint Interim Study Committee on
Block Grants
Marge Cawley, Senior Fiscal Analyst, Joint Legislative Budget Committee ( JLBC)
distributed the Temporary Assistance for Needy Families Block Grant Comparison to
Current System and Child Care Block Grant Comparison to Current System ( green
sheets filed with original minutes).
Stefan Shepherd, Fiscal Analyst, JLBC explained TANF consolidates the AFDC
program, job training program for AFDC recipients, and the Emergency Assistance
Program. He stated Arizona will receive an additional $ 23.8 million in the TANF block
grant than it would have expected to receive had the Welfare Reform Bill not passed
and the old programs continued as they were.
In response to Senator Richardson, Mr. Shepherd stated the amount represents a
change from the earlier projections which were based upon HHS projections of what
Arizona would receive in federal FY 1997. Senator Richardson clarified that under
block grants the State of Arizona is going to receive more money than it would have
prior to welfare reform.
Mr. Shepherd clarified that in the earlier years the State will receive more money
through block grants than through the old system, however, caseloads are projected to
increase in later years and the old system would have provided more money. He
continued that HHS calculates Arizona will lose some money over the six years of the
block grant, however, HHS projected Arizona would spend more than $ 15 million this
year alone whereas JLBC is projecting Arizona will actually spend less. Mr. Shepherd
concluded if caseloads increase at the rate HHS projects over the lifetime of the block
grants, there will be a slight loss in federal funds to the state.
In response to Representative McLendon, Mr. Shepherd indicated JLBC has not
prepared any projections on caseload growth.
Regarding the TANF block grant, Mr. Shepherd stated PL 193 provides $ 2 million in
federal matching funds from federal FY 1997 through FY 2001. He explained there are
two triggers for qualification for these funds: 1 ) high unemployment rates; or 2) high
food stamp caseload growth. In order to draw down monies from these contingency
funds, Arizona must spend 100% of what it spent on TANF programs in federal FY
1994, as opposed to the basic maintenance of effort requirement of 80%.
In response to Senator Richardson, Mr. Shepherd explained states can only draw down
20% of their block grant in any one fiscal year, which represents approximately $ 44
million for Arizona. These funds must be matched by the State on a 113 state dollars,
213 federal dollars basis.
Joint Interim Study Committee on
Block Grants
October 7,1996
Page 4
Mr. Shepherd indicated there is also a " rainy day" loan fund from which a state can
borrow up to 10% of its grant, which must be repaid within three years. He explained
an illegitimacy reduction bonus available for the five states with the greatest reduction
in out- of- wedlock births and a Performance Bonus Fund which provides $ 200 million a
year for the next five years for high performance states.
In response to Representative Mclendon, Mr. Shepherd indicated TANF does include
emergency assistance and he did not know how Arizona would track who has received
emergency assistance, and would defer that question to DES.
Mr. Shepherd explained that any cash assistance paid out of TANF does count against
the 60- month time limit and he did not know if DES has any guidelines in this area.
Richard Stavneak, Deputy Director, JLBC stated it is a problem that every state will
face because a national registry is not in place at this time and will become an issue as
the five years progress. Senator Richardson suggested the State's federal
representatives look into this issue.
Mr. Shepherd explained the Child Care Block Grant, referring to the green sheets
distributed earlier. He stated JLBC estimates the State will receive $ 6 million more in
federal FY 1997 than it would have otherw~ se. He said JLBC projected a higher total
prior to this time for two reasons: 1) they used the federal FY 1997 Child Care
Development Block Grant figure rather than the federal FY 1996 figure; and 2) there
was slightly higher spending for these programs than expected for federal FY 1 997. He
concluded the Child Care Block Grant serves any of the following: 1) current recipients
of welfare or AFDC; 2) people at risk of enrolling in AFDC; or 3) people transitioning off
of AFDC, for child care assistance.
Senator Patterson referred to page 2 of the green sheets and questioned the high costs
for administration. Ms. Cawley stated that figure represents just under 16% of the total
amount spent on child care. She indicated that the new block grant for child care
mandates not more than 5% for administration, but they also exclude several things,
such as eligibility determination, etc. She noted that after all of the exclusions, the
state is probably within the 5% and that DES should be able to provide information as
to exactly how the $ 1 1 million is distributed.
In response to Senator Patterson's question of whether vouchers could be issued for
child care, Mr. Shepherd indicated, as he reads the bill, there are no limitations or
restrictions on the method of providing child care to recipients and it would probably be
up to the Legislature.
October 7,1996
Page 5
Joint Interim Study Committee on
Block Grants
Senator Patterson asked if there were any federal restrictions precluding the State from
giving the money directly to community or private organizations and not running an
AFDC program. Mr. Shepherd noted there is very little guidance in the federal law
specifying what a State must include for an acceptable program.
Senator Patterson questioned if there is an approval process the states must access to
make changes in their Plan. Mr. Shepherd said the answer is " sort of' yes. He
explained the federal government could say they disagree with a concept of a Plan,
however, they have no provision for enforcement: Mr. Stavneak indicated that
statutorily the federal government is in a weaker position than before and a state does
not have to obtain formal approval, but rather the federal government certifies that a
state's plan looks right.
In response to Senator Patterson, Mr. Shepherd indicated if caseloads are reduced the
federal draw down will not be reduced. He explained Arizona will receive $ 222.4
million every year, however, if the State spends less than 80% of the federal FY 1995
amount, then the State's grant will be docked a dollar for every dollar below the 80%
Senator Richardson informed the members Senator Kennedy had a family emergency
and would not be attending today's meeting.
Representative McLendon questioned if someone will be drafting policy decisions
before the legislative session beg~ nsin January. Senator Richardson stated that was
the Committee's charge as referred to in the memo distributed earlier from Mimi
Leonard. Mr. Stavneak also indicated DES is currently looking at redesigning the
program and should have proposals developed by November.
Representative McLendon pointed out that local governments and private sector
groups within the State should be solicited for their input in the process also.
Senator Richardson said the State has the authority to allow welfare moms to set up
home day care programs using TANF dollars to assist them in getting off welfare.
In response to Senator Patterson's inquiry on privatization of job placement, Mr
Shepherd indicated there are no specificat~ onsin this area.
Mr. Stavneak pointed out that DES has been very creative in pulling down federal
emergency assistance dollars which has resulted in the State spending money on items
not traditionally associated with welfare, such as Child Protective Services case
managers and programs for domestic violence, community action, and the homeless.
Joint Interim Study Committee on
Block Grants
October 7,1996
Page 6
Dr. Linda Blessing, Director, DES informed the members that the State Plan has
been filed and distributed a list of several forums scheduled around the State regarding
Welfare Reform ( filed with original minutes). She stated similar forums were conducted
in April of this year and DES prepared a summary document from those forums. She
added the upcoming forums will address the specific issues on the list of issues
distributed at the September 4, 1996 meeting of this Committee.
