Legislature(1997 - 1998)
05/06/1997 04:08 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE May 6, 1997 4:08 p.m. MEMBERS PRESENT Representative Con Bunde, Chairman Representative Joe Green, Vice Chairman Representative Al Vezey Representative Brian Porter Representative Fred Dyson Representative J. Allen Kemplen Representative Tom Brice MEMBERS ABSENT All members present COMMITTEE CALENDAR SENATE BILL NO. 187 "An Act relating to disclosure of public records identifying a participant in the advance college tuition payment program; relating to the composition and assets of the Alaska advance college tuition payment fund; relating to administration of the advance college tuition payment program; relating to advance college tuition payment contracts; and providing for an effective date." - MOVED SB 187 OUT OF COMMITTEE CS FOR SENATE BILL NO. 164(HES) am "An Act relating to the authority of an emergency medical technician at the scene of an accident or emergency." - MOVED SCSSB 164(HES) am OUT OF COMMITTEE SENATE BILL NO. 149 "An Act relating to reports and audits concerning health care facilities; and providing for an effective date." - MOVED SB 149 OUT OF COMMITTEE CS FOR SENATE BILL NO. 189(FIN) "An Act relating to eligibility for and default, collection, and repayment of student loans; relating to non-renewal of certain occupational licenses for default on a student loan; and providing for an effective date." - MOVED SCSSB 189(FIN) OUT OF COMMITTEE SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 164 "An Act providing that employment as a legislator or with the National Education Association is not credited service under the teachers' retirement system; prohibiting membership in the teachers' retirement system for holders of limited certificates; removing teachers holding limited certificates to teach Alaska Native language or culture from membership in the teachers' retirement system; and repealing a provision permitting members of the teachers' retirement system to count unused sick leave credit as credited service." - HEARD AND HELD *HOUSE BILL NO. 169 "An Act relating to welfare to work tax credits under the Alaska Net Income Tax Act; and providing for an effective date." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: SB 187 SHORT TITLE: UNIVERSITY TUITION PAYMENT PROGRAM SPONSOR(S): SENATOR(S) WILKEN JRN-DATE JRN-DATE ACTION 04/25/97 1483 (S) READ THE FIRST TIME - REFERRAL(S) 04/25/97 1484 (S) HES 04/28/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205 04/28/97 1509 (S) HES RPT 5DP 04/28/97 1509 (S) DP: WILKEN, LEMAN, WARD, ELLIS, GREEN 04/28/97 1510 (S) ZERO FISCAL NOTE (UA) 04/29/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203 04/29/97 1543 (S) RULES TO CALENDAR 4/29/97 04/29/97 1549 (S) READ THE SECOND TIME 04/29/97 1549 (S) ADVANCED TO THIRD READING UNAN CONSENT 04/29/97 1549 (S) READ THE THIRD TIME SB 187 04/29/97 1550 (S) PASSED Y17 N- E3 04/29/97 1550 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 04/29/97 1557 (S) TRANSMITTED TO (H) 04/30/97 (H) MINUTE(HES) 04/30/97 (H) MINUTE(HES) 04/30/97 1394 (H) READ THE FIRST TIME - REFERRAL(S) 04/30/97 1394 (H) HES 05/01/97 1455 (H) HES REFERRAL WAIVED/WITHDRAWN 05/02/97 (H) HES AT 3:30 PM CAPITOL 106 05/02/97 (H) MINUTE(HES) 05/06/97 (H) HES AT 4:00 PM CAPITOL 106 BILL: SB 164 SHORT TITLE: AUTHORITY OF EMERGENCY MED TECHS SPONSOR(S): SENATOR(S) WILKEN,Lincoln,Mackie,Leman,Pearce,Green,Sharp,Taylor Kelly,Miller JRN-DATE JRN-DATE ACTION 04/09/97 1054 (S) READ THE FIRST TIME - REFERRAL(S) 04/09/97 1054 (S) HES 04/16/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205 04/16/97 (S) MINUTE(HES) 04/18/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205 04/18/97 (S) MINUTE(HES) 04/18/97 1274 (S) HES RPT CS 4DP SAME TITLE 04/18/97 1275 (S) DP: WILKEN, WARD, LEMAN, ELLIS 04/18/97 1275 (S) ZERO FISCAL NOTE TO SB & CS (DHSS) 04/22/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203 04/22/97 1385 (S) RULES TO CALENDAR 4/22/97 04/22/97 1423 (S) READ THE SECOND TIME 04/22/97 1423 (S) HES CS ADOPTED UNAN CONSENT 04/22/97 1423 (S) PLACED AT BOTTOM OF CALENDAR 04/22/97 1432 (S) HELD IN SECOND READING TO 4/23/97 CAL 04/23/97 1449 (S) AM NO 1 ADOPTED UNAN CONSENT 04/23/97 1449 (S) ADVANCED TO THIRD READING UNAN CONSENT 04/23/97 1450 (S) READ THE THIRD TIME CSSB 164(HES) AM 04/23/97 1450 (S) COSPONSOR(S): LINCOLN, MACKIE, LEMAN, 04/23/97 1450 (S) PEARCE, GREEN, SHARP, TAYLOR, 04/23/97 1450 (S) KELLY, MILLER 04/23/97 1450 (S) PASSED Y20 N- 04/23/97 1454 (S) TRANSMITTED TO (H) 04/24/97 1317 (H) READ THE FIRST TIME - REFERRAL(S) 04/24/97 1317 (H) HES 05/02/97 (H) HES AT 3:30 PM CAPITOL 106 05/02/97 (H) MINUTE(HES) 05/06/97 (H) HES AT 4:00 PM CAPITOL 106 BILL: SB 149 SHORT TITLE: HEALTH CARE FACILITY AUDITS & REPORTS SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES BY REQUEST JRN-DATE JRN-DATE ACTION 04/25/57 (S) RLS AT 10:45 AM FAHRENKAMP RM 203 03/24/97 833 (S) READ THE FIRST TIME - REFERRAL(S) 03/24/97 833 (S) HES, FIN 04/04/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205 04/04/97 (S) MINUTE(HES) 04/04/97 984 (S) HES RPT 1DP 4NR 04/04/97 984 (S) DP: WILKEN 04/04/97 984 (S) NR: WARD, LEMAN, ELLIS, GREEN 04/04/97 984 (S) ZERO FISCAL NOTE (DHSS) 04/22/97 (S) FIN AT 9:00 AM SENATE FINANCE 532 04/22/97 1383 (S) FIN RPT 6DP 04/22/97 1383 (S) DP: PEARCE, SHARP, PHILLIPS, ADAMS 04/22/97 1383 (S) DP: TORGERSON, DONLEY 04/22/97 1384 (S) PREVIOUS ZERO FN (DHSS) 04/25/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203 04/25/97 1478 (S) RULES TO CALENDAR 4/25/97 04/25/97 1486 (S) READ THE SECOND TIME 04/25/97 1486 (S) ADVANCED TO THIRD READING UNAN CONSENT 04/25/97 1486 (S) READ THE THIRD TIME SB 149 04/25/97 1487 (S) PASSED Y19 N1 04/25/97 1487 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 04/25/97 1495 (S) TRANSMITTED TO (H) 04/28/97 1357 (H) READ THE FIRST TIME - REFERRAL(S) 04/28/97 