GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	2 

SENATE BILL 35*
Children and Human Resources Committee Substitute Adopted 6/13/95

Short Title:  Partnership for Independence.	(Public)

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Sponsors:

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Referred to:  Appropriations

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January 26, 1995

A BILL TO BE ENTITLED
AN ACT TO ESTABLISH THE 1995 NORTH CAROLINA PARTNERSHIP FOR INDEPENDENCE 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 Partnership for Independence
Welfare Reform Act.
"§  108A-26.10.  Goal of Welfare Reform.
Welfare Reform should be focused on enabling families to move from the welfare dependency cycle to permanent work and economic self-sufficiency and on preventing them from developing an initial dependency.  The method for achieving this shall be the centering of all public assistance on work first for people needing assistance who are able to work or be prepared for work.  Welfare Reform should be designed to 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. Welfare Reform should also recognize that some people are not capable of total, permanent self-sufficiency but may be assisted in achieving relatively independent living.
"§ 108A-26.11.  Methodology of Welfare Reform; Work First establishment; diversion assistance; personal responsibility agreement between recipient and service provider; agreement specifics; self-sufficiency plan; Work First categories; agreement and plan specific requirements, sanctions, benefit limits, benefit specifics.
(a)	WORK FIRST PROGRAM.
The Department of Human Resources shall ensure that all AFDC assistance available under this Article is focused on enabling all recipients to work or to be assisted in preparing to work, unless exempt.
To this end, there is established the Work First Program, to serve as the umbrella program of all AFDC assistance under this Article.  The Work/Training component of the Work First Program, which shall consist of compensated work, uncompensated community service work, work training, and work education activities, shall replace the Job Opportunities and Basic Skills (JOBS)	program as it is currently structured under the federal Family Support Act of 1988.  All other job training and placement programs operated by the State or receiving State funding as of the effective date of the 1995 North Carolina Partnership for Independence Act shall be consolidated or coordinated with the Work/Training component of the Work First Program and shall fully cooperate in its implementation.
The Department of Human Resources shall consult with the Department of Labor, the Department of Commerce, the Employment Security Commission, the Department of Environment, Health, and Natural Resources, and any other State or local agency in order to focus all assistance to AFDC recipients under this Article on Work First.
AFDC recipients, who are enrolled in and have not completed their job preparation or training requirements under the JOBS Program at the time this section becomes effective, may have until July 1, 1996, to complete such job preparation and training requirements if the recipient chooses to complete the JOBS Program.  If the recipient opts to complete the JOBS Program, the recipient shall continue to receive all support provided under the JOBS Program until the job preparation and training requirements have been met or until July 1, 1996, whichever comes first.
(b)	DIVERSION ASSISTANCE.
The Department of Human Resources shall ensure that applicants who are determined eligible for AFDC assistance under this Article are offered diversion assistance.  A recipient of diversion assistance may receive a diversion payment equal to the maximum amount of the AFDC cash assistance the recipient would otherwise be eligible to receive for up to three times the monthly grant for the household size.  The actual amount of the diversion payment shall be based on the recipient's immediate needs and on the sum as negotiated by the caseworker and the recipient.  If the recipient reapplies for AFDC assistance within three months of receiving the diversion payment, the diversion payment shall be prorated over the three months and shall be subtracted from any AFDC grant the recipient is eligible to receive.
(c)	PERSONAL RESPONSIBILITY AGREEMENT.