Dr. Blessing stated the policy options developed by DES are presently being reviewed
for an executive recommendation. She said DES is also redesigning the way they
operate to further assist the mission of moving people into self- sufficiency and the work
groups should complete their labors by mid- November.
Dr. Blessing noted that the State has been very progressive in the area of Child
Support Enforcement ( CSE) and has been working with the Child Support Coordinating
In response to Representative Anderson, Dr. Blessing stated the DES work groups are
on- going internal meetings and she would be happy to keep him informed.
In response to Representative McLendon, Dr. Blessing stated DES does think it will be
advantageous for both the State and the tribes if block grant monies are directly given
to the tribes. DES has met with the Intertribal Council and the Navajo Nation and she
noted the Navajo President expressed a strong interest. She suggested the Legislature
might want to include legislative incentives next session for tribal governments.
Child Support Enforcement
Nancy Mendoza, Director, Division of CSE, DES presented the changes in CSE in
the federal Welfare Reform Bill. She explained one- third of the caseloads are
interstate, and the Department is only successful to the degree other states are
successful in working with Arizona.
Ms. Mendoza noted two accomplishments already enacted by the Legislature: 1)
enactment of the Uniform Interstate Support Act; and 2) requirement that a father must
voluntarily acknowledge paternity or go through an adjudicated paternity process in
order for his name to appear on a birth certificate.
Ms. Mendoza noted the following: CSE continues to be a matched federal funding
source and is not block gra- nted; the State share is 34% and the federal is 66%,
however the new rate will be 20% for the State and 80% for the feds; the costs of
October 7,1996
Page 7
Joint Interim Study Committee on
Block Grants
genetic testing will be funded at 90% federal and 10% State; and the requirement that
Congress study the incentive formula and consider changes for federal FY 1999.
Ms. Mendoza explained the elimination of the $ 50 disregard which stopped on October
1, 1996: The State previously did not take into account the first $ 50 of child support
collected when a family was on assistance. If the State wants to continue to disregard
that income, they would have to make up both the State and federal share. She stated
the federal share is $ 1 55,827 per month and there are 4,722 families on an average
who will be affected by the disregard. She concluded that to do nothing until the
remainder of this FY will cost $ 1.4 million.
Senator Patterson asked what the effect of elimination of the disregard will be on child
support collections. Ms. Mendoza stated there is no substantive data on whether
disregarding this income specifically acted as an incentive that produced results or not.
She added that in talking to staff about the incentive, they did not feel the disregard
was effective in promoting cooperation and they are more optimistic that sanctions for
noncooperation will have more effect.
In response to Representative Allen, Ms. Mendoza explained that legislation is not
required regarding the disregard. Previously federal law required that the first $ 50 was
passed through, however, that legal framework is gone and there is nothing in state law
requiring it. She said it is a policy decision and for the month of October DES is
continuing the disregard.
In response to Representative McLendon, Ms. Mendoza explained the money to fund
the d~ sregardw ill come out of the State's share of returned earnings, which will
consequently not be available for a federal match or operating expenses. She
explained that the break- even point for the State is January. Senator Richardson
emphasized this is one of the policy decisions the Committee needs to address.
Dr. Blessing reiterated it is not something that requires a change in State law and the
matter was brought to the Governor's attention which he addressed in his cover letter
- for the State Plan to members of the Legislature. She emphasized the Governor wants
to work closely with the Legislature in making the decision, however, theoretically,
DES, under the Governor's direction, could discontinue the payments.
Ms. Mendoza addressed an area requir~ ngle gislation regarding the order in which
families or the State receive collections of arreatages. She explained Congress has
adopted a Families First Policy on Arrearages to be phased in beginhing October 1,
1997 through the year 2000. Currently if a family goes off assistance, arrearages
collected for the time before assistance or after is proportionally shared between the
Joint Interim Study Committee on
Block Grants
October 7, 1996
Page 8
State and the family. Beginning October 1, 1997, all arrearages that accrue after the
family leaves assistance go to the family first and by the year 2000 all arrearages
accruing before and after assistance go to the family first before the State. She stated
the order would be as follows: 1) collect the money; 2) first payment would go to any
current support due the family; 3) second payment to any debt that had accrued to that
family either before or after they went on assistance; and 4) third payment to the State
for amounts that accrued while they were on State assistance. She added the only
exceptions are intercepted tax refunds on the federal level, which go to pay back both
the State and federal government.
Ms. Mendoza addressed direct interstate wage withholding under the Uniform Interstate
Family Support Act ( UIFSA). UIFSA standardizes how cases are to be processed
across state lines. One of the features of the law is the ability of the custodial parent's
state to reach directly to the employer of the noncustodial parent and issue a wage
withholding order.
Addressing the issue of how to find out where a noncustodial parent is employed, Ms.
Mendoza explained the provisions of the Mandatory New Hire Reporting Program. It
will take effect in 1997 nationally and. a voluntary program is already in place in
Arizona. Beginning in 1998 all employers will be required to notify a state new hire
directory within 20 days of hire. Ms. Mendoza pointed out that the State is presently
experiencing great success with the voluntary program. The federal government and
military will also be required to be a part of the Program.
In response to Senator Richardson, Ms. Mendoza stated a person's social security
number will be the primary tracking tool.
In response to Representative Allen, Ms. Mendoza stated it is anticipated the process
will be primarily automated and DES is working on streamlining the operation by
redeployment of individuals. She noted the program will likely make some of the
activities of caseworkers less labor intensive and may reduce work for enforcement
Ms. Mendoza, explained the sanctions for non- cooperation if a TANF requirement and
said the Legislature will need to look at when sanctions should be imposed, the degree
of those sanctions, and how sanctions can be removed.
Ms. Mendoza explained the centralized payment processing, which was centralized
during the last Legislative session for 4- D cases and noted there is a work group in
Pima County looking into this issue.
October 7,1996
Page 9
Joint Interim Study Committee on
Block Grants
Ms. Mendoza listed the areas the federal law requires states to access which will
require legislation: - ability to request records of other state and local government agencies;
- accessibility to privately held records, i. e. public utilities and cable utility
records, financial institutions; - ability to secure assets, i. e. unemployment compensation, workers
compensation, etc.
Senator Richardson expressed privacy concerns and Ms. Mendoza concurred DES
does believe it is a serious concern and has implemented 60 different levels of security
access to the system and avenues for disciplinary action.
Ms. Mendoza stated the Directory of New Hires will be housed within the Social
Security Administration and whatever safeguards accrue to the Administration will
accrue to the Directory. Senator Richardson stated it is an important issue to be
looked into.