1357 (H) HES, FINANCE 05/02/97 (H) HES AT 3:30 PM CAPITOL 106 05/02/97 (H) MINUTE(HES) 05/06/97 (H) HES AT 4:00 PM CAPITOL 106 BILL: SB 189 SHORT TITLE: EDUC.LOAN REPAYMNT\ELIG.; OCC. LIC. SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES BY REQUEST JRN-DATE JRN-DATE ACTION 04/25/97 1484 (S) READ THE FIRST TIME - REFERRAL(S) 04/25/97 1484 (S) HES, FIN 04/30/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205 04/30/97 1568 (S) HES RPT 4DP 04/30/97 1568 (S) DP: WILKEN, LEMAN, ELLIS, GREEN 04/30/97 1568 (S) FISCAL NOTES (DOE-2, LABOR-2) 04/30/97 1568 (S) ZERO FISCAL NOTES (DCED, ADM, LABOR) 05/01/97 (S) FIN AT 9:00 AM SENATE FINANCE 532 05/01/97 (S) MINUTE(FIN) 05/02/97 (S) RLS AT 3:15 PM FAHRENKAMP RM 203 05/02/97 1644 (S) FIN RPT CS 4DP 2NR SAME TITLE 05/02/97 1644 (S) DP: SHARP, PEARCE, PHILLIPS, TORGERSON 05/02/97 1644 (S) NR: PARNELL, DONLEY 05/02/97 1644 (S) PREVIOUS FNS APPLY (DOE-2, LABOR-2) 05/02/97 1644 (S) PREVIOUS ZERO FNS APPLY (DCED, ADM, LAB) 05/05/97 1678 (S) RULES TO CALENDAR 5/5/97 05/05/97 1687 (S) READ THE SECOND TIME 05/05/97 1687 (S) FIN CS ADOPTED UNAN CONSENT 05/05/97 1688 (S) ADVANCED TO THIRD READING UNAN CONSENT 05/05/97 1688 (S) READ THE THIRD TIME CSSB 189(FIN) 05/05/97 1688 (S) PASSED Y19 N- E1 05/05/97 1688 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 05/05/97 1700 (S) TRANSMITTED TO (H) 05/06/97 (H) HES AT 4:00 PM CAPITOL 106 BILL: HB 164 SHORT TITLE: TEACHERS RETIREMENT: ELIGIB. & SICK LEAVE SPONSOR(S): REPRESENTATIVE(S) VEZEY JRN-DATE JRN-DATE ACTION 02/27/97 510 (H) READ THE FIRST TIME - REFERRAL(S) 02/27/97 510 (H) CRA, HES, STATE AFFAIRS 03/10/97 607 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS 03/10/97 607 (H) CRA, HES, STATE AFFAIRS 03/12/97 (H) CRA AT 8:00 AM CAPITOL 124 03/12/97 (H) MINUTE(CRA) 03/19/97 (H) CRA AT 8:00 AM CAPITOL 124 03/19/97 (H) MINUTE(CRA) 04/02/97 (H) CRA AT 8:00 AM CAPITOL 124 04/02/97 (H) MINUTE(CRA) 04/07/97 (H) CRA AT 8:00 AM CAPITOL 124 04/07/97 (H) MINUTE(CRA) 04/09/97 (H) MINUTE(CRA) 04/11/97 (H) CRA AT 8:00 AM CAPITOL 124 04/11/97 (H) MINUTE(CRA) 04/11/97 1077 (H) CRA RPT CS(CRA) NT 2DP 5NR 04/11/97 1077 (H) DP: SANDERS, KOOKESH 04/11/97 1077 (H) NR: OGAN, IVAN, DYSON, RYAN, JOULE 04/11/97 1078 (H) ZERO FISCAL NOTE (ADM) 04/11/97 1078 (H) REFERRED TO HES 05/02/97 (H) HES AT 3:30 PM CAPITOL 106 05/02/97 (H) MINUTE(HES) 05/06/97 (H) HES AT 4:00 PM CAPITOL 106 BILL: HB 169 SHORT TITLE: WELFARE TO WORK TAX CREDITS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-DATE ACTION 03/05/97 543 (H) READ THE FIRST TIME - REFERRAL(S) 03/05/97 543 (H) HES, STATE AFFAIRS, FINANCE 03/05/97 543 (H) INDETERMINATE FISCAL NOTE (DHSS) 03/05/97 543 (H) FISCAL NOTE (REV) 03/05/97 543 (H) ZERO FISCAL NOTE (LABOR) 03/05/97 543 (H) GOVERNOR'S TRANSMITTAL LETTER 05/02/97 (H) HES AT 3:30 PM CAPITOL 106 05/02/97 (H) MINUTE(HES) 05/06/97 (H) HES AT 4:00 PM CAPITOL 106 WITNESS REGISTER ELIZABETH HAGEVIG, Legislative Assistant to Senator Wilken Alaska State Legislature Capitol Building, Room 510 Juneau, Alaska 99801 Telephone: (907) 465-3709 POSITION STATEMENT: Provided sponsor statement for SCSSB 164(HES) am TOM DEAN, Chief Emergency Medical Services of Tok P.O. Box 811 Tok, Alaska 99780 Telephone: (907) 883-5873 POSITION STATEMENT: Testified in support of SCSSB 164(HES) am MARK JOHNSON, Chief Community Health and Emergency Medical Services Division of Public Health Department of Health and Social Services P.O. Box 110616 Juneau, Alaska 99811-0616 Telephone: (907) 465-3027 POSITION STATEMENT: Testified in support of SCSSB 164(HES) am GARREY PESKA, Lobbyist Alaska State Hospital/Nursing Homes (ASHNHA) 319 Seward Street Juneau, Alaska 99801 Telephone: (907) 586-1790 POSITION STATEMENT: Testified in support of SB 149 JAY LIVEY, Deputy Commissioner Office of the Commissioner Department of Health and Social Services P.O. Box 110601 Juneau, Alaska 99811-0601 Telephone: (907) 465-3030 POSITION STATEMENT: Testified in support of SB 149 MARTIN SCHULTZ, Assistant Attorney General Government Affairs Section Civil Division Department of Law 1031 West Fourth Avenue, Suite 200 Anchorage, Alaska 99501-1994 Telephone: (907) 269-5100 POSITION STATEMENT: Testified on SB 149 GLENN GUSTAFSON. Assistant Attorney General Government Affairs Section Civil Division Department of Law 1031 West Fourth Avenue, Suite 200 Anchorage, Alaska 99501 Telephone: (907) 269-5150 POSITION STATEMENT: Testified on SB 149 SHEILA PETERSON, Legislative Assistant to Senator Wilken Alaska State Legislature Capitol Building, Room 510 Juneau, Alaska 99801 Telephone: (907) 465-3762 POSITION STATEMENT: Provided sponsor statement on SCSSB 189(FIN) DIANE BARRANS, Executive Director Postsecondary Education Commission Department of Education 3030 Vintage Boulevard Juneau, Alaska 99801-7109 Telephone: (907) 465-6740 POSITION STATEMENT: Testified in support of SCSSB 189(FIN) TERESA WILLIAMS, Assistant Attorney General Fair Business Practices Section Civil Division Department of Law 1031 West Fourth Avenue, Suite 200 Anchorage, Alaska 99501 Telephone: (907) 269-5150 POSITION STATEMENT: Testified on SCSSB 189(FIN) SENATOR GARY WILKEN Alaska State Legislature Capitol Building, Room 510 Juneau, Alaska 99801 Telephone: (907) 465-3762 POSITION STATEMENT: Sponsor of SCSSB 189(FIN) BILL CHURCH, Retirement and Benefits Manager Division of Retirement and Benefits Department of Administration P.O. Box 110203 Juneau, Alaska 99811-0203 Telephone: (907) 465-4460 POSITION STATEMENT: Testified on HB 164 JOHN CYR, President National Education Association-Alaska (NEA-Alaska) 114 Second Street Juneau, Alaska 99801 Telephone: (907) 586-3090 POSITION STATEMENT: Testified against HB 164 JIM NORDLUND, Director Division of Public Assistance Department of Health and Social Services P.O. Box 110640 Juneau, Alaska 99811-0640 Telephone: (907) 465-3347 POSITION STATEMENT: Testified on HB 169 JOSEPH