The Department shall ensure that all recipients of any AFDC assistance under this Article, including the recipient who is the specified relative who is a parent, guardian, or custodian of a recipient, have participated in the formulation of and have signed personal responsibility agreements that set out what the recipients are expected to do to exercise the personal responsibility necessary to ensure that the Work First Program is effective in assisting the recipients to attain permanent self-sufficiency.  The signing of the personal responsibility agreement is a condition of eligibility for AFDC benefits under this Article.  New applicants for assistance shall have AFDC assistance denied to the family and Medicaid assistance denied to the specified relative if they fail to sign prior to receiving approval of assistance.  Recipients currently receiving assistance as of the effective date of the 1995 North Carolina Partnership for Independence Act shall sign these agreements no later than their first eligibility review after the effective date or have the family's AFDC assistance and the specified relative's Medicaid terminated.  All recipients' personal responsibility agreements shall:
(1)	Require that specified relatives agree to have their children receive all appropriate immunizations;
(2)	Require that specified relatives agree to have their children attend school as required by the Compulsory Attendance Law;
(3)	Require that teenaged specified relatives agree to attend school until they receive a high school diploma or equivalent, if appropriate, and to live with their parent or guardian, unless there is reasonable concern that abuse to them or their children will ensue as a consequence of their living with their parent or guardian.  This reasonable concern that abuse will ensue shall be justification for supervised living arrangements other than with the teenaged specified relative's parent or guardian.  For purposes of this Part, if there is reasonable suspicion that incest has occurred while living with a parent or guardian, reasonable concern that abuse will ensue is considered to exist.  If the teenaged specified relative recipient is not living with a parent or guardian at the time of the development of the personal responsibility agreement, the agreement shall require that the recipient move home with a parent or guardian within 12 weeks of the signing of the agreement unless (i) the recipient will be an adult within the 12 weeks or (ii) there is reasonable concern that abuse to them or their children will ensue as a consequence of their living with their parent or guardian.  This reasonable concern that abuse will ensue shall be justification for supervised living arrangements other than with the teenaged specified relative's parent or guardian.  For purposes of this Part, if there is reasonable suspicion that incest has occurred while living with a parent or guardian, reasonable concern that abuse will ensue is considered to exist;
(4)	Require that the recipient agree to work with the local social services agency to develop and implement a self-sufficiency plan;
		The plan shall contain an assessment of each recipient to determine whether the recipient is able to be placed in the Work First Program, in either active participation status, or in preparatory status from which the recipient is to be moved to active status as soon as a place is available;
(5)	Require that all recipients who are placed in active status are required to become engaged in compensated work, uncompensated community work, work training, education, or any combination of these activities, for 30 hours per week, within 12 weeks of signing the personal responsibility agreement.  Participation in full-time, 30 hours per week, education and training programs shall be limited to one year.  Subsequent education and training shall be supplemented with paid or unpaid work.  Recipients may be engaged in part-time education and training in conjunction with paid or unpaid work for up to two years;
(6)	Require that all recipients placed in active status shall receive the child care necessary to enable them to meet the 30-hour work/training requirement;
(7)	Depending on the assessed needs of the recipient and the availability of service, require that all recipients who are placed in preparatory status because a place in active status is unavailable participate in Job Club, Job Prep, adult basic education, family literacy, human resources development, parenting classes, and other activities that are designed to prepare them for employment and permanent self-sufficiency; and
(8)	Contain language that clearly communicates to each recipient (i) the sanctions to which the recipient may be subject for willful failure to comply with the personal responsibility agreement, and (ii) the specific limitations on assistance for minor specified relatives and (iii) for having a child conceived while on assistance.  The language shall also set out the overall benefit limits, as prescribed in subdivision (3) of subsection (f) of this section.
		The Department of Human Resources shall ensure that all recipients understand the contents of their personal responsibility agreement and understand the consequences of what they are agreeing to and of what will be expected of them.
(d)	WORK FIRST PROGRAM; EDUCATION AND TRAINING; EXEMPTIONS;  GENERAL EDUCATION.
The General Assembly finds that the likelihood of permanent self-sufficiency is minimized unless there is adequate education.  Therefore, all personal responsibility 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 appropriate and that all recipients with school-age children keep their children in school as required by the Compulsory Attendance Law. If the local social services agency considers it important in significantly strengthening the minor's motivation to attain educational or career success and if it is determined that the recipient is able to make appropriate child care arrangements, if necessary, the agreement may contain provision for a minor's further education.  The agreement may also contain provision for education for an adult.
(1)	EDUCATION/TRAINING AND WORK PROGRAMS.
		Active participants in the Work First Program shall have first priority for placement in compensated and uncompensated work that is arranged through the Program.
		The personal responsibility agreement may contain education/training preparation requirements if the local social services agency considers it important in significantly strengthening the recipient's drive to attain educational or career success, as part of a recipient's preparatory status and may contain education/training participation as part or all of the 30-hour per week work/education/training participation required of all recipients on active status.
