GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	1 

SENATE BILL 35*

Short Title:  1995 Welfare Reform.	(Public)

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Sponsors: Senators Martin of Guilford, Dannelly, Kerr, Warren; Perdue, Albertson, Speed, Edwards, Parnell, Winner, Odom, Rand, Plyler, Cooper, Gulley, Lucas, and Plexico.

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Referred to:  Children and Human Resources.

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January 26, 1995

A BILL TO BE ENTITLED
AN ACT TO ESTABLISH THE 1995 NORTH CAROLINA WELFARE REFORM ACT.
The General Assembly of North Carolina enacts:
Section 1.  Article 2 of Chapter 108A of the General Statutes is amended by adding a new Part to read:
"Part 1A.  The 1995 North Carolina Welfare Reform Act.
"§ 108A-26.10.  Goal of Welfare Reform.
Welfare Reform should aim at moving people permanently from the welfare dependency cycle to work and self-sufficiency.  In so doing, it should treat all people fairly and promote individual and family responsibility, family stability, dignity, and self-respect.  It should focus on the well-being and development of children into self-sufficient adults and should be administered in a fiscally responsible manner.  The agreement should also recognize that some people are not capable of total, permanent self-sufficiency but may be moved toward relatively independent living.
"§ 108A-26.11.  Methodology of Welfare Reform; agreement between recipient and service provider; agreement specifics.  
(a)	The Department of Human Resources shall ensure that every family receiving assistance shall participate in forming, and shall formally consent to, an agreement with the State and with the local social services agency, with the local agency acting for the State.  This agreement shall specify all services and benefits to be provided the family to facilitate moving the family to permanent self-sufficiency.  If the director of the local social services agency determines that the recipient is not capable of eventual total, permanent self-sufficiency, the agreement shall specify how the recipient may be advanced toward relatively independent living.  The agreement shall, further, contain all other conditions, such as benefits limitations and any sanctions that shall be imposed for noncompliance.  In developing the agreement, the local agency and the family shall focus on the family. The Department shall ensure that all agreement provisions required of all recipients in this Part are enforced and that all agreement provision of services and programs are provided by the appropriate State or local agency.
(b)	All agreements shall include requirements for work, job training, and education, if needed.  Specific provisions that shall be available for all families if they are needed include work/training requirements and child care and specific limitations and sanctions.  The local social services agency may tailor other services, benefits, and sanctions for each family in a way best suited to achieve the goal of permanent self-sufficiency.  All locally tailored limits and sanctions shall be set and applied in a manner consistent with equal protection across localities, due process, and general equity.
(c)	If an agreement has not been entered into and signed by the recipient within 12 weeks of the recipient's application for assistance, the local social services agency shall terminate all benefits unless the caseworker and director determine that extenuating circumstances exist that warrant this delay.  In no event shall this extension extend for longer than four additional weeks.
If the appropriate caseworker and director of the local social services agency determines that a recipient willfully fails to comply with  the signed agreement after this agreement has been in effect for at least three months, the local social services agency shall terminate all the recipient's benefits.  If the recipient has failed to comply with the agreement because specified services to be provided by the local social services agency or the State were not available or were not accessible, the recipient's benefits shall not be terminated.
The Department of Human Resources shall ensure that all the recipient's appropriate due process requirements are met in regard to termination of benefits ensuing under this subsection.
(d)	All agreements shall contain the following specifics:
(1)	LIMITED BENEFITS FOR MINOR PARENTS
	AFDC and housing benefits for minor unmarried parents shall not be available to those who are not living with their parents or guardians unless there is reasonable concern that abuse to them or their children will result as a consequence of living with the parents or guardians, including reasonable suspicion that incest has occurred while living with parents or guardians.  The agreement shall contain provision for educational services, adolescent parenting programs, and very close monitoring by the social services caseworker, participation in available programs that are like the adolescent pregnancy prevention program and the independent living program models that focus on the prevention of subsequent out-of-wedlock pregnancies, and involvement of the father through counseling and guidance.