In response to Senator Patterson, Ms. Mendoza stated the national average for child
support collection is 18% and Arizona is at 12%, up from 3% in 1992.
Senator Patterson stated data supports the conclusion that the more contact the
noncustodial parent has with a child the more likely they will pay their child support and
he asked if there are any ways to incorporate that into public policy. Ms. Mendoza
stated the Supreme Court has recently adopted new guidelines for CSE and are
making adjustments to the amount of support based on the amount of visitation. She
added the federal law provides a grant to promote visitation and the Child Support
Coordinating Council has launched a public relations effort emphasizing the
noncustodial parent's important role in a child's growth and development. Ms.
Mendoza stated the guidelines adopted by the Supreme Court go into effect on '
November 1 and she would provide a copy of them to the members.
Senator Richardson requested Ms. Mendoza obtain the background information used
in developing the Supreme Court guidelines.
In response to Representative McLendon, Ms. Mendoza stated the interstate
procedures will definitely cut down on the bureaucracy and may allow DES to redeploy
resources. She emphasized there are close to 300,000 cases on a regular basis and
approximately 38,000 are paying on a regular monthly basis.
Msgr. Edward Ryle, representing the Arizona Catholic Conference and the
Arizona Network for Community Responsibility, stated the block grant movement
Joint Interim Study Committee on
Block Grants
October 7,1996
Page 10
will have a great effect on human services in Arizona. He explained the Network
brings together several community action programs whose mission is to try to
understand the changes in the welfare system due to block grants and how they will be
implemented in Arizona. The agencies in the Network represent a broad range of
Msgr. Ryle explained the circumstances that will directly impact United Way agencies: - 4,200 people will lose general assistance because of change in eligibility, the
majority of whom are in Maricopa County; - 2,500 people with disabilities due to substance or alcohol abuse will lose
Supplemental Security Income ( SSI) and eligibility for the Arizona Health Care
Cost Containment System ( AHCCCS) will be lost because of the loss of eligibility
for SSI; - 24,000 people 18- 50 years of age who are childless and not disabled will only
be eligible for food stamps for three months of unemployment out of any three-year
period, which puts pressure on food banks, etc.
Msgr. Ryle stated the Federal Emergency Management Agency ( FEMA) was cut from
$ 130 million to $ 100 million and as a result Maricopa County lost $ 112,000 in FEMA
funding. He also noted that on July 1, 1996 social service block grant money was cut
by 1 S%,. which are funds that go to the private sector for preventive services to keep
people from knocking on DES' door. He stressed the Committee needs to take a broad
look at what the private sector will be up against.
Representative Anderson inquired what percentage of the money the State spends on
welfare programs goes directly to the private sector and if the private sector feels it is
receiving enough or should the system be redesigned to make it more effective. Msgr.
Ryle stated the Catholic Conference is funding a small grant to analyze to what extent
State and voluntary non- profit agencies and local governments derive funds and they
hope to have information within the next couple of months.
In response to Representative Anderson, Msgr. Ryle stated vouchers should be
considered and it would be helpful to look at other states who have implemented the
voucher proposal in child care development block grants.
Senator Richardson stated he has been advocating that more block grant funds be
distributed to local county entities and private providers. Msgr. Ryle stated programs
that meet a person's basic human needs of food, clothing and shelter should be
primarily State programs with state eligibility standards. He added the soft services,
such as job development and training, would be appropriate in the private sector.
October 7,1996
Page 11
Joint Interim Study Committee on
Block Grants
Representative McLendon stated he has requested information from Dr. Blessing on
how block grants work and how they affect local providers. . He said he would copy that
information to the members of the Committee when he receives it.
In response to Senator Patterson, Msgr. Ryle stated philosophically he feels the State
has a responsibility to meet a person's basic needs in fairness to equity of life.
Jose Zapata, representing himself, stated discontinuation of the $ 50 disregard will
have a great impact on his family and also expressed concern with the food stamp
program. He indicated he has difficulty receiving child support from his ex- wife, who
is the non- custodial parent residing out of state. Senator Richardson assured Mr.
Zapata that under the new program he will be the first in line for child support payments
and suggested he meet with Ms. Mendoza after the meeting to address his concerns.
Janet Regner, Executive Director, Arizona Community Action Association, stated
the Welfare Reform Legislation significantly impacts the very poor in Arizona. She
explained poverty in Arizona has risen to 16%, which is higher than in 1990 and noted
welfare recipients represent only 25% of the poor. She requested that the Committee
address poverty issues, not just the issue of trying to get people off of welfare.
Ms. Regner asked the members to keep Block Grants with a Vision in mind and to
recognize that the eight principles contained in the document were meant as a guide in
protecting the most vulnerable population.
Ms. Regner stated the Association is helping set up the informational meetings with
DES. She added most people feel privatization is a good option and informed the
members that child care vouchers are currently in place.
Senator Richardson stated significant efforts should be made to reduce the tax burden
on families as a means of helping the working poor.
In response to Representative McLendon, Ms. Regner said there are probably many
people in Arizona who would qualify for welfare benefits but are not applying because
perhaps they don't understand the welfare system.
Dr. Blessing, in response to Representative McLendon, stated that the co- sponsoring
agencies have done a great job in spreading the word to the local communities and
assured they would do everything possible to maximize the opportunity.
Senator Richardson stated the next meeting is tentatively scheduled for October 22,
1 996.
Joint Interim Study Committee on
Block Grants
October 7,1996
Page 12
Representative Allen suggested the Committee meet for a half day session and insist
that other members of the Legislature attend because of the lack of knowledge and
the fact that a lot of money is on the table.
Representative Anderson suggested at the next meeting that more detail be provided
regarding exactly where funds are dispersed.
Senator Richardson adjourned the meeting at 11: 50 a. m.
Respectfully submitted,
Please Print
i. cl\ n+- \-+ a\- ~ ~ m : t t Q <
Minutes of
Tuesd. ay, October 22, 1996
8: 30 a. m. - House Hearing Room 4
Co- chair Carolyn Allen called the meeting to order at 8: 35 a. m. and attendance was noted.
Senator Patterson
Senator Kennedy
Representative Anderson
Senator Richardson, Co- chair
Representative Allen, Co- chair
Mimi Leonard, Senate
Victoria Tafoya, Senate
Representative McLendon
Representative Allen said she appreciated both the Committee members and the other
Legislators who were attending in the audience.
Mimi Leonard, Research Analyst, gave a slide presentation to the Committee which
Representative Allen referred to as a " refresher course" on the Federal block grants
legislation. Ms. Leonard explained the final version of P. L. 104- 193 is 252 pages long and
the conference report is 350 pages. The provisions will allow the states to make changes
in the areas of Medicaid, Food Stamps, SSI, child support programs and other benefit
programs for legal residents. The presentation focused mainly on the Temporary
Assistance to Needy Families program ( TANF), the choices available to the states, and
what other states are doing in response to the legislation.