		Education and training in the Program shall be based on the local job market and designed to assist the recipient to move to permanent self-sufficiency.  Community-based organizations shall be used as much as is reasonably possible in facilitating involvement and retention in the particular family's work-training program.  The Work First Work/Training component, in cooperation with the local social services agency shall involve the private sector in job location, and microenterprise alternatives shall be permitted if appropriate and agreed to.
		In instances when work is unavailable, and the recipient is not otherwise exempt from the work requirement, the recipient shall work in appropriate public and private, nonprofit community service.  A recipient who is exempt from Work/Training requirements or is in preparatory status may volunteer for compensated or uncompensated public and private, nonprofit community service work, if it is determined that the recipient has adequate child care, if needed.  If the volunteer's compensated work amounts to 30 hours per week or more, the recipient shall be given active status, receive provision for child care, and begin the two-year cumulative benefit time limit.  A recipient who is exempt from Work/Training requirements for reasons of disability or illness may be required to volunteer for compensated or uncompensated public and private, nonprofit community service work, if it is determined by the local social services agency that the individual is capable of performing certain types of volunteer work unless otherwise prescribed by federal law.
		As used in this subsection, the uncompensated public and private, nonprofit community service work shall be, to the extent possible, work of such nature as to provide experience that will be beneficial when the recipient moves to compensated employment, that will strengthen the recipient's sense of civic responsibility, or that will enable the recipient better to use that recipient's own individual strengths.
(2)	FOOD STAMP RECIPIENT'S VOLUNTARY WORK SERVICE.
		Food Stamp recipients who are not recipients of AFDC benefits and therefore not subject to the requirements of the Work First Program and its Work/Community Work/Education/Training requirements may, and are encouraged to, participate in performing uncompensated public and private, nonprofit community service work, provided this person is able to make appropriate child day care arrangements, if necessary.  A local social services agency may work with public and private resources to make local funds available for child day care for people wishing to participate voluntarily in this work.
(3)	EXEMPTIONS.
		If it is determined that the recipient is unable to be placed in the Work First Program due to an exempting condition and is unable to meet the 30-hour per week Work/Training requirement, the recipient shall be placed in exempt status.  The following recipients shall be considered exempt:
a.	Recipients under the age of 16;
b.	Recipients who are ill or disabled;
c.	Recipients who are age 60 or older;
d.	Recipients who are needed in the home to care for someone ill or disabled who lives in the home;
e.	Recipients who would be required to travel more than two hours round trip for a normal Work/Training day; or
f.	Recipients who are specified relatives caring for children under the age established each year for enrolling in kindergarten in that year.
		Specified relatives who are caring for children from three months to kindergarten age may, if there are resources available in the Work First Program or in the county or community for child care and if there are places in the Work First Program's Work/Training component, be placed in active status and required to meet the 30-hour per week Work/Training requirement.
		The Department shall ensure that all work, compensated or uncompensated, that recipients participate in through the Work First Program occurs in a safe workplace.
(e)	SANCTIONS.
The Department shall ensure that all agreement provisions required of all recipients in this Part are enforced and that all agreement provisions of services and programs are provided by the appropriate State or local agency.  The Department shall also ensure that all sanctions and limitations are applied in a manner consistent with equal protection across localities, due process, and general equity.
The local departments of social services shall review all personal responsibility agreements every 12 weeks.  The local department of social services shall impose sanctions if a recipient has willfully violated the personal responsibility agreement.  The first review that indicates that the specified relative has willfully violated the personal responsibility agreement shall result in a twenty-five dollar ($25.00) sanction of AFDC assistance for three months.  If the subsequent review reveals that compliance has been restored, the specified relative's benefits shall be restored.
If any subsequent review reveals that the specified relative is still willfully out of compliance, unless the specified relative is pregnant, the specified relative's AFDC assistance and Medicaid benefits shall be removed for three months.  If pregnant, the specified relative continues to receive Medicaid for the duration of the pregnancy and for the three months immediately following the birth.  This Medicaid coverage shall include contraception.  The family's Food Stamp benefits continue, and recipient children remain eligible for AFDC assistance and Medicaid.  If the subsequent review reveals that compliance has been restored, then the specified relative's benefits shall be restored.