		The Department of Human Resources shall not allow unemancipated minors to receive AFDC checks directly unless (i) the caseworker determines that the minor is in a separate household from parent or guardian for reasons of health, safety, or being forced out of the parent's or guardian's home, or (ii) federal law or regulation, such as HUD occupancy levels in public housing, prohibit these constraints.  The caseworker's determination shall be reviewed by the supervisor and by the director of social services before the minor may receive a check.
(2)	FAMILY CAP LIMITS/BIRTH CONTROL COUNSELING AND AVAILABILITY
a.	The Department of Human Resources shall ensure that increases in assistance other than general increases provided to all recipients are not provided to a recipient family for any additional dependent child conceived while the family is receiving assistance.  
		These limits shall not apply if the birth of the additional dependent child results from rape or incest, when these offenses were duly reported to the appropriate law enforcement agency, or from failure of a birth control device the use of which is medically verifiable, such as an interuterine device (IUD), Norplant, or sterilization.
b.	Any dependent infant remains a dependent for purposes of this Article and remains eligible for all assistance for which it is eligible.
c.	The Department shall ensure that a family who discontinues receiving assistance for any reason and who subsequently reapplies for assistance shall not have included any more children in the family size for the purpose of determining the amount of assistance than were included in the family size at the time the assistance was discontinued, unless the family did not receive assistance for 24 months or more.
		These limits shall not apply if the birth of the additional dependent child results from rape or incest when these offenses were duly reported to the appropriate law enforcement agency or from failure of a birth control device the use of which is medically verifiable, such as an IUD, Norplant, or sterilization.
d.	The Department of Human Resources shall cooperate with the Department of Environment, Health, and Natural Resources to ensure that, when their eligibility for assistance is determined, the parent and dependent teenaged child shall be given the opportunity to choose an appropriate method of birth control and advised of each of the methods' contraindications, potential side effects, and effective rates.
		The parent and dependent child shall also be advised on the prevention of sexually transmitted diseases.
		The dependent teenaged child may give consent for medical health services for the prevention of pregnancy pursuant to G.S. 90-21.5.
e.	The Department of Human Resources shall cooperate with the Department of Environment, Health, and Natural Resources to ensure that all appropriate forms of birth control are available at no charge to any parent of a recipient family, whether male or female, and to any dependent teenaged child.  If a family contains both a male and a female parent, the Department shall ensure that both parents receive the opportunity to choose a method of birth control pursuant to this paragraph.
f.	The parent and dependent teenaged child shall sign a statement that the  effective rate, the contraindications, and the potential side effects of all the birth control methods were understood, and that they were advised of the prevention of sexually transmitted diseases.  The Department of Human Resources shall cooperate with the Department of Environment, Health, and Natural Resources to ensure that this paragraph is effected.
g.	The Department of Human Resources shall cooperate with the Department of Environment, Health, and Natural Resources to ensure that families already receiving assistance as of the effective date of this subdivision receive the birth control opportunities and advice on the prevention of sexually transmitted diseases required by this  subdivision within six months of this date, except that families already receiving assistance by this date who contain a parent or a teenaged dependent child who is pregnant as of this date shall be given the birth control opportunities and advice on the prevention of sexually transmitted diseases required by this section within one month of the baby's birth.
(3)	OVERALL BENEFITS LIMITS
a.	All public assistance benefits shall be limited to four years, including education and job training, except as provided in paragraph b. of this subdivision.  The agreement shall specify how long any benefit shall be available, not to exceed four years.
b.	The General Assembly finds that there should be a high level of flexibility on the part of the local social services agency in moving the recipient family toward permanent self-sufficiency.  Therefore, if the local social services agency determines that the recipient is making significant and documented progress toward self-sufficiency, and that there are unusual circumstances that warrant an extension of benefits for up to an additional 12 months, and if the Division of Social Services, Department of Human Resources, agrees with this determination,  this extension shall be allowed.
c.	Benefits for any dependent child shall not be terminated after four or five years pursuant to this subdivision if the child's parent fails to become able to care for the child within this period.
