Authorizes the senate and house committees having jurisdiction over the budget, human services, and health to have joint legislative oversight responsibilities and to conduct oversight hearings on temporary assistance to needy families. (SD2)

A BILL FOR AN ACT

SECTION 1. The legislature finds that Hawaii, like other states, now receives limited federal temporary assistance for needy families moneys to replace the previously open-ended categorical need system of welfare. However, many administrative decisions and actions are required to optimize the use of these funds.

For example, to maintain maximum flexibility, states must obligate temporary assistance for needy families funds in the federal fiscal year they are received. However, if a state has an unobligated balance after October 1, it must spend the money on ongoing assistance such as cash, food, and housing. States obligating or transferring funds also may transfer up to thirty per cent of temporary assistance for needy families funds to the child care development block grant, the access to jobs program, and the social services block grant. The maximum amount that may be transferred to the Social Services Block Grant is ten per cent.

Temporary assistance for needy families funding is a result of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. States may need to set eligibility levels depending on which purpose the funds are to be used. For example, the four purposes of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 are:

A state wishing to address either or both of the first two objectives must set eligibility levels for as many different programs as it creates. Eligibility need not be the same for each program, nor does it need to have a direct correlation with temporary assistance for needy families eligibility. However, if a state's priorities are to address either or both of the last two objectives, a state need not set any eligibility levels, but may use federal temporary assistance for needy families funds to serve expanded populations without regard to income. Target populations could include teens, custodial parents, noncustodial parents, ex-welfare recipients, those who have transitioned off welfare, and those who have never been on welfare.

The legislature also finds that states need to carefully distinguish between providing "assistance" and "not assistance" under federal temporary assistance for needy families regulations. If a state uses temporary assistance for needy families moneys for payments to meet ongoing basic needs such as cash, food, or housing, the payments are considered "assistance" and federal requirements apply. These requirements include work participation rate requirements, time limits, child support assignment, and data collection. However, if temporary assistance for needy families moneys are used to pay for other services such as education, short-term assistance (non-recurring assistance of less than four months), and work subsidies, these payments are considered "not assistance" and are thus not subject to these federal requirements. This allows states to provide services to families not receiving cash support under the program.

States are also required to take certain actions under the rubric "maintenance of effort" to continue receiving temporary assistance for needy families moneys. This entails making further decisions, such as whether to commingle state funds with the federal temporary assistance for needy families moneys. If commingled, state funds are subject to federal temporary assistance for needy families rules. If segregated, funds are subject to temporary assistance for needy families requirements except time limits. Separate state programs using maintenance of effort dollars are not subject to federal time limits, work participation rates, child support assignment, or data collection requirements. If a state has a separate state program and wants to be eligible for a high performance bonus, receive work participation caseload reduction credit, or receive penalty relief, the state must collect data. A state can also use maintenance of effort moneys to fund medical assistance, including medication, health insurance, and medical treatment. However, if a state spends maintenance of effort funds in an existing program, it will be subject to a new spending test where the state can only count the amount it spends above what it spent in 1995 towards its maintenance of effort requirement. Furthermore, all maintenance of effort spending must coincide with temporary assistance for needy families eligibility.

States also need to check work participation requirements. As caseloads have declined, states received a caseload reduction credit, reducing the number of individuals a state needs to claim to meet work participation rates. This also means that a state needs to know it can spend seventy-five per cent, rather than eighty per cent of maintenance of effort moneys.

States are also required to report quarterly on the amount of money they spend. The legislature finds that these reports need to be carefully scrutinized to ensure that appropriated moneys do not go unspent. If a state fails to obligate money by October 1 of each year, the state loses flexibility. Thus, the legislature finds that the following are necessary:

Evaluations can provide the legislature with specific and accurate details concerning how welfare reform is working. It also affords a critical opportunity for mid-course correction by identifying unintended consequences, newly identified needs, and areas for expansion and innovation.

The purpose of this Act is to provide a mechanism for legislative oversight of the expenditure of temporary assistance for needy families funds and implementation of temporary assistance for needy families programs.

SECTION 2. Chapter 346, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§346-   Temporary assistance for needy families; funding and programs; legislative oversight. (a) The legislature may conduct oversight hearings relating to the appropriate implementation of programs funded by federal temporary assistance for needy families moneys and to the optimal expenditure of such federal moneys. The legislature shall determine the number and timing of hearings to be held; provided that no fewer than one hearing on each island of the State shall be held annually. The committees on ways and means, health, and human services of the senate and the committees on finance, health, and human services of the house of representatives shall have joint legislative oversight responsibilities.

(b) The department shall make all data available to the senate committees on ways and means, health, and human services and the house of representatives committees on finance, health, and human services upon request. The committees shall jointly evaluate the implementation of programs and fund expenditures under this section and make annual recommendations for appropriations."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.