If any subsequent review reveals that the specified relative is still willfully out of compliance, unless the specified relative is pregnant, then the specified relative's AFDC assistance and Medicaid shall be removed for an additional six months.  If pregnant, the specified relative continues to receive Medicaid for the duration of the pregnancy and for the three months immediately following the birth.  This Medicaid coverage shall include contraception. The family's Food Stamp benefits continue and recipient children remain eligible for AFDC assistance and Medicaid.
If any subsequent review reveals that the specified relative is still willfully out of compliance, unless the specified relative is pregnant, then the specified relative's AFDC assistance and Medicaid benefits shall be terminated and the specified relative whose benefits are terminated shall be ineligible to reapply for assistance for three years.  If pregnant, the specified relative continues to receive Medicaid for the duration of the pregnancy and for the three months immediately following the birth.  This Medicaid coverage shall include contraception.  The family's Food Stamp benefits continue and recipient children remain eligible for AFDC assistance and Medicaid.
Upon any subsequent reapplication, assistance shall not be reinstated unless (i)	the applicant is willing to enter into a new personal responsibility agreement and a new self-sufficiency plan, (ii) the applicant agrees to be placed in active or preparatory status in the Work First Program, and (iii) the applicant's participation in the Work First Program is likely to result in the applicant's attaining either permanent self-sufficiency or a substantially higher level of relatively independent living than would occur without participation in the Work First Program.
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 assistance shall not be reduced or terminated.  Nor shall the recipient's assistance be reduced or terminated if the failure to comply was a result of circumstances beyond the recipient's control, as defined by rule adopted by the Social Services Commission.
The Department of Human Resources shall ensure that all the recipient's appropriate due process requirements are met in regard to reduction or termination of benefits ensuing under this subsection.
(f)	ADDITIONAL LIMITATIONS AND SANCTIONS; ADDITIONAL INCENTIVES.
In addition to the sanctions prescribed in subsection (e)	of this section and in addition to existing incentives, the following limitations and sanctions are placed on the receipt of AFDC assistance under this Article and the following additional incentives are offered:
(1)	BENEFITS FOR MINOR SPECIFIED RECIPIENTS WHO ARE PARENTS.
	AFDC benefits for minor unmarried specified recipients who are 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 their living with their parent or guardian. Reasonable suspicion that rape or incest has occurred shall constitute reasonable concern that abuse will ensue.  This reasonable concern that abuse will ensue shall be justification for supervised living arrangements other than with the teenaged specified relative's parent or guardian. The agreement shall contain provision for educational services, adolescent parenting programs, and very close monitoring by the social services caseworker, participation in available adolescent pregnancy prevention programs and independent living programs that focus on the prevention of subsequent out-of-wedlock pregnancies, and involving the father in becoming responsible for his child, by providing, at a minimum, 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.
(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 for any additional dependent child born at least 10 months after the recipient begins receiving assistance.  Further, the Department shall ensure that, if a recipient has another child conceived while the recipient is receiving assistance, the general two-year overall benefits limit applies, and the beginning of the two-year period shall not be extended because of the age of the additional child.
		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.
b.	Any dependent infant remains a dependent for purposes of this Article and remains eligible for all assistance for which it is eligible.
c.	If the family cap has been violated by the birth of additional children after 10 months of the specified relative's being on AFDC, then the Department shall ensure that, if the specified relative discontinues receiving assistance and then reapplies for assistance, those additional children are not included in the family size for the purpose of determining the amount of 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.
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, any recipient who is either a specified relative or a teenaged dependent 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 and shall also be advised on the prevention of sexually transmitted diseases.
(3)	OVERALL BENEFITS LIMITS.
a.	All AFDC assistance shall be limited to two cumulative years, including education and Work First Work/Training, from the date of being assigned active status in the Work First Program, except as provided in sub-subdivisions c. and d. of this subdivision.  The personal responsibility agreement shall specify how long any benefit shall be available, not to exceed two cumulative years.  Further, the Department shall ensure that the cumulative two-year benefit period shall be applied to recipients who have an additional child that was conceived while on assistance and that the period shall begin after three months following the birth of the additional child.
b.	Recipients whose assistance is terminated under this provision are ineligible to reapply for three full years following the date of termination.
