Legislature(1995 - 1996)
03/26/1996 03:04 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 435 - STATE TRAINING & EMPLOYMENT PROGRAM Number 2089 CO-CHAIR TOOHEY turned the gavel over to Co-Chair Bunde. DWIGHT PERKINS, Special Assistant, Office of the Commissioner, Department of Labor, read the following statement: "For the past six years the State Training and Employment Program (STEP) has temporarily existed as a contingent training and employment program for Alaska's workers. The original 1989 legislation allowed the state to collect from each worker in Alaska one-tenth of 1 percent of their employee tax contribution to fund an alternative, flexible training program designed with a threefold purpose: 1) to reduce future claims against unemployment benefits; 2) to foster new jobs for Alaskans by encouraging businesses to locate in Alaska due to the availability of a skilled work force; and 3) to increase training opportunities to Alaskans severely affected by economic and technological fluctuations. Alaska private sector employers, organized labor and the now-defunct Alaska Job Training Council are in accord that STEP is a proven and valid approach to advancing Alaska residents' opportunities for viable employment. In the six years since its inception as a temporary measure, STEP has demonstrated its efficiency. We know that STEP works for Alaskans. The legislation before you will enable STEP to take its rightful place as an established permanent program to keep Alaskans' employment skills up-to-date and competitive in the rapidly changing world of work." He introduced Rebecca Nance, Director of Employment Security, and Arbe Williams, Director of Administrative Services, who were available to answer questions. CO-CHAIR BUNDE asked Mr. Perkins if he would like to speak to the reason behind the two sets of fiscal notes. MR. PERKINS replied Remond Henderson from the Department of Community & Regional Affairs had drafted the fiscal notes and would be happy to respond. Number 2236 REMOND HENDERSON, Director, Division of Administrative Services, Department of Community & Regional Affairs (DCRA), explained that the original fiscal notes were prepared based on instructions the department had received from the Office of Management & Budget, which was to show these numbers for information purposes only and to show negative amounts as to what would happen if the bill was not passed. Those were the instructions from the DCRA's budget analyst; Department of Labor on the other hand, got different instructions and put their numbers in as positive numbers for information purposes only. Mr. Henderson revised his fiscal note to be consistent with the Department of Labor, and the amounts indicated in the fiscal notes are the amounts in the respective budgets for DCRA and the Department of Labor. Number 2295 REPRESENTATIVE ROKEBERG asked if the figures had been changed on the fiscal notes? MR. HENDERSON responded affirmatively and explained the fiscal note he prepared was based on the amount in DCRA's budget. There was a budget amendment that was prepared to reduce the amount in their budget so that it matched the amount that was in the Department of Labor's budget that they were going to RSA (reimbursable service agreement) to the DCRA. Now the amount in the fiscal note agrees with the amount in the DCRA's budget and also agrees with the amount the Department of Labor is transferring to the DCRA. REPRESENTATIVE ROKEBERG asked if this was a wash transaction in that regard. MR. HENDERSON responded yes. REPRESENTATIVE ROKEBERG presumed there was no fiscal impact per se to the general fund. MR. HENDERSON confirmed that. Number 2335 DAVID STONE, President, Council of Alaska Producers, said the council is a nonprofit corporation whose members are essentially all of the major mining companies who are actively exploring, developing and operating in Alaska today. Examples are Cominco and the Red Dog Project, Kennicott and the Greens Creek Mine, Nevada Gold Fields and Nixon Forks Mine. On behalf of the council, he expressed the mining industry's support for the reauthorization of the State Training and Employment Program. This program is and has been business friendly and business accessible. The program encourages businesses to invest in the skills of Alaskans. TAPE 96-33, SIDE B Number 001 MR. STONE continued this program helps the Alaskan work force keep up-to-date with new technologies and techniques, keeping it competitive in the world economy. The program is more flexible and has less restrictions than most federal job training programs. The primary reason for that is due to the fact that this program has been designed and is administered by Alaskans. The program has been well integrated with other existing employment and training programs to the delivery of the already established and proven private industry councils and complements those efforts. The STEP has already trained Alaskans and resulted in jobs for Alaskans in the mining industry such as the Nixon Forks mine in McGrath and the Greens Creek Mine near Juneau. The program has also helped workers who have lost their jobs. As the mining industry grows and hopefully creates new high paying jobs in Alaska, STEP can help ensure that it's Alaskans that are trained and qualified to fill these jobs. MR. STONE said the Council of Alaska Producers views STEP as a true partnership between the state of Alaska and industry which will result in the jobs being filled by Alaskans. He urged the committee to pass HB 435. Number 046 CO-CHAIR TOOHEY asked Mr. Stone if there was some reason he hadn't mentioned Echo Bay. MR. STONE said that Echo Bay has been very supportive of STEP because those monies have been used for the mine training school in Juneau at the University of Alaska Southeast. Echo Bay sees the potential of 400 jobs for the AJ mine project, and in order to hire Alaskans, there's going to be training involved and Echo Bay would like to see STEP be a part of that training. REPRESENTATIVE