(4)	PATERNITY ESTABLISHMENT
a.	The local social services agency shall continue the practice of establishing paternity at birth through hospitals or as soon as feasible through acknowledgment or court action.
b.	The Department of Human Resources shall strengthen requirements that the local social services agency report paternity.
c.	Effective October 1, 1996, the Department of Human Resources and the Administrative Office of the Courts shall strengthen and streamline the process for establishing paternity through court action and establish a legal presumption favoring garnishment of wages after a certain set number of payments have been very late or have not been made.  The Department and the Administrative Office of the Courts shall cooperate on a study that will determine how best to accomplish this streamlining and garnishment presumption and to report the 1995 General Assembly by April 15, 1996, on its recommendations, including any recommended statutory changes.
		The Department shall ensure that, pursuant to G.S. 110-131, as amended, if a recipient mother who has given birth to an out-of-wedlock child has not cooperated in paternity establishment within three months of the child's birth, there will be no additional AFDC cash benefits continued for that child.  Even when the birth arose through rape or incest and these offenses were reported to the appropriate law enforcement agency, the same requirements apply, unless the local social services agency determines that the safety and well-being of the mother or the child would be jeopardized.  Any determination that the mother has not cooperated shall be reviewed by the caseworker's supervisor and by the director of social services.
(5)	EDUCATION
	The General Assembly finds that the likelihood of permanent self-sufficiency is minimized unless there is adequate education.  Therefore, all agreements shall require that all minors obtain a high school diploma or its equivalent, whether through regular schools, alternative schools, community colleges, or elsewhere.  If the local social services agency considers it necessary, the agreement may contain provision for a minor's further education.  The agreement may also contain provision for education for an adult.
(6)	WORK/TRAINING
	All agreements shall specify that all nonexempt family members shall work or be in a work-training program that is based on the local job market and is designed to move the family to permanent self-sufficiency.  Each agreement shall use community-based organizations as much as is reasonably possible in facilitating involvement and retention in the particular family's work-training program.  The local social services agency must involve the private sector in job location, and microenterprise alternatives shall be permitted if appropriate and agreed to.  The agreement shall specify that child day care and transportation shall be provided to enable the recipient to fulfill the requirements of this subdivision, if appropriate.
		In instances when work is unavailable, and the recipient is not otherwise exempt from the work requirement, the recipient shall work in appropriate public community service for at least 14 hours per week without compensation, subject to the availability of appropriate child day care, if needed.  The recipient shall be permitted, whether or not exempt from work requirements, if the local social services agency agrees to volunteer for uncompensated public community service work in excess of 14 hours per week.
(7)	EXEMPTIONS FROM WORK/JOBS REQUIREMENT
	The following individuals are exempt:
a.	Under age 16;
b	Age 16, 17, and a full-time student or to be a full time student in next school year;
c.	Age 18 and due to complete high school before age 19;
d.	Ill or disabled;
e.	Age 60 or older;
f.	Required to travel more than two hours round-trip for a normal work or training day;
g.	Needed in home to care for someone ill or disabled who lives in the home;
h.	Working more than 30 hours per week;
i.	More than three months pregnant; and
j.	A parent caring for a child under three months of age.
	The agreement shall involve all exempt individuals, when appropriate, in the plan for moving the family toward permanent self-sufficiency.
		Exempt individuals can volunteer for programs otherwise required if the local social services agency considers it is in the best interest of moving the family toward permanent self-sufficiency.
(8) REMOVAL OF WORK DISINCENTIVES
a.	The General Assembly finds that a reliable vehicle is often a family necessity to fulfill the family's education, training, and work requirements.  The current one thousand five hundred dollar ($1,500) public assistance resource limit has been unchanged for a long period of time and is no longer sufficient.  Therefore, the Department of Human Resources shall raise the value of an allowed motor vehicle for purposes of AFDC and Food Stamp eligibility to no more than seven thousand five hundred dollars ($7,500).
b.	The Department of Human Resources shall raise AFDC and Food Stamp resource eligibility limits to three thousand dollars ($3,000), excluding the value of place of residence and of the allowed motor vehicle.
c.	The Department of Human Resources shall eliminate AFDC-UNEMPLOYED PARENT (AFDC-UP) disincentives by:
1.	Eliminating the '100-hour rule', which currently removes assistance from two-parent 'Unemployed parent' families in which the principal wage earner works 100 hours or more a month eliminating the 100-hour rule; and
2.	Eliminating the requirement of an unemployment history for two-parent 'Unemployed Parent' families, which currently requires that one parent shall have worked and earned at least fifty dollars ($50.00) in six of 13 calendar quarters prior to the date of application in order to receive assistance.
d.	The Department of Human Resources shall disregard all recipients' employment earnings for the  first three months.