c.	The local social services agency may extend AFDC assistance beyond the two-year benefit time limit up to one additional year or until the exempting condition referred to in paragraph 3. of this sub-subdivision has ended, if the recipient demonstrates:
1.	Being actively engaged in job search but unable to find employment;
2.	Being unable to complete the job training, job skills, or education program without continued AFDC assistance; or
3.	Having a condition emerge that would exempt recipient from participation, as these conditions are prescribed in the EXEMPTION paragraph of G.S. 108A-26.11(d).
d.	Recipients who have used only part of their two-year benefit limit when they leave AFDC due to increased earned income shall be allowed to restart their two-year benefit upon reapplication (i) if they lost their jobs due to a condition that would exempt the recipient from participation, as these conditions are prescribed in the EXEMPTION paragraph of G.S. 108A-26.11(d), or (ii) if they have left work for good cause attributable to the employer, pursuant to G.S. 96-14.
e.	Cumulative time limits may be waived in cases where domestic violence has occurred that prevents the recipient from attaining self-sufficiency.  Domestic violence shall be substantiated through police reports; domestic violence protection orders granted pursuant to Chapter 50B of the General Statutes; medical documentation; or by services rendered by a domestic violence program.
(4)	FELONS; PAROLE OR PROBATION VIOLATORS.
	Any current recipient convicted of a felony who receives an active sentence in a State-owned or operated facility or found in violation of felony parole or felony probation while receiving assistance shall not be eligible for benefits, and their benefits shall be terminated.  Such recipients may reapply for assistance when the conditions of their conviction, parole, or probation have been satisfied.  The children of these persons shall remain eligible for benefits, and these benefits shall be paid to a protective payee pursuant to G.S. 108A-38.
		This section shall not apply to a recipient who is convicted of a misdemeanor and adjudicated in violation of parole or probation and continued on parole or probation.
(5)	DRUG AND ALCOHOL TREATMENT REQUIRED; DRUG TESTING FOR WELFARE RECIPIENTS.
a.	As a condition of eligibility for benefits, each applicant or current recipient, determined by a qualified substance abuse treatment provider to be addicted to alcohol or drugs and to be in need of professional substance abuse treatment services, shall be required to enter into an agreement to participate satisfactorily in an individualized plan of treatment in an appropriate treatment program.  As a mandatory program component of participation in such an addiction treatment program, each such applicant or current recipient shall be required to submit to an approved, reliable, and professionally administered regime of testing for presence of alcohol or drugs, without advance notice, during and after participation, in accordance with the addiction treatment program's individualized plan of treatment, follow-up, and continuing care services for the applicant or current recipient.
b.	An applicant or current recipient who fails to comply with any requirement imposed pursuant to this section shall not be eligible for AFDC cash benefits, but shall be considered to be receiving such aid for purposes of determining eligibility for medical assistance.
c.	The children of any applicant or current recipient shall remain eligible for benefits, and these benefits shall be paid to a protective payee pursuant to G.S. 108A-38.
d.	An applicant or current recipient shall not be regarded as failing to comply with the requirements of this section if an appropriate drug or alcohol treatment program is unavailable.
(6)	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.	The General Assembly intends to amend the child support law to provide for the revocation of occupational and recreational licenses of people who are willfully out of compliance with child support orders.
(7)	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) eligibility asset limit for those receiving AFDC 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 five thousand dollars ($5,000).
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; and
2.	Eliminating the requirement of an employment 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.
		For subsequent months, the standard work-related expense disregard of ninety dollars ($90.00) per month shall be applied.
e.	The Department of Human Resources shall disregard the employment earnings of minor children of AFDC recipients if the minor children are enrolled in and attending school.
(8)	ADDITIONAL WORK INCENTIVES.
a.	Individual Development Accounts (IDA) Demonstration Projects.
		The Department of Human Resources shall establish demonstration projects to test the use of IDAs as vehicles to encourage the development of recipients' self-sufficiency.   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 in the demonstration projects to ensure that they are used only as prescribed in this subdivision.
b.	1.	The Department of Human Resources shall increase transitional Medicaid and child care from 12 months to 18 months.