ROBINSON asked how the STEP integrated into the university program as she understood the program was being shut down. MR. STONE responded the instructor is taking a leave of absence and the university is willing to start the program again when Echo Bay gives the go ahead that indeed they have the permits and are ready to start training for those jobs. REPRESENTATIVE ROBINSON understood that this training program took place through the university. MR. STONE said that was one aspect of the training. These monies can be used for individuals to go to the Alaska Vocational Technical Center (AVTC) as an example, depending on the type of training. In the case of the underground mine training school, these can monies can also be used for that. Number 110 REPRESENTATIVE ROKEBERG asked if he understood correctly that there has actually been a program in Juneau training miners for jobs that don't exist. MR. STONE said no, the university's mine training school is basically going into a "mothball" state. REPRESENTATIVE ROKEBERG said he was talking about previously. MR. STONE explained the last class had trained workers here in Juneau for the Nixon Fork mine in McGrath because this is the only underground mine training school site. So people were trained for jobs that did exist. Number 135 CO-CHAIR BUNDE asked what kind of tuition the participants are expected to pay. MR. STONE said he didn't know the figure, but the council partners with the university so the costs are quite reasonable. Participants need appropriate clothing and tools to learn their trade, some of which are provided by the mining industry. CO-CHAIR BUNDE said he was curious about the industry's contribution. MR. STONE noted that the industry has contributed a great deal and is ongoing, as long as the school exists. Industry has provided heavy equipment, tools, spare parts, employees as trainers, etc. He emphasized that it has been a true partnership arrangement. CO-CHAIR TOOHEY asked if this was what she referred to as a proprietary education, with a specified time period and the participants graduating with a degree. MR. STONE said this was a 6 week school and the participants receive a 40-hour Mining Safety & Health Administration (MSHA) certification which is an underground certification that is required to go underground. The participants get basic exposure to explosives, drilling and all the basics of underground mining, as well as their math skills, etc. When they complete the training, it conveys to the industry that these people are ready for work and have the basic skills to be exposed to underground mining. CO-CHAIR BUNDE clarified that proprietary schools are private for profit schools; this is a certificate program through the university. CO-CHAIR TOOHEY said she understood that and asked if the certificate was valid in other states. She inquired as to the cost of the school. MR. STONE responded that the certificate is valid in other states and he guessed the cost to be somewhere in the neighborhood of $1200 for the 6 weeks. Number 237 REPRESENTATIVE ROBINSON asked Mr. Stone to explain how it would work when Greens Creek, for example was ready to start training. MR. STONE gave a hypothetical situation where the Kensington project is the next one; Kensington says they will have a need for a certain number of entry level employees and they'd like them to be Alaskans. The university then will actually recruit for the program and run that program when it is filled with approximately 20 students. That is how it has been done in the past. When Nixon Forks notified the university of their need to train locally, residents from McGrath were brought to Juneau, trained and those individuals who graduated were able to get jobs. Number 282 REPRESENTATIVE ROKEBERG referenced the supporting documents in committee members' packets which indicated that some of the state training was conducted out of state. He asked what the breakdown was regarding the location of the training that had taken place. MR. PERKINS explained that the first three pages of the supporting documents were current expenditures; the estimated FY 97 budget, the estimated FY 96 budget and the FY 95 actuals. He directed the committee's attention to the documents pertaining to the Anchorage/Mat-Su area which listed the vendor's name, the type of training and the amount. REPRESENTATIVE ROKEBERG asked if the assistance and the training were summed together for a total of $453,000 for Anchorage or was it $253,000? MR. PERKINS said the FY 95 actuals were $253,819 for training and $200,351 for employee assistance. He commented that Mark Michaelson or Remond Henderson could probably give a more detailed answer. CO-CHAIR BUNDE asked Mr. Henderson if he had an answer to Representative Rokeberg's question. MR. HENDERSON referred to the FY 95 actual amounts with a summary schedule for the three service delivery areas. The first one was the Alaska Statewide Service Delivery Area which represented the amount spent by the Alaska Statewide Service Delivery areas handled by Mark Michaelson. Number 468 MARK MICHAELSON, Coordinator, Service Delivery Area Program, Division of Community & Rural Development, Department of Community & Regional Affairs, said the packet of information before the committee needed to be viewed in the context under which programs and services were provided. The State Training & Employment Program was established six year ago in the attempt not to duplicate any existing programs or services offered by the federal program, but to complement and supplement. The administrative structure selected was one set up by the Job Training Partnership Act (JTPA). That particular federal program recognized three distinct areas in the state of Alaska: The Anchorage/ Mat-Su consortium, the Fairbanks Private Industry Council, and the statewide, which as Mr. Henderson indicated, is what the DCRA works with. The information before the committee references activity, expenditures and services provided within those