Legislature(2019 - 2020)BARNES 124
03/09/2020 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB235 | |
| HB93 | |
| HB301 | |
| SB52 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 235 | TELECONFERENCED | |
| *+ | HB 301 | TELECONFERENCED | |
| + | SB 52 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 93 | TELECONFERENCED | |
HB 235-AK WORKFORCE INVESTMENT BOARD:ALLOCATIONS
3:16:17 PM
CHAIR SPOHNHOLZ announced that the first order of business would
be HOUSE BILL NO. 235, "An Act relating to allocations of
funding for the Alaska Workforce Investment Board; and providing
for an effective date."
3:16:34 PM
ASHLEY CARRICK, Staff, Representative Adam Wool, Alaska State
Legislature, on behalf of Representative Wool, prime sponsor,
provided a summary of HB 235. She stated that HB 235
reauthorizes the Technical Vocational Education Program (TVEP)
for three years to 2023. This program provides technical and
vocational training across the state to various recipients and
has been in place since 2000.
3:17:17 PM
REPRESENTATIVE STUTES moved to adopt the proposed committee
substitute (CS) for HB 235, labeled 31-LS1480\M, Wayne, 3/6/20,
as the working document.
3:17:37 PM
CHAIR SPOHNHOLZ objected for the purpose of discussion.
3:17:47 PM
TED MADSEN, Staff, Representative Ivy Spohnholz, Alaska State
Legislature, on behalf of Chair Spohnholz, explained the changes
to HB 235 proposed under the committee substitute (CS), Version
M. He paraphrased from the document, entitled Explanation of
Changes Version A to Version M [included in the committee
packet], which read in its entirety as follows [original
punctuation provided]:
The proposed committee substitute makes three
substantive changes to the original A version of House
Bill 235:
? In Section 1, it changes the TVEP contribution rate
from .16 to .18 percent. This adds to the overall
available pool of TVEP funds. This change is found on
page 1, line 7 of version M.
? In Section 2, it extends the sunset date an
additional 2 years. The program would now sunset on
June 30, 2025, rather than 2023 as proposed in the A
version. This change is found on page 1, line 13 of
the M version.
? In Section 2, the M version proposes to add one new
allocation at 1.925% to the Kodiak Seafood and Marine
Science Center. This change is found on page 2, line
13.
o Allocations for other institutions, aside from
the University of Alaska, are slightly decreased.
These changed allocations are found on page 2, lines
4-12.
o While allocations for most existing statutorily
designated institutions are reduced by 3.5% from their
current statutory amount, the change to the TVEP rate
found in Section 1 allows each institution to see an
increase in overall funds disbursed. See attached
Table #1.
o Section 3 adds a new subsection to AS
23.15.835. This new subsection (i) directs that the
University of Alaska administer the funds allocated to
the Kodiak Seafood and Marine Science Center for
programing and capital improvements consistent with AS
16.52.020. AS 16.52.020 spells out the duties of the
Kodiak Seafood and Marine Science Center. This change
is found on page 2, lines 14-18.
There is one additional change to the A version in the
retroactivity clause (section 4). All sections of the
bill, including the newly proposed changes in Section
1 and Section 2, and the added Section 3, will take
effect retroactively if the bill does not take effect
by June 30, 2020.
3:20:11 PM
MATT GRUENING, Staff, Representative Louise Stutes, Alaska State
Legislature, on behalf of Representative Stutes, discussed the
Kodiak Seafood and Marine Science Center (KSMSC). The KSMSC was
established under the University of Alaska (UA) under the
College of Fisheries and Ocean Sciences in 1981 by the
legislature through Title 16 [Fish and Game], Chapter 52
[Fishery Industrial Technology Center], AS 16.52.010-070, as the
Fisheries Industrial Technology Center. It is the states only
seafood pilot plant. The KSMSC mission under AS 15.52.020, is
to support employment opportunities and other benefits to the
state and the seafood industry through training, research, and
industry collaboration. He provided a short history of the
center and directed attention to an informational document,
entitled About Kodiak Seafood and Marine Science Center
[included in the committee packet]. He said that Alaskas
seafood industry is the states single largest private employer;
however, the processing industry receives little annual
dedicated funding. He explained that seafood processing
employees contribute a significant amount of funds to the TVEP
each year. From fiscal year 2016 (FY 16) to FY 18 processing
workers contributed an average of $607,000 to the fund while
only averaging $64,000 per year from FY 14 to FY 20 in TVEP
funding, which is approximately 1.2 percent of the universitys
TVEP allocation. He stated that while the university and Alaska
Vocational Technical Center (AVTEC) have increased a percentage
of their TVEP funds focused on fisheries and maritime training
over the last few years, very little funding has been targeted
to the seafood industry workforce directly.
MR. GRUENING noted that the industry has clearly identified
training needs and desires through the Alaska Research
Consortium survey [included in the committee packet], which was
provided for by a federal Economic Development Administration
grant to identify the statewide needs. He reported that over
25,000 seafood workers contribute to the TVEP fund annually. He
said with the legislative mandate for the KSMSC yet to be
realized, this reauthorization represents an opportunity to
reinvest in Alaskas seafood industry with funds that are
generated from that industry. He further noted that doing so
will help contribute to statewide employment opportunities, the
value of Alaskas seafood, and the long-term economic health of
the state. He added that this would not result in a decrease to
shares. Furthermore, there are letters of support from
organizations [included in the committee packet], such as the
Pacific Seafood Processors Association (PSPA); the Alaska
Seafood Marketing Institute (ASMI); North Pacific Seafoods, Inc.
(NPSI); the Alaska Research Consortium (ARC); and others.
CHAIR SPOHNHOLZ asked for the bill sponsors position on the
proposed CS.