2.	The General Assembly shall designate an appropriate legislative study committee, which may be the Welfare Reform Study Commission, if reestablished, to conduct a study of ongoing Welfare Reform issues and to report recommendations to the 1995 General Assembly, Regular Session 1996, within one week of its convening.  This study shall include:
I.	Consideration of creating Small Business/Child Care Alliances similar to Small Business Health Care Alliances;
II.	Consideration of ways 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;
III.	Consideration of the feasibility of excluding income-producing property from eligibility limits for AFDC and Food Stamps, on analogy with the Medicaid and SSI exclusions;
IV.	Consideration of how better to involve local governmental institutions in Welfare Reform Initiatives;
V.	Consideration of the extent, if any, to which special considerations should be made for battered women who might be coerced into sex to avoid violence and thus violate the family cap and for battered women who might need a longer period to become self-sufficient;
VI.	Consideration of how to handle situations where public or private community service jobs are not available and no stable job opportunity has been created, and where jobs requiring skills training exist but the recipient reaches the benefits time limit prior to having received adequate skills training; and
VII.	Consideration of ways to address the transportation issue for people in areas without public transportation and who cannot afford an automobile.
(9)	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 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.
d.	The General Assembly shall examine how best the State may ensure that SSI benefits paid for disabled children are not abused but are used for their proper purposes, shall determine through study or otherwise what legislation, if any, is necessary to achieve this purpose, and, notwithstanding any rule to the contrary, may 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 or designate a commission or committee to oversee ongoing program evaluation as welfare reform progresses in North Carolina in order to assess performance of all involved agencies.  This oversight shall begin with overseeing a formal independent two-year program evaluation beginning no later than six months following ratification of the 1995 North Carolina Partnership for Independence Act.  This evaluation shall measure the Work First Program's Performance outcome and effect on recipients and families of recipients.  The commission or committee shall report the results of this evaluation to the General Assembly, together with any legislative recommendations.
The Department of Human Resources shall provide the commission or committee with quarterly reports as to changes in the reported number of child abuse and neglect cases, domestic violence incidents, assaults, reports of mental or psychological problems, changes in the need for foster care, and changes in the case load of child protective services, arising with families where a member whose AFDC, Food Stamps, or Medicaid benefits have been terminated.  The Department shall establish a baseline of reports within AFDC families no later that six months following ratification of the 1995 North Carolina Welfare Reform Act to provide a basis of comparison for subsequent reports.
The commission or committee 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 Department of Labor, 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 Center, Inc., 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 assisting families to attain 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 Department of Labor shall, in particular, conduct its work-training related programs in a manner that pays particular attention to issues of welfare reform to move recipients permanently to work and self-sufficiency.
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. 1.1.  G.S. 108A-29 and G.S. 108A-30 are repealed.
Sec. 2.  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. 3. The General Assembly intends to consider the appropriateness of funding and otherwise supporting and encouraging the following Welfare Reform Initiatives in subsequent fiscal years:
(1)	Greater inclusion of noncustodial fathers in job placement and employment training activities;
(2)	More emphasis on promoting policies and funding preventing adolescent pregnancy and substance abuse;
(3)	Greater provision of child care and transportation for the Work First Preparatory group;
(4)	Greater access of children to programs that will enhance likelihood of future academic, economic, and social success; and
(5)	A stronger relationship between welfare reform and job creation and economic development.
Sec. 4.  (a) The General Assembly encourages the Governor to establish a Child and Family Services Interagency Council to focus on ensuring a smooth, rational, efficient coordination of efforts across agency, departmental, and division lines throughout the entire, long-range process of welfare reform.
(b) Within funds available to it, the Department of Human Resources shall establish a pilot demonstration project to test the feasibility of establishing a formal mediation process to resolve disputes between recipients and the local social services departments before these disputes result in willful noncompliance and sanctions.  The project shall include peers of recipients as a component of any mediation process established.  The Department shall report the results of this pilot to the 1997 General Assembly within one week of its convening.
Sec. 5.  The Department of Human Resources shall apply for all necessary waivers required by Sections 1 and 1.1 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 1.1 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 1.1 of this act become effective January 1, 1996.  Section 2 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.   Any appropriations made by this act become effective July 1, 1995.  Sections 3, 4, 5, and 6 of this act are effective upon ratification.