Ms. Leonard reviewed the goals of TANF; i. e., to give the states an opportunity to create
a new system that promotes work and responsibility and strengthens families, prevents and
reduces out- of wedlock births, encourages the formation of two- parent families and
reduces dependence on the government. The use of the TANF grant is allowed " in any
manner that is reasonably calculated to accomplish the purpose of this part."
Ms. Leonard testified the amount of the block grant is $ 222,400,000 and that states must
maintain 89% of historic spending. The Maintenance of Effort ( MOE) can be reduced to
October 22,, 1996
Page 2
75% if work participation rates are achieved and failing MOE results in dollar for dollar
reductions in state aid. There is additional funding that can be received for population
increases, a contingency fund and a revolving loan fund. In addition, there is a $ 50 million
fund to promote abstinence for states that have a lower number of out- of- wedlock
Ms. Leonard showed a table illustrating the AFDC caseload from 1992 projected through
1996 and the caseload for the " Two Parent Employment Program" ( TPEP) from 1992
projected through 1996.
Ms. Leonard reviewed the bonuses and incentives built into the program to decrease
illegitimacy, measure high performance states and annual ranking for the most and least
successful programs. She also referred to the flexibility found under the TANF program
and the emphasis on work which will include the development of " Individual Responsibility
Plans," the inclusion of a community service requirement, mandatory work participation
rates that must be met by the states, the requirement that a client must be working after
two years of assistance and be allowed a total five- year lifetime limit.
Ms. Leonard explained a chart entitled " Annual Work Participation Requirements" which
requires states to meet annual work participation rates with respect to all families that
include an adult or minor child head of household receiving assistance. She listed the
allowable work activities as defined by the Federal government as:
1. Unsubsidized employment
2. Subsidized private sector employment
3. Subsidized public sector employment
4. Work experience ( including refurbishing publicly assisted housing if sufficient private
sector employment is not available.
5. On- the- job training
6. Job search and job readiness assistance for up to six weeks. No more than four
weeks may be consecutive. Individuals in states with high unemployment may participate
for 12 weeks.
7. Community service programs
8. Vocational educational training not to exceed 12 months for any individual.
9. Provision of child care services to an individual who is participating in a community
service program.
She further listed the additional activities that count after 20 hours or 30 hours for a two-parent
1. Job skills training directly related to employment
2. Education directly related to employment for recipients without a high school
October 22, 1996
Page 3
diploma or GED.
3. Satisfactory attendance at secondary school or course of study leading to GED for
recipients who have not completed secondary school.
4. Job search and job readiness once the individual has exceeded the six- week limit.
Teen heads of household under age 20 attending school or education related to
employment count toward the first twenty hours and there is a 20% limitation on vocational
educational training and teens in school. Senator Patterson asked about the work
requirement that included " job readiness" as a possible option. Ms. Leonard informed
Senator Patterson that the work requirements listed by the Federal government are more
stringent than Arizona's requirements.
Senator Richardson asked if there was a " menu" of options detailing work requirements for
the states to choose from. Ms. Leonard deferred to DES, but noted it was her
understanding states would be able to use any or all of the options. She also informed the
Committee the State of Texas had formed a " Workforce Commission" in order to streamline
entitlement programs related to TANF.
Ms. Leonard continued with the slide presentation, and explained the calculation of the
monthly participation rate for all families with the numerator being the number of families
receiving assistance that include an adult or minor head of household who is engaged in
work for the requisite hours divided by the number of families that include an adult or a
minor child head of household receiving assistance LESS the number of families
sanctioned in that month for failure to participate in work ( for up to three months in the
preceding 12- month period). It is also an option of the State to include families receiving
assistance under a tribal family plan in the work participation rate calculation.
Ms. Leonard informed the Committee of the " pro rata reduction in the work participation
rate" which gives states with net caseloads lower than FY 1995 levels a lower participation
rate. Reduction is equal to the percentage points ( if any) that the average monthly number
of families receiving aid in the preceding year is less than the average monthly number of
families receiving aid in FY 1995. Reductions due to changes in Federal law or state
eligibility criteria will not be counted. The reduction appears to apply to two- parent families,
and if caseloads rise above FY 1995 levels, states will face the full rate in the next fiscal
year. Ms. Leonard gave a rate reduction example to illustrate the criteria used.
Ms. Leonard listed the TANF penalt~ ese ffect~ veu pon submission of a state plan: a misuse
of funds requires repayment plus 5% for intentional violations; failure to comply with the
five year limit on assistance has a penalty of 5%; sanctioning a non- participating parent
with a child under age six and no child care has a penalty of up to 5%; failure by the State
to meet the MOE is a dollar- for- dollar reduct~ onin the grant.
October 22, 1996
Page 4
She further explained penalties that are effective either July 1, 1997 or six months after
submittal of a state plan ( whichever is later) as follows: failure to meet work participation
rates - 5% plus an additional 2% for consecutive failures with a 21% ceiling; failure to
submit quarterly reports - 4%; failure to participate in IEVS - up to 2%; failure to enforce
child support penalties - up to 5%; failure to comply with child support requirements of IV- D
- 1% - 2% with the second consecutive finding at 2% - 3% and the third consecutive
finding, 3% - 5%; failure to maintain MOE for contingency fund is penalized at the amount
of the contingency fund used.
Ms. Leonard explained the child care block grant effective October 1, 1996 consolidates
Title IV- A child care funding sources and eliminates the open- ended Federal match. It
further specifies that 70% must be used for specified groups, 4% must be used for
improving quality and availability of child care and that there is a 5% cap on administrative
Ms. Leonard continued her presentation by explaining the Medicaid program which is
effective July 2, 1997 or earlier at the state's option. Eligibility is based on the income and
resource standards for determining eligibility based on the State's AFDC state plan in effect
on July 16, 1996. A state can modify income and resource standards and may lower
income standards, but not lower than the State plan standard on May 1, 1988 and may use
methodologies less restrictive than July 16, 1996. Existing law regarding transition
assistance to those losing eligibility due to increased child support or earnings or
employment are continued and state waivers approved on or before July 1, 1997 may
continue. There is also an increase in the Federal share of administrative costs due to
eligibility rules.
Ms. Leonard described a table in her presentation entitled " Personal Responsibility and
Work Opportunity Reconciliation Act of 1996, Title IV: Restricting Welfare and Public
Benefits for Noncitizens - Major Provisions." The restrictions on Federally funded programs
to legal noncitizens in the United States prior to enactment is that they are ineligible for SSI
and food stamps except in certain cases. In addition, states have the option, upon
enactment, to deny benefits under the TANF program, the Title XX Social Services Block
Grant and nonemergency Medicaid. Current recipients are covered until January 1, 1997.