FRIEDMAN, Director Trade Dollar Exchange 3820 Lake Otis Anchorage, Alaska 99508 Telephone: (907) 562-8300 POSITION STATEMENT: Testified in support of HB 169 ANGELA SALERNO, Executive Director National Association of Social Workers of Alaska (NASW) 525 Main Street Juneau, Alaska 99801 Telephone: (907) 586-4438 POSITION STATEMENT: Testified in support of HB 169 BOB BARTHOLOMEW, Deputy Director Income and Excise Audit Division Department of Revenue P.O. Box 110420 Juneau, Alaska 99501-0420 Telephone: (907) 465-2320 POSITION STATEMENT: Testified on HB 169 PAM LaBOLLE, President Alaska Chamber of Commerce 217 Second Street Juneau, Alaska 99801 Telephone: (907) 586-2323 POSITION STATEMENT: Testified in support of HB 169 ACTION NARRATIVE TAPE 97-42, SIDE A Number 0000 CHAIRMAN CON BUNDE called the House Health, Education and Social Services Standing Committee meeting to order at 4:08 p.m. Members present at the call to order were Representatives Bunde, Vezey, Dyson and Kemplen. Representative Porter arrived at 4:14 p.m. Representatives Green and Brice arrived at 4:17 p.m. This meeting was teleconferenced to Anchorage, Mat-Su and Tok. SB 187 - UNIVERSITY TUITION PAYMENT PROGRAM Number 0032 CHAIRMAN BUNDE announced the first item on the agenda was SB 187, "An Act relating to disclosure of public records identifying a participant in the advance college tuition payment program; relating to the composition and assets of the Alaska advance college tuition payment fund; relating to administration of the advance college tuition payment program; relating to advance college tuition payment contracts; and providing for an effective date." He stated that the committee had heard the House companion bill. Number 0065 REPRESENTATIVE AL VEZEY made a motion to move SB 187 with individual recommendations and attached fiscal note. Hearing no objection SB 187 was moved out of the House Health, Education and Social Services Standing Committee. SCSSB 164(HES) am - AUTHORITY OF EMERGENCY MED TECHS Number 0087 CHAIRMAN GREEN announced the next item on the agenda was SCSSB 164(HES) am "An Act relating to the authority of an emergency medical technician at the scene of an accident or emergency." Number 0124 ELIZABETH HAGEVIG, Legislative Assistant to Senator Wilken, read the sponsor statement. She said SCSSB 164(HES) am repairs a long overdue shortcoming in our public safety network. Specifically, it provides Emergency Medical Technicians (EMT's), who belong to an ambulance service or a first responder service, with appropriate and relevant authority at the scene of an accident or other medical crisis, without creating potential conflict between emergency personnel. This bill is intended to protect EMT's who arrive first on the scene of an accident or medical emergency, or who are the only emergency responders to arrive for some time, as is the case in many rural areas. MS. HAGEVIG explained that currently, we ask EMT's to perform duties necessary to their job without giving them the proper legal authority to do so. Such duties include: controlling and directing activities at the scene of an accident; temporarily blocking or redirecting traffic to avoid the scene of an accident; trespassing upon property in order to respond to an emergency call; entering a building, including a private residence, or premises where report of an injury or illness has taken place; and directing the removal or destruction of a motor vehicle or other things in order to prevent further harm to injured or ill individuals. MS. HAGEVIG added that this legislation also works in concert with existing statutes, specifically AS 18.08.086, to add the scene control duties mentioned in SB 164 under the immunity from liability statute. Because the duties mentioned above are part of the overall pursuit of providing "emergency medical services," they would automatically apply for immunity from liability under AS 18.08.086 which frees EMT's from liability while "(administering) emergency medical services." Alaska relies heavily on its emergency medical personnel, especially in rural areas where law enforcement and fire personnel are relatively few in numbers. Just as we expect EMT's to protect our safety in an emergency situation, we should reciprocate this service, and give EMT's the proper legal authority to do their jobs without compromising their personal safety. Number 0313 TOM DEAN, Chief, Emergency Medical Services , testified next via teleconference from Tok. He said two years ago he found out that EMT's did not have the legal protection to do what they do. This bill will not make any changes in what they do, but will give EMT's legal authority and protection. Number 0380 MARK JOHNSON, Chief, Community Health and Emergency Medical Services, Division of Public Health, Department of Health and Social Services, said SCSSB 164(HES) am gives EMT's the same authority that fire officers currently have in state statute. Number 0419 REPRESENTATIVE FRED DYSON referred to line 8, page 2, and asked when it was necessary for EMT's to destroy a motor vehicle. Number 0380 MR. JOHNSON answered that it was sometimes necessary to remove a person from a vehicle. Number 0462 REPRESENTATIVE DYSON asked if this language was definitive. Number 0477 CHAIRMAN BUNDE asked what other language could be used to cover all situations. Number 0545 REPRESENTATIVE DYSON felt that the word, "damage," could be used. Number 0561 MR. DEAN commented that, in situations where they need to get a victim out of a vehicle, the vehicle is pretty well destroyed anyway. In instances where a person is caught in machinery, the machinery needs to be damaged in order to treat that person. Number 0615 MS. HAGEVIG explained that this question did not come up before, but the language included in the bill was directly taken from the statute providing authority to fire fighters. REPRESENTATIVE BRIAN PORTER made a