		For the next nine months, the Department shall disregard the first two hundred dollars ($200.00) per month, plus one-third of the remainder, unless an Individual Development Account is used, as authorized by subdivision (5) of this subsection.  If a family has an Individual Development Account, after the first three months, the Department shall disregard the first two hundred dollars ($200.00) per month, plus one-half of the remainder, provided that amount that is the difference between the one-third of the remainder and the one-half of the remainder is placed in the Individual Development Account.
(9)	ADDITIONAL WORK INCENTIVES
a.	Individual Development Accounts (IDA):
		An IDA is a special bank account established pursuant to the agreement that shall be used only for the purchase of a home, acquisition of health or disability insurance, to obtain education or job training, or to develop a small business.  These limits on the use of the IDA funds continue after the recipient holding the account has left public assistance.   The Department of Human Resources shall cooperate with the State Banking Commission in establishing and administering these accounts to ensure that they are used only as prescribed in this subdivision.
		The agreement may allow that people already receiving assistance may retain financial assets not to exceed ten thousand dollars ($10,000) without losing eligibility for full benefits if these assets are placed in an IDA.
		A person may become eligible for public assistance even if that person has up to ten thousand dollars ($10,000) in assets if that person puts these assets in an IDA and if:
1.	The person has been employed for at least seven out of the last eight quarters prior to applying for and being approved to receive unemployment benefits; or
2.	The person is a displaced homemaker.
b.	1.	Increase transitional Medicaid and child care from 12 months to 18 months.
2.	The General Assembly shall consider creating Small Business/Child Care Alliances similar to Small Business Health Care Alliances.
3.	The General Assembly shall consider ways in which the Family Resource Center concept can be used in maximizing the positive impact of welfare reform, with particular emphasis on child care, parenting classes, family counseling, and service as a 'one-stop center' for accessing services.
4.	The General Assembly shall consider the feasibility of excluding income-producing property from eligibility limits for AFDC and Food Stamps, on analogy with the Medicaid and SSI exclusions.
(10)	GENERAL SANCTIONS FOR NONCOMPLIANCE
	The General Assembly shall set and the Department of Human Resources shall ensure that all sanctions are applied in a manner consistent with constitutional due process, equal protection, and general equity.  Within these constraints, reasonable latitude and flexibility shall be available to local service agencies to address circumstances specific to their localities.
(11)	FRAUD PREVENTION INITIATIVES
a.	The Department of Human Resources shall take advantage of all federal AFDC and Food Stamp fraud prevention programs and federal dollars, including the AFDC Fraud Control Plan.
b.	The State shall allow for income tax intercept for claims classified as Food Stamp Inadvertent Household Errors.
c.	The Department of Human Resources shall not allow unemancipated minors to receive AFDC checks directly unless (i) the caseworker determines that the minor is in a separate household from parent or guardian for reasons of health, safety, or being forced out of the parent's or guardian's home, or (ii) federal law or regulation, such as HUD occupancy levels in public housing, prohibit these constraints.  The caseworker's determination shall be reviewed by the supervisor and by the director of social services before the minor may receive a check.
d.	The Department of Human Resources shall not allow food stamps to be issued to separate related family subunits all living within one residence unless the caseworker determines that failure to do so would significantly extend the time the family would remain in welfare dependency rather than moving toward self-sufficiency. The caseworker's determination shall be reviewed by the supervisor and by the director of social services before any related subunits may receive food stamps.
e.	The General Assembly shall determine how best the State may ensure that SSI benefits paid for disabled children are not abused but are used for their proper purposes, shall enact any legislation necessary, and, notwithstanding any rule to the contrary, shall memorialize Congress, if necessary, to regulate the payments of these benefits in a better manner.
"§ 108A-26.12.  Systemic changes needed to effect Welfare Reform; technology utilization and streamlining; movement toward local case management delivery system; General Assembly intent to aid in retraining assistance and support to local social services agencies; N.C. CAN; electronic benefits transfers.
