Legislature(1995 - 1996)

03/26/1996 03:04 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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               
 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                       
 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                     
 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            
 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              
 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            
 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.                      

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