motion to move SCSSB 164(HES) am, version \B.a from committee with individual recommendations and zero fiscal note. Hearing no objection SCSSB 164(HES) am was moved from the House Health, Education and Social Services Standing Committee. SB 149 - HEALTH CARE FACILITY AUDITS & REPORTS Number 0749 CHAIRMAN BUNDE announced the next item on the agenda was SB 149, "An Act relating to reports and audits concerning health care facilities; and providing for an effective date." Number 0771 GARREY PESKA, Lobbyist, Alaska State Hospital/Nursing Homes (ASHNHA), said that several proposed decisions by hearing officers have called into question whether or not Medicaid audits may be used to set hospital rates for Medicaid reimbursement. Federal law requires that the state perform audits of hospitals for Medicaid purposes. They believe SB 149 is necessary to allow this process to work properly and they support the bill. Number 0811 JAY LIVEY, Deputy Commissioner, Office of the Commissioner, Department of Health and Social Services, stated that the Administration has worked with ASHNHA on this bill and also support SB 149. Number 0833 MARTIN SCHULTZ, Assistant Attorney General, Government Affairs Section, Civil Division, Department of Law, testified next via teleconference from Anchorage. He represents the Department of Health and Social Services (DHSS) in some of the litigation referred to by Mr. Peska. Number 0824 CHAIRMAN BUNDE asked him if he saw any problems with SB 149 and its aims. MR. SCHULTZ answered that SB 149 was a good bill. Medicaid is a federal/state matching fund program which means that the state needs to conform to federal law. Federal law requires Medicaid audits. Audits produce accurate and useful information based on the historical costs of the facility. Medicaid rates are based on these historic rates. Number 0900 GLENN GUSTAFSON, Assistant Attorney General, Government Affairs Section, Civil Division, Department of Law, testified next via teleconference from Anchorage. He represents Medicaid agency staff in the administrative proceedings where subject rulings are issued by the hearing examiner. Number 0935 REPRESENTATIVE DYSON made a motion to move SB 149 out of committee with individual recommendations and zero fiscal note. Hearing no objection SB 149 was moved from the House Health, Education and Social Services Standing Committee. SCSSB 189(FIN) - EDUC.LOAN REPAYMNT\ELIG.; OCC. LIC. Number 0960 CHAIRMAN BUNDE announced the next item on the agenda was SCSSB 189(FIN), "An Act relating to eligibility for and default, collection, and repayment of student loans; relating to non-renewal of certain occupational licenses for default on a student loan; and providing for an effective date." Number 0965 SHEILA PETERSON, Legislative Assistant to Senator Wilken, explained that Senator Wilken was a member of the Senate Finance Subcommittee on Education. As a member he reviewed the Alaska Commission on Postsecondary Education which services a large number of loans, approximately $60 million to $70 million this year. The amount of loans in default is about 18 percent. The bill will make the Alaska Commission of Postsecondary Education more stable and businesslike. It provides the necessary financial tools to effectively and efficiently reduce the number of loans that are in default. Currently the average age of the loan applicant is 27- years-old, these people are in the work place and should be responsible for paying back their loans. MS. PETERSON said that Smith-Barney reviewed the commission and made several recommendations; some of which are embodied in SCSSB 189(FIN). Senator Wilken wanted the committee to realize that when Smith-Barney reviewed the commission's work they indicated that a majority of the commission's time is spent on servicing loans that are in default. It is hoped that with passage of SCSSB 189(FIN), these loans will be under control and the loan program can be available to the next generation of Alaskans. Number 1094 REPRESENTATIVE J. ALLEN KEMPLEN asked how the program of non- renewal for occupational licenses worked. Number 1104 MS. PETERSON answered that the program was patterned after the child support enforcement program. Number 1151 DIANE BARRANS, Executive Director, Postsecondary Education Commission, Department of Education, said the commission is supportive of this legislation. Commission staff were asked to identify some effective tools in other student loan programs for collection of defaulted loans. These tools are referenced in the bill before the committee. She explained that occupational licenses are renewed on about a three year cycle. The licenses, on which the commission currently intervenes, are administered by the Division of Occupational Licensing. The commission sends a notice, at least four to six months in advance of a licensee's renewal date, to let them know that there is a problem with their student loan which could interfere with the reissuance of their license. The commission then works with the borrowers to try to come into compliance with some payment arrangement if they are not in the position of fully paying the amount in arrears. This program has proven itself effective. This bill would expand this program to include teachers who are licensed by the Department of Education and some occupational licenses that are handled by the Department of Labor. Anyone licensed to practice an occupation by the state of Alaska would have to repay their Alaska student loan debt. Number 1260 REPRESENTATIVE KEMPLEN asked if the commission received many complaints about this process. Number 1264 MS. BARRANS answered that the commission did not receive many complaints, but the few complaints they received were loud. Those who decided to fight this process, rather than comply with it, felt very strongly that their student loan debt and their default status should not