(a) Except as provided in (b) of this section, the department shall reduce the amount of cash assistance provided to the family of an Alaska temporary assistance program applicant or participant who, without good cause, fails to comply with a condition of the family self-sufficiency plan, who fails to participate in work activities required as a part of the Alaska temporary assistance program, or who fails to cooperate with the child support services agency as required under AS 47.27.040. The reduction shall be,

(1) beginning on the date the department makes a finding that the family is not in compliance under this subsection, 40 percent of the maximum cash assistance that would be payable under AS 47.27.025 for a family of the same size, assuming the family has no income counted for purposes of this chapter, until the date the department determines that the family is in compliance under this subsection if the family comes into compliance within the first four months after the date of the department's finding of noncompliance under this subsection; on the date the department determines that the family is in compliance, the department shall begin to pay the family the full amount of cash assistance for which the family is eligible;

(2) beginning five months after the date the department made the finding that the family was not in compliance under this subsection, 75 percent of the maximum cash assistance that would be payable under AS 47.27.025 for a family of the same size, assuming the family has no income counted for purposes of this chapter, until the date the department determines that the family is in compliance under this subsection if the family comes into compliance during the fifth, sixth, seventh, or eighth month after the date the department initially determined that the family was not in compliance under this subsection; on the date the department determines that the family is in compliance, the department shall begin to pay the family the full amount of cash assistance for which the family is eligible;

(3) beginning nine months after the date the department made the finding that the family was not in compliance under this subsection, the full amount of the family's cash assistance if the noncompliance under this subsection is not corrected within eight months after the date of the department's initial finding of noncompliance under this subsection; in order to again receive cash assistance under this chapter, the family shall reapply under AS 47.27.020 and satisfy all requirements applicable to applicants under that section.

(b) Notwithstanding (a) of this section, the department may not reduce a family's cash assistance under (a)(2) or (3) of this section unless there is, in the family's case record, (1) documented evidence that the department has attempted to visit the family's home after the imposition of a reduction under (a)(1) of this section and (2) a written finding by the department that, considering the results of any home visit attempted under (1) of this subsection and the availability of other services in the community that are appropriate to the family's needs, the health, safety, and well-being of the children in the family will not be significantly jeopardized by imposition of a reduction under (a)(2) or (3) of this section. If the department does not reduce a family's cash assistance based on the provisions of this subsection, the department may manage the family's cash assistance on behalf of the family under regulations that the department shall adopt concerning management of cash assistance under this subsection.

(c) An Alaska temporary assistance program applicant or participant who receives cash assistance, a diversion payment, or self-sufficiency services when not entitled to them under this chapter because the information provided by the applicant or participant was inaccurate or incomplete is liable to the department for the value of the cash assistance, diversion payment, and self-sufficiency services improperly provided to the applicant or participant.

(d) In a civil action brought by the state to recover the value of cash assistance, a diversion payment, or self-sufficiency services improperly provided under this chapter, the state may recover costs of investigation and prosecution of the civil action, including attorney fees as determined under court rules.

(e) The department shall adopt regulations necessary to implement this section.