3:25:12 PM
MS. CARRICK explained that Version M represents a compromise
between Representative Wool, prime sponsor, and the House Labor
and Commerce Standing Committee. She said Representative Wool
would like to express his acceptance of the proposed CS.
3:25:46 PM
REPRESENTATIVE STORY expressed her concern about extending the
reauthorization period from three years to five years. She
pointed out that HB 235 concerns contributions to the states
technical and vocational education programs, adding that Alaska
has made strides in offering those. She offered her belief that
a three-year sunset would better allow for the opportunity to
readjust if necessary. She asked how input - specifically
regarding industry trends - would be incorporated and received
with a five-year authorization period.
MS. CARRICK explained that recipients prefer the stability of
knowing that they will receive funding. She said all recipients
that were asked unanimously preferred the 5-year reauthorization
period compared to the option of three years.
REPRESENTATIVE STORY opined that three years is certainty.
CHAIR SPOHNHOLZ asked Representative Story if she intends on
offering an amendment today or if she is objecting to the CS.
REPRESENTATIVE STORY expressed her hope that the bill sponsor
would withdraw the five-year sunset.
CHAIR SPOHNHOLZ pointed out that currently, its part of the
proposed CS. She explained that Representative Story could
offer a conceptual amendment to the CS if Version M were
adopted.
3:30:27 PM
REPRESENTATIVE FIELDS expressed his support for the stability
that a five-year window lends the recipients and the
institutions. He offered his belief that between the annual
TVEP report and the ability that legislators have to interact
with those institutions there will be an opportunity to make
suggestions or intervene if necessary.
3:31:20 PM
REPRESENTATIVE RASMUSSEN asked if the increased contribution
rate is .02 percent of every Alaska workers paycheck.
CHAIR SPOHNHOLZ clarified that it is not an increase on
withholdings from workers paychecks. She explained that the
fund was overcapitalized, leaving enough money to withstand this
additional increase. She said they are putting that money to
good use.
REPRESENTATIVE RASMUSSEN questioned whether there is enough of a
surplus to cover five years instead of three.
CHAIR SPOHNHOLZ answered yes.
3:32:29 PM
LENNON WELLER, Economist/UI Actuary, Department of Labor &
Workforce Development, explained that the unemployment insurance
trust fund has currently found itself in an enviable position
with substantial reserves. Currently, there is nearly half a
billion in the fund, which is roughly 80 million dollars above
the ideal position to meet the majority of potential benefit
costs. Regarding reserve ratios, he said, the fund targets
between 3-3.3 percent of wages at any given time. Currently,
there is over 3.8 percent, which means .5 percent of wages are
above their own statutory targets.
CHAIR SPOHNHOLZ noted that there is over 500 million dollars of
overcapitalized in the fund and the proposed CS budgets 1.68
million dollars additional per year.
MR. WELLER affirmed that. He restated that the fund has nearly
500 million dollars in it, adding that they are overcapitalized
by roughly 80 million dollars. He said based on the statutory
and historical targets, taking an additional 1.6 million dollars
from the fund would not be detrimental.
3:34:59 PM
CHAIR SPOHNHOLZ removed her objection. There being no further
objection, Version M was adopted as the working draft.
3:35:19 PM
REPRESENTATIVE STORY expressed her hope that the next annual
report will show trends in enrollment in the various career and
technical programs and that any necessary adjustments will be
considered.
3:36:36 PM
REPRESENTATIVE RASMUSSEN agreed with Representative Story. She
moved Conceptual Amendment 1, which would replace the five-year
reauthorization with a three-year reauthorization.
CHAIR SPOHNHOLZ objected to Conceptual Amendment 1. She
maintained that the majority of TVEP recipients prefer more
stability in funding.
3:37:35 PM
MS. CARRICK reiterated that after speaking with over half of the
TVEP recipients, she is certain that they unanimously prefer a
five-year reauthorization.
3:38:03 PM
REPRESENTATIVE HANNAN expressed her opposition to a three-year
reauthorization. She opined that a three-year window to
reauthorize the program is a short window to accomplish any
planning. She said five years is not too long, and any program
that is not meeting its labor needs may have already shifted and
changed after five years. She stated that five years is a good
planning window.
3:39:30 PM
REPRESENTATIVE FIELDS noted that NACTEC, for example, works
closely with the local school district, so in considering the
timeframe one must also take into account the actions of the
school board and, in turn, the employers. He said five years is
not a long time to implement a change, analyze, and assess it.
3:40:07 PM
REPRESENTATIVE RASMUSSEN asserted that she doesnt want this to
be perceived as an attack on the importance of this program.
She said there may be adjustments and additional needs that
arise, which is the reason she is advocating for a three-year
reauthorization.
A roll call vote was taken. Representatives Rasmussen, Story,
and Gillis voted in favor of Conceptual Amendment 1.
Representatives Fields, Stutes, Hannan, and Spohnholz voted
against it. Therefore, Conceptual Amendment 1 failed by to be
adopted by a vote of 3-4.
CHAIR SPOHNHOLZ articulated that an important part of crafting a
compromise is to make sure that everyone wins. She expressed
her hope that CSHB 235 is now moving from the committee with
that standpoint. She said a new beneficiary was added to the
TVEP, which helps to support Alaskas fishing industry;
furthermore, every beneficiary came out with more financing
without jeopardizing the fund source or the stability of the
state. She shared her belief that this is a win.
3:42:51 PM
REPRESENTATIVE STUTES moved to report CSHB 235, Version
LS1480\M, Wayne, 3/6/20, out of committee with individual
recommendations and the accompanying fiscal notes. Without
objection, CSHB 235(L&C) was moved from the House Labor and
Commerce Standing Committee.