Legal noncitizens arriving after enactment are ineligible for all Federal means- tested
Federal benefits for five years although certain child nutrition and education programs are
excepted from this ban as well as some other exceptions. Illegal immigrants are ineligible
for all Federal benefits with exceptions.
Ms. Leonard went on to explain the restrictions on state and local- only funded programs
for legal noncitizens is as follows: states are authorized to deny state- only funded public
benefits to legal noncitizens with certain exemptions and current recipients are covered
until January 1, 1997. Illegal immigrants are ineligible for all state and local benefits with
October 22, 1996
Page 5
exceptions and states may elect to provide eligibility for illegal immigrants through state
laws enacted after enactment of H. R. 3734. The exceptions for the above mentioned
categories are to those individuals who are serving in the armed forces, veterans and their
respective dependents, refugees and those seeking asylum within the first five years of
U. S. residency and those who have worked 40 quarters. The programs that are exempted
are emergency medical services, emergency noncash disaster relief, treatment for
communicable disease, immunizations, certain housing programs, and other programs
specified by the U. S. Attorney General that provide basic in- kind services without a means
test, such as soup kitchens.
Representative Anderson asked if the State has the ability to check the status of children
in the free and reduced lunch program. Ms. Leonard explained AFDC and food stamp
recipients are asked for proof of residency but that she is unaware of requirements for the
nutrition programs. She said she would check further for the Committee.
Ms. Leonard further informed the Committee in the fiscal year following a reduction in the
TANF grant due to a penalty, states must increase their state spending by an amount
equal to the penalty and states do have the opportunity to enter into a corrective
compliance plan before a penalty is assessed. If the plan is accepted and the state
corrects the violation according to the plan, there would be no penalty imposed. A state
may also appeal any adverse action taken against the state. She directed the Committee
to the handout entitled " Penalties Against States" for further information ( filed with original
minutes). Senator Patterson asked if the MOE was able to be modified in light of falling
caseloads. Ms. Leonard said she was not aware of further reductions in the MOE. She
suggested the Committee contact the Congressional Delegation for amendments to the
law. Representative Allen said it was her understanding Congress was still studying the
rules for possible changes. She added it was a complex and mammoth undertaking that
will need further refining.
Dr. Linda Blessing, Director, Department of Economic Security ( DES), informed the
Committee the EMPOWER program has been working well and that issues such as
transportation and child care are things that need to be addressed " on the front end." She
spoke in support of focusing on unpa~ dw ork experience and internships rather than simply
focusing on the educational aspects of past programs. Dr. Blessing referred the
Committee to Gretchen Evans and Gerry Teebeau and added that " maintenance of
effort" documentation does not have to reflect only cash payments; rather it can also report
things like child care.
Gretchen Evans, DES, JOBS Program, expla~ nedth e JOBS program was mandated by
the Family Support Act of 1988 and its purpose was to provide education and training to
AFDC recipients in order to move those clients into self sufficiency. Recent shifts in the
program focus the emphasis on obta~ ninge mployment at the earliest possible time. Ms.
October 22, 1996
Page 6
Evans referred to a yellow packet of information distributed to the Committee ( filed with
original minutes) and asked the Committee to look at " Illustration 1" which is a diagram of
the program as it currently exists. She distributed copies of the forms used for applicants
( filed with original minutes) and told the Committee the JOBS programs and services
include employment services for those who are job ready or need job- seeking assistance,
job development and placement, job readiness training and job search; training services
for community work experience, training and work experience in the private sector, on the
job training and skills training; educational services that include English for speakers of
other languages, remedial education, high school or General Equivalency Diploma and
post secondary education. The intent of the JOBS program is to move everyone into
employment and Ms. Evans gave an example of a 22- year old female head of household
with two children who had little high school education and is without child care assistance.
She explained the case manager would assess the situation, arrange for 20 hours per
week GED work and child care for the woman. After completing the GED course in five
months and taking job readiness classes, the woman was able to secure a job at $ 6 per
hour, 35 hours a week. She is able to go off AFDC and will continue to receive 24 months
of child care and medical assistance as a transitionary measure. Senator Kennedy asked
how many people are served on each of the " tracks" listed on the " Arizona JOBS Program"
chart which included the " Basic Education" track, the " Pregnant and Parenting Teens"
track, the " Self- initiated Education & Training" track and the " Direct Employment" track.
Ms. Evans said she would provide that information for the Committee.
Senator Patterson asked if the 20 hours a week GED work was credited as employment
under Federal statutes. Ms. Evans explained most of those on the Basic Education track
are working part time in addition to working on their GED. She noted the emphasis has
changed in the Federal program from education to personal responsibility; i. e., a job.
There is an option to require work in the new Federal program in addition to the
educational requirements.
Ms. Evans referred to Illustration # 28 which lists statistics for SFY 1996 and is titled " JOBS
Management Indicators." The chart lists the number of total participants, participants by
the service model, component activity, the total who entered employment and the average
wage, the Federal JOBS participation rate and the number of families and children
receiving JOBS child care. Illustration # 3 gives a breakout of the JOBS 1997 budget and
asked the Committee to note the percentage of contract and voucher services. Ms. Evans
spoke in support of the JOBSTART program which was a pilot program that worked in
cooperation with private enterprise. Senator Kennedy asked if the program could be
considered a success. Ms. Evans said she believed it was and that over the last three
years the total number of participants had increased dramatically. She added, however,
that there was room for improvement in the program. She explained that in order to
participate in the program a client must be AFDC eligible and there are sometimes people
who " drop off' the system who are no longer eligible or who have found employment on
October 22, 1996
Page 7
their own. She noted that some of those who decide not to participate in the program are
Senator Kennedy referred to Illustration # 5, FY ' 96 Actuals and pointed out that of the
21,263 participants, only 5,905 of them were listed as having been employed. She asked
what happened to the remaining participants. Ms. Evans said she did not have exact
figures but that 14% of the remaining number were sanctioned or lost AFDC benefits, while
some leave AFDC voluntarily or move out of state. She added about 5,000 participate in
the JOBS program monthly. Ms. Evans further stated it was difficult to track all of the
participants individually. Senator Kennedy asked approximately how many of the
participants leave the state monthly. Ms. Evans said she did not have that data with her.
Senator Kennedy asked her to provide the information to the Committee members.
Senator Richardson referred back to Illustration # 4 and asked what " OOEn stands for. Ms.
Evans defined it as " Other Operating Expenses" and " PSn stands for " Personal Services."
Senator Richardson asked why the 1997 estimated budget was 30% more than 1996. Ms.
Evans deferred to David Longo.
David Longo, Budget Manager, DES, explained the 1997 estimate was based on full
staffing while the existing 1996 budget was actual dollars spent.