three jurisdictions. He explained that he is a state employee located in Juneau, but his counterparts are not state employees; they are employees of the Fairbanks Productivity Improvement Center (PIC) and have an affiliation with the local government, as well as in Anchorage where there is an affiliation with the municipality of Anchorage. MR. MICHAELSON said that Representative Rokeberg had referenced some out of state expenses or training outside the state of Alaska and added that activity is not prohibited with the STEP program nor is it prohibited with the JTPA, the federal source; however, the policy taken is that people will only be sent to out of state training if comparable training for a particular occupation is not available for a particular individual and under some circumstances. For example, if the wait was going to be 9 to 12 months to get someone into a university program, then out of state training would be looked at. He added those decisions are made after an individual assessment of that particular person's request. The greatest amount of training takes place instate with Alaska institutions and often times with the support and participation of Alaskan businesses. REPRESENTATIVE ROKEBERG said it appeared to him that Anchorage or the Kenai Peninsula would be allocated under the statewide appropriation. He asked if the Department of Community & Regional Affairs was only a part of this program? MR. HENDERSON interjected he believed Representative Rokeberg was asking in terms of what Anchorage gets, how are the funds allocated to the geographical locations within the Anchorage area, how does Fairbanks allocate their funds, and how does the balance of the state allocate their funds. REPRESENTATIVE ROKEBERG said actually it's how much each area got. MR. MICHAELSON said the total allocation of the total STEP resources is determined by an unemployment figures formula applied by the Department of Labor. It's based upon population, unemployment and those types of data. He wasn't able to provide specific details, but thought perhaps representatives from the Department of Labor could provide additional information. REPRESENTATIVE ROKEBERG asked how much of the $3.4 million budget was paid by the employees of the state and how much by the federal government. MR. MICHAELSON responded with that particular budget, the entire cost is incurred by the State Training & Employment Program. There are additional programs and services made available through the federal Job Training Partnership Act. He asked committee members to bear in mind that the JTPA serves approximately 4 to 5 percent of those individuals potentially eligible, so there is not a plethora of resources and training dollars available for people who are looking for assistance. Number 674 CO-CHAIR BUNDE noted that Representative Rokeberg had asked how much was the student's responsibility. REPRESENTATIVE ROKEBERG interjected he was referring to employees of the state. He asked where was the money coming from? MR. HENDERSON said the unemployment insurance trust fund. One- tenth of one percent of the.... REPRESENTATIVE ROKEBERG asked if that was funded 100 percent? MR. HENDERSON said this comes directly from the unemployment insurance trust fund - one-tenth of 1 percent; the entire amount that is spent by the DCRA for this program comes from that fund. REPRESENTATIVE ROKEBERG asked if 100 percent of all these dollars are coming from the paychecks of the employees of this state or is there a federal contribution. MR. HENDERSON remarked he thought there was a federal contribution. REPRESENTATIVE ROKEBERG noted that the people of the state are paying a contribution. Number 748 REPRESENTATIVE DAVIS presented a scenario where AVTC in Seward wanted to establish a police training standards school, where all the state troopers, city policeman and correctional officers could be trained. He asked how they would go about getting funds for that, other than drawing from the those departments who have a current budget to do that. He said they pay for the training of troopers and correctional officers and then they give them a job. He asked how would that scenario fit in? MR. MICHAELSON said he could give Representative Davis a real life example that involved another industry. A few years ago with the advent of the community development quota program for the fisheries in the Bering Sea, AVTC wanted to participate and industry needed trained workers. There was an opportunity to put together a customized program for residents primarily in the Bering Sea coastal communities. AVTC bid on a competitive Request for Proposal. He noted the department lets their money out on a competitive RFP for approximately 70 percent of the training resources and the balance is made available for individual referral for a direct referral to a preexisting program. With the competitive RFP, AVTC did bid and was awarded training funds. In turn they provided a very valuable training program with in excess of 100 western Alaskans going through that program and being able to secure employment. REPRESENTATIVE DAVIS asked if there was an opportunity to charge a tuition, also? MR. MICHAELSON responded that was correct. Number 890 CO-CHAIR BUNDE commented that if there were a number of in-depth questions still remaining about this proposal, he would rather they be addressed to the various departments and the bill would be brought up again on Thursday, March 28. REPRESENTATIVE ROKEBERG stated he would like a breakdown on the statistics for the Anchorage area and the statewide delivery area. He was curious if the Kenai Peninsula and Mat-Su were considered part of the Anchorage delivery area or if they were part of the statewide area. He also requested information on the formula based on unemployment and population statistics. Number 933 CO-CHAIR BUNDE asked the representatives from the various departments to address Representative Rokeberg's questions. He announced that HB 435 would be held over until Thursday.