be something which should keep them from being licensed by the state. This program encourages borrowers to stay in good standing with their loan. Number 1297 REPRESENTATIVE KEMPLEN asked how many people were affected by this process. Number 1302 MS. BARRANS believed that, within the last year and a half that this process was used, it involved fewer than 150 individuals. Of those individuals, all but 19 have managed to come to some repayment agreement. She stated that she would send exact figures to the committee as she was relying on memory. Number 1335 CHAIRMAN BUNDE cited an example from when he served on the commission. One appeal involved a gentlemen who had suffered a head injury, had completed at least two undergraduate degrees and perhaps one or two postgraduate degrees. This person claimed an exemption from having to repay his loan because of the head injury. He expressed concern that the loan program will be gone in six to eight years if the default rate is not stopped. The commission does not take in as much money as is paid out. Number 1383 TERESA WILLIAMS, Assistant Attorney General, Fair Business Practices Section, Civil Division, Department of Law, testified next via teleconference from Anchorage. She said this bill is legally defensible, it is an excellent bill. Number 1395 CHAIRMAN BUNDE asked Ms. Barrans to give a brief comparison between the requirements to apply for and receive a student loan now and how the process would change under SCSSB 189(FIN). Number 1421 MS. BARRANS explained that the process won't noticeably change in the paperwork completed by the loan applicant. Applicants fill out forms, they are sent to the commission and the applicants are notified about whether or not they have received an award. The bill would add a credit assessment to that process. The commission feels this process would be relatively inexpensive and could be done electronically. If the commission finds that the borrower has an egregious bad credit history, the commission would offer them the opportunity to have a credit worthy co-signer on their note. MS. BARRANS added that the commission aggressively pursues defaulted borrowers, but these are unsecured loans with nothing tangible for the commission to repossess. The commission relies on tools such as the Permanent Fund Dividend garnishment which has proven to be very effective. In addition, the commission sends out written correspondence and makes phone calls. This bill would allow the commission to expand their use of the professional and occupational licensing tool and to do an administrative wage garnishment. Currently the commission can go through the full legal court process of getting a judgement against someone in order to get a garnishment of wages. As this is expensive and time consuming, collection agencies will often look at the size of the debt and make a judgmental decision of whether or not it is worth the cost. The commission would be able to do it across the board, through the administrative wage garnishment process. Number 1520 CHAIRMAN BUNDE asked about the future notification regarding the changes in the promissory note. Number 1528 MS. BARRANS answered that the commission wants to provide due notice up front whenever possible and use this as a disincentive for borrowers to fall into delinquency status. She pointed out that there is a provision in SCSSB 189(FIN) which would allow a half percent interest increase. This increase would not go into effect until the 1998-1999 school year as the commission is well into the application process for the 1997-1998 school year. The current interest rate is 8.6 percent. Number 1557 CHAIRMAN BUNDE asked if the 8.6 percent was contingent on the prime plus rate. Number 1564 MS. BARRANS answered that it is the average interest rate which the commission is paying on all of the bonds that are outstanding. Whatever the corporation is paying, the commission charges the average of that plus a 2.5 percent administrative add-on. Number 1574 CHAIRMAN BUNDE clarified that this amount did not pay for all of the administrative costs. Number 1580 REPRESENTATIVE KEMPLEN presented a scenario where someone is working in an occupation that requires a license. This person runs into a difficult time in life and they end up in arrears for six months or more. He asked how the commission would accommodate that type of situation. Number 1631 MS. BARRANS explained that there are a number of provisions to deal with those real life situations. The key is having the borrower contact the commission before they are in arrears. If someone is struggling to make payments, the commission would contact them through the due diligence process. There are unemployment deferments, medical deferments and other mechanisms in place to provide protection to someone in that situation. If that person fails to communicate with the commission, they could find themselves in a position of having lost a number of those protections found within their promissory note. If someone filed for bankruptcy, the commission ceases all repayment or collection on those accounts. Number 1685 CHAIRMAN BUNDE asked for a chronology of what the commission does when a payment is overdue. Number 1690 MS. BARRANS answered that the commission has an automated roster system with staff who focus on communicating with delinquent or defaulted borrowers. These staff focus on making phone calls and getting written correspondence out. The monthly billing statement continues to go out indicative of the growing seriousness of their arrearage. Additionally, due diligence letters are sent when the borrower is two months past due. These type of letters continue every 30 days at the same time. Telephone contact is made to the borrower. In a given month the commission will make about 6,000 phone calls to those borrowers who are delinquent and heading towards