ARIZONA HOUSE OF REPRESENTATIVES FIRST REGULAR SESSION - 1999

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__X__ For Committee on HUMAN SERVICES

_____ For Committee on ______________________________________

_____ For Caucus and COW

_____ As Passed the House

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Abstract for HB 2617 (Arizona Works; procedures; appropriation)

Sponsor: Anderson

SUMMARY OR PROPOSED STRIKE-EVERYTHING AMENDMENT TO HB 2617:

The proposed strike-everything amendment to HB 2617 modifies the Arizona Works welfare privatization program established by Laws 1997, Chapter 300, and amended by Laws 1998, Chapter 211.

Currently, Arizona Works has been established with an initial two-year pilot phase beginning this year in the East Valley, to be followed by a two-year pilot in a rural area while the urban phase continues. Both pilots would end in 2003, at which point the Legislature would determine whether or not to roll out Arizona Works statewide. A contract for the East Valley was awarded earlier this year to Maximus, a private provider, who would expand its program to the rural pilot in 2001. Current legislation permits only one private vendor to operate Arizona Works.

The strike-everything amendment does the following:

Rolls out Arizona Works statewide effective January 1, 2000.

Creates four contract provider sites, based upon DES's existing service districts: District I-E Maricopa County-East and District III as the Arizona Works Northeastern district; District I-W Maricopa County-West and District IV as the Arizona Works Western site; District I-C Maricopa County-Central and District V as the Arizona Works Central site; and, District II, Pima County and District VI as the Arizona Works Southeastern site. Thus, the current vendor, Maximus, gains DES District III to its existing service region through January 1, 2004. The three remaining Arizona Works provider sites are to be bid by one or more private or public entities for four-year contracts (however, only one site may be awarded to a public entity). RFPs must be issued by October 1, 1999.

Replaces the Arizona Works Procurement Board with the Arizona Works Privatization Board, comprised of three members appointed by the Governor, two members by the Speaker of the House and two members by the President of the Senate. Initially, four terms would end January 1, 2002, and three terms would end January 1, 2003. Subsequent terms would be four years.

The Arizona Works Privatization Board's contract process is exempt from the competitive government process, as was that of the previous Arizona Works Procurement Board.

In addition to other incentives, the Arizona Works Privatization Board shall use a pay-per-performance model for vendors, based upon:

25% of the payment to the vendor at the time of client assignment to the program;

25% of the payment at the time of client job placement;

35% of the payment after the client has been in a job for six months; and,

15% of the payment after the client has been in a job for one year.

The vendor shall also receive performance incentive payments from up to 10% of the TANF block grant based upon:

An increase of 22% for any period of time a client earns more than 10% over $8.00/hr.

An increase of 28% for any period of time a client earns more than 20% over $8.00/hr.

An increase of 50% for any period of time a client earns more than 30% over $8.00/hr.

These amounts shall be increased by 5% for rural counties with an unemployment rate above 12%.

The maximum monthly grant of $350 for levels 3 and 4 under the original Arizona Works program is replaced by the current model used by DES's EMPOWER Redesign of higher payments for families with more children. Additionally, the maximum grant is now pegged to the 1998 rather than 1992 federal poverty level. Worker's compensation will continue to be provided by the vendor for levels 3 and 4.

Evaluations of Arizona Works by JLBC and an independent evaluator remain similar to that currently prescribed by statute.

Indian reservation land and municipalities with over 35% of their residents eligible for another TANF program based on their status as tribal members (e.g., Guadalupe) continue to be excluded from Arizona Works.

Repeals the privatization of the JOBS program mandated under Laws 1997, Chapter 300.

This Arizona Works statewide privatization program would end on July 1, 2009.

Contains technical corrections.

Prepared by: Mark Barry, Melissa Sandoval

hb2617.hs 2/17/99 bh

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