Ms. Evans referred the Committee members to Illustration # 6A in which a participation rate
comparison was done under the Family Support Act ( JOBS program) and TANF. Hours
under the JOBS program are combined and averaged across participants to equal or
exceed 20 hours per week. Those individuals working and the resulting percentage are
likely to be significantly lower because some JOBS activities do not count in TANF.
Additionally, house under TANF are not averaged across participants; each individual must
meet the required hours of work to be counted. Ms. Evans reported DES must develop
new strategies for work participants and find ways to count the mix of those who both go
to school and work. Representative Anderson noted that to meet the work participation
rate, people will have to be in " countable" programs. Ms. Evans explained that the current
focus was to do that very thing - to ensure that people were working in the kind of acts that
will count towards credit with the new program. Representative Anderson asked why that
was not already being done. Ms. Evans explained the original focus was on education and
now new Federal legislation requires a focus on work. Representative Anderson asked
how participants were reacting to the new requirements. Ms. Evans stated that through
focus groups conducted by DES, it was determined that people want to be in the JOBS
program and that the only barrier to most people securing employment was the lack of
transportation and the lack of child care.
Senator Patterson referred to lllustration # 2B, and asked how many of those in the
program stay employed. Ms. Evans stated 78% were not back on AFDC at the six month
October 22, 1996
Page 8
mark and that attempting to get a number at the 90- day mark was somewhat misleading.
Senator Patterson asked what the sanctions are for someone who does not work. Ms.
Evans testified the adults share in the families AFDC grant could be removed for one
month and that a sanction of three to six months could be forthcoming if there is continued
noncompliance. The adult's share of AFDC would amount to an average of $ 72 per
month. Senator Patterson contented it was his belief the penalties for the program were
not good enough and that most people work because they need the money.
Senator Kennedy referred to Illustration # 5 and asked how the TANF estimated rate for
1997 was arrived at. Ms. Evans explained the number, 23,085, was an estimate based on
historic data. Ms. Evans informed the Committee that 7/ 96 data showed that 62,000
families were receiving AFDC and the average amount per household was $ 295.
Ms. Evans referred to Illustrations # 8 and # 9, informing the Committee the categories of
exemptions would count in the work rate.
Geraldine Tebo, Project Control Manager, DES, explained the JOBSTART program was
intended by the Legislature to determine the effects of replacing welfare benefits with
guaranteed paid employment to reduce the need for and dependence on the welfare
system in addition to facilitating the transition from welfare to employment. Senator
Kennedy asked where the pilot projects were. Ms. Tebo stated the first pilot was in Pinal
County and the second was in the East valley area. She added the numbers of employers
and employees in Pinal County were too small to draw in an adequate number of
participants. Senator Kennedy expressed her displeasure with the second pilot project in
the East valley being chosen.
Ms. Tebo explained the project features a diversion of benefits to employers and that
placements are coordinated with an employability plan agreement. There is a job mentor
for each participant and no displacement of existing workers. Participants benefit from the
program since there is a support system in place, child care is arranged and skills are
learned. The program benefits the employer in that he has training costs offset, he is
dealing with prescreened candidates and is reimbursed for a percentage of the employee's
wages. Senator Patterson asked if the employer can use the money from DES to offset
the employee's salary. Ms. Tebo answered affirmatively. Senator Patterson asked what
happens to those who don't show up for work. Ms. Tebo explained there is a reduction in
the benefit check.
Ms. Tebo referred to Illustration # lo, a chart showing the JOBSTART client flow for Pinal
County. Of the 645 selected for the program, only 21 went into the JOBSTART
experimentation. She reviewed the other figures on the chart and informed the Committee
of a case in which a woman with no work history was assisted by the program in securing
employment at an auto parts store. Representative Anderson asked what participants
October 22, 1996
Page 9
were doing before securing employment. Ms. Tebo explained that training for job
interviews and other preparation involved in learning how to look for work were a couple
of areas in which participants could receive assistance.
Senator Patterson said it was his opinion that the program needs work, and asked if the
availability of employers or employees is a limiting factor. Ms. Tebo said the availability of
work in certain communities was a factoi and that it would benefit the state to encourage
job creation in communities where work is needed. Senator Patterson asked if those who
work continue to receive AFDC benefits. Ms. Tebo explained the eligibility for AFDC is part
of the criteria for participating in the JOBS program.
Ms. Evans returned to explain to remain eligible, the money from DES is diverted to the
employer. The employee must remain income eligible.
Senator Patterson referred to Illustration # lo, noting that out of the 645 selected for referral
only 21 received jobs and said it was his contention there are too many exceptions in the
program and weak sanctions for those who decide not to participate. He added the
program is badly flawed and that he would like to see the Committee in future meetings
tackle this problem. Representative Allen agreed changes would need to be made.
Ms. Tebo said she would provide numbers to the Committee of those who found
unsubsidized employment. Senator Patterson said he was interested in those numbers.
Representative Anderson asked about privatization. Ms. Evans referred the Committee
to Illustration # 3 and noted many services are contracted directly with providers.
Representative Allen said she would be interested in seeing a list of private providers.
Representative Anderson asked how many people went through the " Job Readiness"
program. Ms. Evans said the number was 10,449 at a cost of approximately $ 1 million;
one of the lowest costing contracts in the program.
Without objection, the meeting was adjourned at 10: 55 a. m.
Respectfully submitted,
" 1
Arlene Seagraves, ~ ommi$ ee Secretary
( Tapes on file in the Office of the Secretary of the Senate)
Minutes of
JOINT INTERIM STUDY COMMllTEE ON BLOCK GRANTS
Thursday, October 31, 1996
Senate Hearing Room 1 - 8: 30 a. m.
Cochair Gary Richardson called the meeting to order at 8: 40 a. m. and attendance was
noted. See attached sheet for other attendees.
Senator Patterson
Representative Anderson
Senator Richardson, Cochair
Representative Allen, Cochair
Mimi Leonard, Senate
Senator Kennedy
Representative McLendon
Senator Richardson said he appreciated everyone's faithful attendance to the Block Grant
Committee meetings and emphasized the importance of addressing the issues " right the
first time." He added it was gratifying that those in the audience placed the same
importance on block grants as the Committee.
Senator Richardson announced Senator Kennedy and Representative McLendon were
EXCUSED from today's meeting and that Senator Patterson was on his way.
Mimi Leonard, Senate Research Analyst, reviewed some of the questions asked at the
last Block Grants Study Committee meeting and informed the Committee of her findings.
1. $ 50 million additional appropriation for abstinence education: Ms. Leonard
distributed a copy of the section of P. L. 104- 193, 912 which creates a separate program
for abstinence education which was added to Title 5. Representative Anderson asked who
was allowed to come up with a plan in order to secure the money. Ms. Leonard explained
the funds would come through the Department of Health Services ( DHS) and that various
options had been discussed in the Teen Pregnancy Prevention Committee.