default. There is a serious attempt to avert the crisis point on the loan. CHAIRMAN BUNDE announced the presence of Senator Wilken. Number 1743 REPRESENTATIVE PORTER commented that, in his experience with law enforcement, 10 percent of people could not be rehabilitated. He noted that this same number applied to people who defaulted on their loans. He mentioned that his children all used this program and that he hoped the program was around so that his grandchildren could use it as well. Number 1798 REPRESENTATIVE DYSON made a motion to move SCSSB 189(FIN) out of committee with individual recommendations and attached fiscal notes. Hearing no objections SCSSB 189(FIN) was moved from the House Health, Education and Social Services Standing Committee. HB 164 - TEACHERS RETIREMENT: ELIGIB. & SICK LEAVE Number 1824 CHAIRMAN BUNDE announced the next item on the agenda was HB 164, "An Act providing that employment as a legislator or with the National Education Association is not credited service under the teachers' retirement system; prohibiting membership in the teachers' retirement system for holders of limited certificates; removing teachers holding limited certificates to teach Alaska Native language or culture from membership in the teachers' retirement system; and repealing a provision permitting members of the teachers' retirement system to count unused sick leave credit as credited service." REPRESENTATIVE AL VEZEY, Sponsor of HB 164, said the bill is a result of the review of the annual report of the teacher retirement system (TRS). A statute provides that a person who is a member of TRS may elect to continue participating in TRS if they become an elected legislator. He felt this was a legislative privilege. The TRS is substantially different from the Public Employee Retirement System (PERS) as it costs more money and accrues more benefits at a faster rate. He felt this inequity should be removed from the statute. REPRESENTATIVE VEZEY said HB 164 also removes the ability of National Education Association-Alaska (NEA-Alaska) members to participate in TRS. He understood that NEA-Alaska did not object to this language. He added that there is also a statutory mandate which local school districts grant to teachers of the option, at no cost to the teacher, of taking their unused sick leave and having the employee's and the employer's contribution rates to accumulate additional retirement benefits. He did not feel it was in the best interest of the local school district to continue this mandate. He felt the school districts were perfectly capable of bargaining these units with the teachers. Taking this provision out of statute would return more control to the local school districts. Number 1938 CHAIRMAN BUNDE declared his conflict as he was a teacher and now he is a legislator. He asked Mr. Church how former teachers would be impacted by HB 164. BILL CHURCH, Retirement and Benefits Manager, Division of Retirement and Benefits, Department of Administration, explained that anyone hired into TRS before passage of HB 164 would still be covered in the same way. It would only affect those individuals who are enrolled in TRS after the passage of HB 164. Those individuals would begin to accrue credit under PERS and would not being accruing credit under TRS. CHAIRMAN BUNDE asked if someone who was currently a teacher and then is elected to the legislature would go into PERS as compared to the current system where a teacher, elected to the legislature, continues in the TRS system. Number 1973 MR. CHURCH answered that the person could elect to continue in TRS. Number 2012 REPRESENTATIVE VEZEY stated that if you are participating under TRS, then a 2 percent or a 2.25 percent retirement amount is being accrued based on the salary of a teacher as compared to the legislative salary. A legislator who is accruing money in the TRS system is accruing 2.5 times as much as other legislators. Number 2030 MR. CHURCH explained that under PERS an individual will accrue benefits at 2 percent for the first ten years, 2.25 percent for the second ten years and 2.5 percent for each year over 20 years. In TRS, it is 2 percent for the first 20 years and then 2.5 percent for each year of accrual after the 20 years. The benefit will be based on the average of the high three salaries in TRS. Presently a new employee would have their benefit based on the average of the high five consecutive years. The PERS has increased multipliers so at the end of the 20 years you have little bit higher percentage base. Number 2069 REPRESENTATIVE PORTER asked about obtaining credit at service time for cashing in unused sick leave. He asked if this was sick leave that did not have a cash value in the first place. Number 2079 MR. CHURCH was not sure whether or not there was a cash value within each district. This is unused sick leave which is not cashed out, it is on the books at the time that the member retires. This sick leave may be claimed by the teacher. Number 2096 REPRESENTATIVE PORTER asked if there were other bargaining units which had that provision. Number 2098 MR. CHURCH answered that he was not aware of any others. Number 2101 CHAIRMAN BUNDE asked if the terminology had changed, if it had gone from sick leave to personal leave or if it depended on the school district. Number 2107 MR. CHURCH explained that there is a difference between sick leave, annual leave and the personal leave concept. Personal leave rolls in both annual and sick leave. There is a higher accrual rate and the leave can be used for any purpose. All of this leave can be cashed-out on separation of state service. He stated that there is a cash value for personal leave. The state system allows a person to cash-out their annual leave upon termination, but the sick leave is lost. Number 2132 REPRESENTATIVE KEMPLEN asked how long it would take a person to be vested in the PERS