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F I S C A L I M P A C T R E P O R T

SPONSOR Madalena

DATE TYPED 1/25/05

HB 169

SHORT TITLE Tribal Land TANF Programs

SB

ANALYST Weber

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$1,519 million

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Indian Affairs Department (IAF)

SUMMARY

Synopsis of Bill

House Bill 169 appropriates $1,519,999 from the GENERAL FUND) to The Human Services

Department for the purpose of supporting TANF activities of the Navajo and Zuni tribal pro-

grams. The Navajo Nation is to receive $1,333,000 and the Zuni tribal program $186,900.

Significant Issues

The Human Services Department reports.

Both the Navajo Nation and the Zuni Tribe operate a Tribal TANF program on tribal

lands that is approved and directly funded by the federal government. The bill would

supplement federal dollars by authorizing HSD to provide the Navajo Nation and the

House Bill 169 -- Page 2

Zuni Tribe with general fund monies to spend on their tribal TANF Programs.

The Indian Affairs Department contributes.

HB 169 addresses four key areas important to Tribal communities: 1) Provide assistance

to needy families with children; 2) Promote preparation for work and marriage; 3) Pre-

vent and reduce out-of-wedlock pregnancies; and 4) Encourage two-parent families with

traditional and cultural values of tribal communities. In addition, HB 169 would allow

the Tribal TANF programs to assume control and administration of a major social pro-

gram, exercise tribal sovereignty, demonstrate tribal self-determination while assuming

direct responsibility in serving tribal members and promote individual and family self-

sufficiency and economic independence.

FISCAL IMPLICATIONS

The appropriation of $1,519,000 contained in this bill is a RECURRING expense to the

GENERAL FUND. Any unexpended or unencumbered balance remaining at the end of FISCAL

YEAR 2006 shall revert to the GENERAL FUND.

OTHER SUBSTANTIVE ISSUES

HSD notes the following regarding previous appropriations to the Tribal programs.

The use of general fund monies to fund the Tribal TANF expenditures will avoid the legal prob-

lems that were created by a prior 2003 appropriation of federal TANF monies associated with

New Mexico’s state TANF program for the tribes. While the bill avoids the pitfalls of using fed-

eral TANF monies that would trigger the imposition of contradictory state, federal and tribal re-

quirements on funding use, the bill should be further clarified as to the character of the appro-

priation in relation to the state TANF program.

Basically, under the federal law relating to the state TANF program, the state is required to ex-

pend a specific amount of state general funds (so-called Maintenance of Effort, or MOE, funds)

in association with the State TANF program. States are authorized to use MOE funds or state

funds that are not MOE funds to supplement the funding for the Tribal TANF programs that

comes from the federal government. The specific legal requirements (including reporting, timing

and reimbursement requirements) that will apply to the fund transfer authorized by HB 169 will

depend on whether the appropriations are part of the maintenance of effort (MOE) monies for the

state TANF program or are state funds that are separate and apart from the state MOE money for

the state TANF program. Fewer legal restrictions apply if the state funds are not MOE funds and

HSD recommends, in fact, that any Tribal TANF funding not be part of the state MOE funds.

Since HB 169 is in addition to other funding bills for the state TANF program, HSD presumes

that the funds appropriated by the bill are intended to be separate and apart from, and in addition

to, the appropriations to the state’s TANF program for fiscal year 2006 and the MOE funding for

the state program. In order to avoid any issues in the implementation of the bill, consideration

should be given to explicitly clarify this point.

The IAD adds similar information.

In 2003, $1.3 million (Navajo Nation TANF) and $186,900 (Zuni TANF) was appropriated the

House Bill 169 -- Page 3

same purposes. A dilemma was created by the fact that the legislation identified the State’s fed-

eral TANF funds as the funds to be appropriated to these Tribes. Because these federal funds

were identified to be appropriated, the New Mexico Works Act, the Act that governs the NM

State TANF plan applied to those funds. Therefore, the appropriations were subject to both state

and federal requirements applicable to federal funds granted to carry out the State’s TANF plan.

Both the Navajo Nation and Zuni Tribe have federally-approved tribal TANF programs in place.

However, the tribal plans are subject to eligibility, work, reporting and other legal requirements

that are very different from the NM State’s TANF plan requirements. The Navajo Nation and

Zuni Tribe discussed these issues at length and tried numerous avenues to be able to utilize the

state appropriated (federal) funds. However, because the 2003 appropriations would subject the

Nation and the Tribe to follow state and federal requirements that are inconsistent with the tribal

requirements, agreement could not be reached on how the funds would be utilized and the funds

reverted..

In an effort to prevent the same problem from occurring, HB 169 must contain language that

would allow the tribal TANF programs to receive General Fund money that are separate and

apart from the State’s federal TANF money.

POSSIBLE QUESTIONS

Since the Navajo Nation TANF program operates in three states, will the New Mexico funds be

used in other states.

MW/lg