(a)	SIMPLIFICATION AND COORDINATION
The Department of Human Resources shall ensure the reduction of duplication and other inefficiencies in the application and other processes of public assistance delivery.   The Department shall provide better exchange of information, better service delivery and paperwork reduction within local social services agencies, related agencies, and with the State.   The Department shall encourage movement of local social services agencies toward a case management system of service delivery in order to reduce the number of personnel working with one family.  To encourage local social services agencies in these directions, the General Assembly intends to provide retraining assistance and support for local personnel to enable them to work effectively within a case management system.
(b)	N.C. CAN
The Department of Human Resources shall institute phase one of N.C. CAN to effect technology utilization and streamlining.  N.C. CAN is a collaboration between the Department of Human Resources and counties that seeks an integrated information environment that will allow families and children to be served holistically.  A comprehensive information model will be developed that reflects the business and information requirements for human services delivery.  This model will become the blueprint for the modular design and implementation of a flexible automated system that will meet all objectives for an improved human services delivery system.
  The anticipated outcomes of N.C. CAN include simplification, 'one-stop-shopping' for families being served, less staff involved in the eligibility determination process, improved services for families, and improved information for line workers and management.  The following are some of the goals to be accomplished with N.C. CAN:
(1)	Simplify fundamentally and improve interaction with clients and families;
(2)	Ensure quality improvement of services;
(3)	Promote communication among agencies;
(4)	Define human services processes;
(5)	Examine how human services are delivered;
(6)	Integrate both manual and automated processes; and
(7)	Reengineer existing human services systems.
(c)	ELECTRONIC BENEFITS TRANSFER
The Department of Human Resources shall institute electronic benefits transfer.
"§ 108A-26.13.  Performance audit of benefits and service delivery programs.
The State Auditor shall conduct a performance audit of all programs related to the administration or delivery of benefits and services to public assistance recipients.  This audit shall include all State agencies, departments, divisions, and offices that play a direct role in the delivery or administration of benefits and services.  The General Assembly intends to appropriate sufficient funds to the State Auditor for this purpose.  These funds may be used to obtain consultants with needed areas of expertise, and time-limited employees, when needed, to perform this audit.  The audit shall include an examination of the following:
(1)	Ways to reduce paperwork;
(2)	Duplication of tasks; programs, and services;
(3)	Efficiency of program administration, including overlapping responsibilities and layering of management;
(4)	Level of consistency in goals, management operations, and implementation strategies;
(5)	Adequacy of personnel training and continuing education, placing particular emphasis on consistency with collaborative and case management concepts;
(6)	Potential efficiency gains through consolidation of functions within agencies or even across agency lines;
(7)	Examination of the State-local relationships with regard to personnel, funding, training, and overall service delivery and administration;
(8)	Collaboration, cooperation, and coordination between departments, agencies, and levels of government;
(9)	Contracting and consulting practices; and
(10)	Use of local nongovernmental community organizations and institutions of higher education in service delivery on a voluntary basis and through small grants or contracts.
The audit shall also include any other issues relating to welfare reform that the State Auditor considers necessary or advisable.
All State and local agencies and officials shall cooperate fully with the Office of the State Auditor in its performance of this audit.  This cooperation includes, but is not limited to, providing ready and complete access to all materials, including those in draft form and those that may contain confidential, proprietary, or similar information.   The General Assembly intends that the Office of the State Auditor have full and complete independence in conducting this study in accordance with G.S. 147-64.8 and all other applicable general statutes and session laws.
"§ 108A-26.14.  Ongoing program evaluation for purposes of assessing performance.
The General Assembly shall establish a task force for the single purpose of providing ongoing program evaluation as welfare reform progresses in North Carolina in order to assess performance of all involved agencies.  The task force shall continue until terminated by the General Assembly.
"§ 108A-26.15.  State government participation in Welfare Reform.
  All State agencies, including the Department of Human Resources, the Department of Commerce, the Employment Security Commission, the Housing Finance Agency, the Department of Community Colleges, the Department of Public Instruction, the Department of Environment, Health, and Natural Resources, and the Rural Economic Development Commission, that provide programs or services that are used by public assistance recipients shall ensure that these programs and services are provided in such a way as to effect welfare reform as provided in this Part, and that their goals are harmonious with welfare reform's goals of moving families toward permanent self-sufficiency.