system. Number 2162 MR. CHURCH answered that it took five years to be vested in the PERS system for retirement benefits. Number 2192 REPRESENTATIVE KEMPLEN clarified that a representative would have to be elected for three terms in order to be vested. He felt there was a disincentive to run for office if a person only wanted to serve for two terms. MR. CHURCH mentioned that elected officials could choose whether or not they wanted to participate in PERS. A person could choose to continue in TRS, working after session for a semester with their district. Number 2221 CHAIRMAN BUNDE commented that if this person worked for the university there is a strong constitutional prohibition against continuing their work while they are a legislator. MR. CHURCH added that this was also applicable for a legislator working for the state. TAPE 97-42, SIDE B Number 0000 REPRESENTATIVE KEMPLEN said it was a disincentive for teachers to run for public office, unless they planned on being there long enough to become vested in PERS. Number 0014 MR. CHURCH explained that is certainly would depend on how many years the teacher had already accrued in TRS. It takes eight years to vest in TRS. If a person has 20 years of teaching in Alaska, they are eligible for retirement benefits. Number 0044 CHAIRMAN BUNDE asked whether or not the employer had to match contributions for sick leaves used as retirement credit and, if this was the case, why wasn't there be a positive fiscal note. Number 0081 REPRESENTATIVE VEZEY explained that the statute calls for the employer, who is not the state of Alaska, to pay. This would not benefit the state financially. The statute calls for the employer to pay both the employee's and the employer's contribution. A person could debate that there would be a savings by the school district because they would be free to negotiate how to use that resource. Number 0123 MR. CHURCH said the division had asked their actuary to look at what would happen to the funding ratio if the unused sick leave provision was eliminated. The actuary estimated that the future contribution rate would be reduced by .36 over the next 25 years, which would decrease employer contributions by approximately $200,000 at the end of 25 years. Number 0158 REPRESENTATIVE VEZEY asked if the contribution rate of .36 was the past or current service rate. Number 0164 MR. CHURCH answered that this would be under the normal cost. It is part of the actuarial assumptions that go into establishing normal cost (Indisc.-coughing). Number 0177 CHAIRMAN BUNDE mentioned that the actuarial impact of HB 164 would have no positive or negative impact on TRS. MR. CHURCH answered that this would be correct. After 25 years there would be a decrease of .36. Number 0205 JOHN CYR, President, National Education Association-Alaska (NEA- Alaska), stated that his organization is in opposition to HB 164. Currently, there is one member of NEA-Alaska in TRS who is grandfathered-in and will continue to participate whether or not this bill passes. He explained that NEA-Alaska has been out of TRS for a number of years. MR. CYR felt it was wrong to set one class of public employees apart from another class. He presented a scenario where someone taught for 17 years and then ran for political office. If that person won, they would lose as they would have to wait until they reached age 55 to get retirement. A person employed by that school, who was not a teacher, would be able to continue in PERS. He felt this was a disincentive to public service. Number 0343 MR. CYR referred back to the time when schools were state operated, the legislature, through statute, found sick leave to be a benefit provided for teachers and for their districts. This sick leave has always been credited for retirement. Teachers do not collect annual leave or any of the other types of leave that PERS employees receive. A teacher can lose their job or their certificate if they misuse sick leave. The amount of money that has been set aside for teachers is an earned benefit, used towards retirement. This is a proper use of the state's resource and it provides a benefit to the districts, to children and to the membership. To put this benefit into an area to be bargained, district by district, is unworkable. He was not sure that the districts can bargain sections of the state retirement system. The state might not want individual districts bargaining for a provision that is owned by the state. MR. CYR added that secondarily, his organization does not know how it would work even if it could be done. Teachers have bargained half a dozen contracts. Every time a contract was bargained, there would be the potential of having a different group of people working in the same system who would be covered under a different way for sick leave. Alaska is a transient state. People move from district to district. Number 0506 MR. CYR felt HB 164 should not be passed. Teachers have a retirement system which is financially sound with a good retirement board. Number 0524 REPRESENTATIVE DYSON questioned whether or not HB 164 would be a disincentive for a teacher to run for the legislature. He asked how it would be more of a disincentive than someone in another profession. He did not know of any professions which would allow someone to become a legislator and continue their retirement benefits. Number 0560 MR. CYR explained that there is a difference between a public and a private sector employee. A private sector employee is free to charge as much as they can for the services they provide. He mentioned that many legislators choose to continue their own business outside of the legislature, accruing the benefits of their retirement package. Public service employees do not have that luxury. Number 0612 REPRESENTATIVE DYSON felt that teachers could choose to work in whatever district had the best schools, the best living