2. Social Services Block Grant: Ms. Leonard reviewed for the Committee what she
had reported at the last Block Grants Committee meeting; i. e., that there was a 15%
across- the- board cut by the Federal Government. She clarified that the actual cut made
October 3 1, 1996
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Minutes of the Joint Interim Study Committee on
Block Grants
was approximately 10.7%, NOT 15%. Senator Richardson expressed his pleasure at that
3. Citizenship testing: Ms. Leonard explained citizenship status is not required in
Federal regulations for participation of children in nutrition programs; however, welfare
reform changes do provide for the option of asking for proof of citizenship when application
is made for benefits. She referred to a handout ( filed with original minutes) which states
under Section 742 that individuals who are eligible to receive public school education
benefits under State or local law are eligible to receive benefrts under the National School
Lunch Program and the School Breakfast Program and that states also have the option of
deciding whether benefits under the Child and Adult Food Care Program, the Summer
Food Service Program, the Special Milk Program, Women, Infants and Children Program,
the Commodity Supplemental Food Program, the Temporary Emergency Food Assistance
Program and Food Distribution Programs on Indian Reservations. She added another
Legislative Committee is looking at these changes as they would pertain to Block Grants
and Governor Wilson of California is also pursuing the issue of authority by the states as
it relates to the above listed programs. Senator Richardson asked who- administers the
programs Ms. Leonard listed. Ms. Leonard explained the first five listed are administered
by the Department of Education ( DOE) and the last 3 are administered by the Department
of Economic Security ( DES).
Representative Allen asked what Committee was studying the programs further. Ms.
Leonard revealed the Joint Legislative Committee on Hunger had examined the issues
during a recent meeting and that she would provide an update on their recommendations
to the Committee.
Ms. Leonard also clarified an additional question on eligibility from the last meeting, noting
that residency must be documented but that one did not have to be a citizen to be on Aid
to Families with Dependant Children ( AFDC). Senator Richardson asked if everyone who
applies for AFDC is asked that question. Ms. Leonard said she would have to defer that
question to DES and that she had spoken with the United States Department of Agriculture
and that there appears to be nothing written on who can make a decision whether or not
to inquire about citizenship.
Lynne Dulin, representing the Department of Education ( DOE), informed the
Committee it was Superintendent Lisa Keegan's position that benefits should be provided
to all children. Representative Allen asked what the Governor's position was. Ms. Dulin
explained she was unaware of Governor Symington's position. Representative Allen said
she believed the Governor and Superintendent Keegan's positions were the same.
Mminutes of the Joint Interim Study Committee on
Block Grants
October 3 1, 1996
Page 3
Stefan Shepherd, Joint Legislative Budget Committee ( JLBC) Analyst, reviewed the
information packet distributed to the Committee members ( filed with original minutes) and
informed the Committee there are four types of providers reimbursed that serve Child Care
Administration ( CCA) Clients: Child Care Centers which can be public, private non- profit
and private for profit; private child care homes; private child care group homes; and
relatives. These providers are certified by DES. Mr. Shepherd reviewed the " Client
Demographics" for August 1996 and noted that 80% of families served were below 100%
of the poverty level and that 70% of the dollars spent must be spent on those meeting
welfare reform requirements. He further reviewed the Estimated Administrative Costs for
State Fiscal Year ( SFY) 1997 which consists of directladministrative services, all other
administrative costs, other costs not considered administrative and the " set aside" money
that is to be used for statewide resource and referral, child care for special populations,
expanding the supply of child care and training child care providers.
Dr. Linda Blessing, Director, DES, informed the Committee child care is one of the most
important factors to parents who are trying to become employed and that national studies
show affordable child care to be a critical issue to those seeking employment. She noted
DES had done a good job providing for approximately 30,000 children monthly within the
State which figures out to approximately 4,500 providers in the system. She told the
Committee Workina Mother Maaazine said Arizona had made impressive strides in child
care. She advocated a voucher- like approach for child care and informed the Committee
DES does not run child care centers in Arizona. Dr. Blessing said she welcomed the
opportunity to consolidate programs and to working with the Committee to make sure all
goals are met.
Bruce Liggett, Bureau Chief, DES, distributed a handout to the Committee entitled
" Overview of Child Care Programs" ( filed with original minutes) and informed the members
DES provides child care assistance for low income families to allow them to work,
participate in training or education, search for work and also for families unable to care for
their children or involved with Child Protective Services ( CPS) or foster care. Mr. Liggett
explained families are able to access child care directly or via referrals and eligibility is
determined based on income, family size or program category. He stressed that parents
choose the child care provider who is notified of the authorized amount and the specific
amount of care is authorized by DES based on parent activity. The provider establishes
its charges for care and is notified of the authorized amount. Providers are also
reimbursed based on established rates and usage. In addition, parents may change
providers at any time. Senator Richardson commented on the " user friendly" system
provided by DES and asked if there had been any complaints from users of the system.
Mr. Liggett said he had heard of no complaints from parents using the system and that
clients rated the system very highly in its evaluations. Senator Richardson asked if parents
October 3 1, 1996
Page 4
Minutes of the Joint Interim Study Committee on
Block Grants
could choose an unregistered provider. Mr. Liggett explained that day care centers must
be licensed in order to receive payment and that homes caring for four or less children
must be certified.
Representative Anderson asked if any of the day care providers were run by churches.
Mr. Liggett said some were.
Mr. Liggett continued with his presentation by explaining the demographics of families and
children served by the program in State Fiscal Year ( SFY) 1996. Mr. Liggett reported 85%
of the families served had a single parent and 71% of the children were under school age.
Approximately 30,000 children are served monthly and the total served in SFY 1996 was
Mr. Liggett explained page 3 of the handout listed the types of child care programs that are
currently paid for by DES and have been in existence since the 1970s when a state
subsidy program was created for day care. Senator Richardson asked if any of the
programs require a co- payment. Mr. Liggett explained that all of them do except for those
under AFDC. He continued by referring the Committee to page 4 of the handout which
designates income eligibility by program, criteria for applying, and the maximum monthly
income allowed. Representative Anderson asked if there was a waiting list for the AFDC
program. Mr. Liggett said there was and that over 1,000 families with a total of 1,800
children were on that list.
Mr. Liggett told the Committee that the pie chart on page 6 of the handout gave a
breakdown of families served by income category as of August 1996 and that page 6 gave
a comparison of payment rates for full- time and part- time day care. He informed the
Committee that payment rates are determined every two years through a geographic
survey done by both the Federal and State governments. There are seven fee levels
within the State system and parents pay varying rates for day care under those programs.