The Department of Commerce shall, in particular, conduct all its economic development efforts in a manner that pays particular attention to issues of welfare reform.
The Employment Security Commission shall expand its role in job training and location as the General Assembly determines, upon consideration of the recommendations of the Governor's Task Force on Welfare Reform on this issue.
The Department of Correction shall conduct an internal study of its education and training programs to determine how best to redirect these programs to enable and encourage inmates to be responsible family members while incarcerated and to participate in their families' movement toward permanent self-sufficiency when they return to their communities.
The State agencies shall report their compliance with this subsection to the 1995 General Assembly by April 15, 1996.
"§ 108A-26.16.  Part 1A controls over other law and rule.
Any law or rule in conflict with this Part is superseded by this Part."
Sec. 2.  G.S. 110-131 reads as rewritten:
"§ 110-131.  Compelling disclosure of information respecting the nonsupporting responsible parent of a child receiving public assistance; failure to cooperate.
(a)	If a parent of any dependent child receiving public assistance fails or refuses to cooperate with the county in locating and securing support from a nonsupporting responsible parent, this parent may be cited to appear before any judge of the district court and compelled to disclose this information under oath.  If the parent has not cooperated within three months of the child's birth, that parent shall be declared ineligible for any additional cash AFDC assistance for that child even if the birth arose through rape or incest and these offenses were reported to the appropriate law enforcement agency, unless the local department of social services determines that the safety and well-being of the parent or the child would be jeopardized by cooperation.  Any determination that the parent has not cooperated shall be reviewed by the caseworker's supervisor and by the director of the local department of social services.  Any social services worker making the determination that the birth arose through rape or incest shall follow all applicable law in ensuring that these crimes are prosecuted.
(b)	Any parent who, having been cited to appear before a judge of the district court pursuant to subsection (a), fails or refuses to appear or fails or refuses to provide the information requested may be found to be in contempt of court and may be fined not more than one hundred dollars ($100.00) or imprisoned not more than six months or both.
	."
Sec. 3.  G.S. 105A-2(1)r. reads as rewritten:
"r.	The North Carolina Department of Human Resources when in the performance of its collection duties for intentional program violations and violations due to inadvertent household error under the Food Stamp Program enabled by Chapter 108A, Article 2, Part 5, and any county operating the same Program at the local level, when and only to the extent such a county is in the performance of Food Stamp Program violation collection functions."
Sec. 4.  (a)	The General Assembly establishes a Child and Family Services Interagency Council to focus on the need to ensure smooth, rational, efficient coordination of efforts across agency, departmental, and division lines throughout the entire, long-range process of welfare reform.  This Council will continue until terminated by the General Assembly.
(b)	The General Assembly reestablishes the Legislative Study Commission on Welfare Reform to continue the work begun by the Commission established by Section 47 of Chapter 24 of the 1993 Session Laws, Extra Session 1994.
Sec. 5.  The Department of Human Resources shall apply for all necessary waivers required by Sections 1 and 2 of this act from the federal government immediately as of the effective date of this section.  If the federal government denies the waiver before the effective date of Sections 1 and 2 of this act or if the waiver has not been accepted by the effective date of these sections, these sections shall not become effective unless the General Assembly, in the next appropriations act passed after the denial, appropriates sufficient funds to make up for the loss of federal funds, in which case these sections shall become effective on the effective date of this appropriations act.  If the waiver is denied or has not been accepted by the effective date of these sections, funds appropriated by this act shall be held by the State Treasurer in a special fund, which shall be released as appropriated if the General Assembly does meet this condition.
Sec. 6.  Unless otherwise provided, except for, and subject to, the conditions set forth in Section 5 of this act, Sections 1 and 2 of this act become effective October 1, 1995.  Section 3 of this act is effective upon ratification.  Any limitation on services and benefits prescribed in Section 1 apply to agreements drawn up for applicants for public assistance applying on or after this date and apply to determinations or redeterminations of eligibility for benefits made on or after that date.  Section 2 applies to births occurring on or after this date.  Any appropriations made by this act become effective July 1, 1995.  Sections 5 and 6 of this act are effective upon ratification.