Report Title:

TANF Funds; Legislative Oversight

Description:

Authorizes senate WAM and house FIN committees as joint legislative oversight committees to oversee and evaluate TANF program implementation and TANF fund expenditures.

HOUSE OF REPRESENTATIVES

H.B. NO.

1770

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to Legislative oversight of temporary assistance for needy families programs and funding expenditures.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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

For example, in order 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 like 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 4.25 per cent.

Temporary assistance for needy families funding is a result of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Depending on which of the four purposes of this federal legislation, states may need to set eligibility levels. For example, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996's four purposes are:

(1) Provide assistance to needy families;

(2) End dependence on welfare by promoting job preparation, work, and marriage for needy families;

(3) Prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and

(4) Encourage the formation and maintenance of two-parent families.

If a state wishes to address either or both of the first two objectives, it 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, like 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 a state uses temporary assistance for needy families moneys 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 temporary assistance for needy families.

States are also required to take certain actions under the rubric "maintenance of effort" in order to continue receiving temporary assistance for needy families moneys. This entails making further decisions, such as whether to commingle state funds with 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.

The legislature also finds that a state needs to check work participation requirements. As caseloads have declined, states received a caseload reduction credit, reducing the amount 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:

(1) Oversight over implementation of use of temporary assistance for needy families funds;

(2) Conducting oversight hearings; and

(3) Performing evaluations of temporary assistance for needy families program spending.

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 the implementation of temporary assistance for needy families programs.

SECTION 2. Act 200, Session Laws of Hawaii 2003, as amended by Act 41, Session Laws of Hawaii 2004, is amended by amending section 3F10 to read as follows:

"10. HMS201  -  TEMPORARY ASSISTANCE TO NEEDY FAMILIES

OPERATING HMS 17,699,544A 17,003,411A

HMS [55,842,104N] [50,220,369N]"

SECTION 3. 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 finds that the administration of programs funded by federal temporary assistance for needy families moneys and the expenditure of federal temporary assistance for needy families funds received by the State require legislative oversight in order to achieve appropriate program implementation and optimal program expenditures.

(b) The legislature shall conduct oversight hearings relating to the appropriate implementation of programs funded by federal temporary assistance for needy families moneys and 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        rounds of hearings on all islands of the State shall be held annually. The standing committee on ways and means of the senate and the standing committee on finance of the house of representatives shall have joint legislative oversight responsibilities.

(c) The department of human services shall make all data available to the joint legislative oversight committees upon request. The joint legislative oversight committees shall jointly evaluate the implementation of programs and fund expenditures under this section and make annual recommendations for appropriations."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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