Mr. Liggett informed the Committee there are 1,058 centers currently under the DES child
care administration system. Of that number, 84% - 86% do business with DES. Those
centers serve 80% of the children in the system and the other 20% are taken care of by
relatives who are an option only under the Federal program. The chart on page 8 lists the
percentage of child care dollars and to what types of providers those dollars are paid.
Mr. Liggett told the Committee the Child Care and Development Block Grant Amendments
of 1996 establishes three funding streams: mandatory, mandatory matching and
discretionary which is effective October 1, 1996. There is only one program which
consolidates all the past child care programs into one. An interim application was
approved and Mr. Liggett reviewed the major new provisions of the program which include
the following:
Minutes of the Joint Interim Study Committee on
Block Grants
October 3 1, 1996
Page 5
1) Removes the child care entitlement for AFDC- employed, JOBS, At- Risk, TCC and
TCC Extension.
2) 70% of mandatory funds must be used to provide child care assistance to families
who are receiving assistance under Temporary Assistance to Needy Families ( TANF),
families who transition off of such assistance, and families who are at risk of becoming
dependent on assistance.
3) A substantial portion of the remaining funds must be available to provide assistance
to low- income working families.
4) The payment rates must be sufficient to ensure equal access for eligible children to
comparable child care services and the State must provide a summary of facts relied on
to determine that such rates are sufficient to ensure equal access.
5) Not less than four per cent of the funds must be used for comprehensive consumer
education, activities that increase parental choice, and activities designed to improve the
quality and availability of child care such as resource and referral services.
6) Not more than five per cent may be expended for administrative costs which shall
not include the costs of providing direct services.
7) There are new reporting requirements that have been imposed and include the cost
of care and sources of family income including:
* The amount obtained from employment, including self- employment
cash assistance or other assistance under IV- A
* housing assistance
food stamps
other public assistance
Finally, Mr. Liggett referred the Committee to the pie chart on page 10 of the handout
which is an expenditure plan for SFY 1997. Approximately $ 5.4 million is set aside, $ 5.5
million is for direct service, $ 1.9 million is for administrative costs and $ 67.4 million is for
client subsidies.
Senator Patterson asked how long a family was allowed to be on transitional child care
once the parent has found employment. Mr. Liggett said the family was allowed 24 months
of transitional child care. Senator Patterson asked if there was a Federal requirement that
the State would have to continue that transition and asked if the whole program could be
made one that is a cost sharing program. Mr. Liggett said the program could be simplified
October 3 1, 1996
Page 6
Minutes of the Joint Interim Study Committee on
Block Grants
but that caution should be exercised regarding educational requirements found in the
Federal legislation.
Vince Wood, Division Chief, DES, gave a brief presentation on the diversion option within
the program, focusing on citizensGp and the screening process for benefits. An applicant
must provide proof of citizenship or legal residence and the Systematic Alien Verification
System allows DES to dial into INS computer files. The computer system classifies
persons as " citizens" or " noncitizens," not " legal" or " illegal." lllegals are not counted in
determining the amount of funding received from the Federal government. He informed
the Committee DES had in the past cooperated with the Social Security Administration in
order to study alleged fraud and it was found that there were actually lower fraud rates in
that town than in others studied. He added that additional fraud was uncovered when 77
individuals were identified who were employed in Nevada but were collecting benefits in
Arizona. He agreed it was necessary to find new ways to combat fraud in Arizona.
Mr. Wood commented on S. B. 1399 from 1996, noting that DES applied for Federal
waivers which were now unnecessary in light of recent Federal legislation. Further studies
were needed regarding food stamps and continued medical assistance and that
information on those items would probably not be forthcoming until after the election. He
noted language in the Federal bill would impact the! required work participation rate . He
encouraged the Committee to discuss DES concerns with the Congressional delegation
for a technical amendment in order to make sure TANF numbers are figured into the
denommator. He also informed the Committee the effective date was six months after the
waiver was granted and that the diversion option will be imposed six months after the
waivers. Senator Patterson asked what happens presently if somehe comes in to file for
benefits. Mr. Wood explained that anyone who comes in has a right to file an application
and are asked if they are currently employed and what their income is.
Karen Novachek, Program Administrator, DES, explained the Emergency Assistance
Program is a matching program for families with children in crisis situations. The primary
areas of service are to those families who are homeless or victims of domestic violence.
Ms. Novachek referred the Committee to a document entitled " Emergency Assistance to
Families" which is administered by the Community Services Administration ( filed with
original minutes) and gives a breakdown of funding sources and the amounts, services
offered and the amounts, and the cost of administering the program. She explained DES
is authorized to adminster the program; however, they do not operate it directly.
Minutes of the Joint Interim Study Committee on
Block Grants
October 3 1, 1996
Page 7
Ms. Novachek distributed a second handout ( filed with original minutes) to the Committee
listing the emergency assistance providers by district and the amount of money each
provider receives. There is a total of 46 agencies providing services, 15 of them run by
local governments with 83% being nonprofit agencies. She noted the use of local
agencies gives the program a better coordinated approach to the needs of the community.
Ms. Novachek reported that TANF will impact the Emergency Assistance Program since
it is short term crisis assistance by nature so there are barriers within the new Federal
guidelines. One option is to operate under the new TANF guidelines which would require
tracking the recipient of benefits for five years after that person received emergency
assistance and the second option is to operate as a state- only program. Ms. Novachek
pointed out to the Committee DES had been in the communities to get input from those
affected on the changes to the welfare system.
~ e~ resdntativAell. e n asked for clarification on the Syear tracking. Ms. Novachek
explained if TANF dollars are used, then all requirements of TANF apply although there are
some exemptions including cases of domestic violence. She added she would prefer that
community agencies continue to be used but that the tracking requirements would be a
concern. Representative Allen noted the Legislature would have to establish some sort
of tracking system and added her concern with continuing to utilize community based
services rather than DES offices.
Senator Richardson asked how the community agencies are funded. Ms. Novachek
explained a proposal is submitted by the agency and a contract for services is negotiated.
Payment is reimbursed when a claim is submitted. The program is a voucher program and
payments are not made directly to the client. Senator Richardson asked how the program
could work under TANF guidelines. Ms. Novachek said the issue was still being studied
and that recommendations were being formulated.
Mike Koppleman, Deputy Director, DES, explained the Social Services Block Grant was
not part of TANF and that the types of services being provided are case management,
foster care, residential treatment, and other programs serving youth, adults, the elderly,
and those with developmental disabilities. The block grant has eliminated the match
requirement and local planning organizations solicit proposals and tell DES how to
distribute the money.
Mr. Koppleman referred the Committee to a handout ( filed with original minutes) entitled
" Arizona's Social Services Block Grant Program" and explained that while the Federal
regulations do not define administrative costs, DES has identified them to include direct
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