environment, the best wages or the best benefits. People could go other places to teach, just as private employees can go to other places to work. Number 0655 MR. CYR stated that he is familiar with the facts and figures about the salaries of Alaskan teachers. Nevertheless, this bill takes away the TRS incentive to become a legislator and remain in TRS. An employee who is in PERS can choose to remain in PERS when they become a legislator. Number 0694 REPRESENTATIVE DYSON asked why that group should have a better deal than 99 percent of employees in the state who are working in the private sector. Number 0703 MR. CYR felt that this bill punishes a class of public employees for some very specific reasons and this was patently wrong. General conclusions can be drawn between the public and the private sector of where it should fit, how it should move, how the public sector should be compensated and what the retirement benefits should be across the board. He felt this was an apples and oranges issue. Number 0750 REPRESENTATIVE DYSON felt the state has been rewarding one group. Number 0773 REPRESENTATIVE PORTER expressed surprise at the spectrum of benefits which have been accrued by state employees. When he left his former job he couldn't continue his retirement system. He did not feel that all public employees had the ability to continue in their retirement system. He clarified that a PERS employee could continue their retirement system while they served as a legislator. Number 0823 MR. CYR believed this statement to be true. Legislators have the option to remain in PERS if they were a former state employee. Number 0831 REPRESENTATIVE PORTER did not feel this was appropriate. Number 0836 CHAIRMAN BUNDE clarified that legislators can choose to be under PERS. He asked for information on the Anchorage School District. Number 0880 MR. CYR explained that some school districts have bargained personal leave, they will have four or five days of leave which can be used for personal absences. He did not know of any district which has wrapped those two kinds of leave together into sick leave. Sick leave is provided by statute, 13 days per year. This sick leave transfers from district to district. Number 0930 CHAIRMAN BUNDE announced that this is the first time the committee has heard HB 164 and it will be held in order to find out what various districts do with their sick leave policies. HB 169 - WELFARE TO WORK TAX CREDITS Number 0963 CHAIRMAN BUNDE announced the next item on the agenda was HB 169, "An Act relating to welfare to work tax credits under the Alaska Net Income Tax Act; and providing for an effective date." Number 0967 JIM NORDLUND, Director, Division of Public Assistance, Department of Health and Social Services, stated that his division has a large responsibility to do in finding work opportunities for 4,000 individuals in the upcoming year. The division sees HB 169 as one of several tools which can be used to give employers the incentive to hire welfare recipients. This piece of legislation has had input from the Department of Revenue (DOR), Department of Law (DOL) and the Department of Administration. MR. NORDLUND explained that HB 169 targets welfare recipients and disadvantaged workers which include disabled persons receiving vocational rehabilitation, veterans receiving public assistance and ex-felons who are in low income families. The bill would assist recipients in finding work opportunities. The Anchorage Chamber of Commerce, the Alaska Chamber of Commerce, large and small employers have been approached about this type of legislation and those groups were all supportive of a tax credit. They see HB 169 as a measure which would provide some incentive for them to hire recipients. Number 1069 MR. NORDLUND commented that HB 169 piggybacks on the federal tax credit bill. This will assist employers with the administrative burden of applying for the credit. It is a relatively simple procedure to extend the credit that they would be getting on their federal income tax and apply it to their state income tax. He said HB 169 will have some state treasury costs, but it will yield greater benefits in terms of getting welfare recipients employed and off public assistance. Number 1118 JOSEPH FRIEDMAN, Director, Trade Dollar Exchange, testified next via teleconference from Anchorage. He was in support of HB 169 as it is an excellent opportunity to provide corporations with a tax credit and an incentive to participate in welfare to work issues. He said the Trade Dollar Exchange is a private industry initiative to involve small businesses in welfare to work programs. The Trade Dollar Exchange uses a system of bartering under the Tax Equity and Fiscal Responsibility Act of 1982. This act essentially says that if a business trades or barters, the income on their tax returns is tax deductible when spent on business expenses. Coupled with the federal work opportunities tax credit, this would provide a tremendous opportunity for the exchange to encourage businesses to be involved in hiring people going from welfare to work. He stated that there is a large number of workers who do not have the skills to compete at the current level of participation in the job market. He proposed an amendment which would provide a disregard for the Trade Dollar Exchange currency as it affects the earned income status for people receiving a cash benefit through the department. Number 1258 ANGELA SALERNO, Executive Director, National Association of Social Workers of Alaska (NASW), said that she was formerly employed as a job developer. She worked in the private sector for a company that contracted for Job Training Partnership Act dollars (JTPA) and, as a result, has some experience in the use of tax incentives as a way to assist candidates seeking work. This will help people get off welfare and into a work situation. The company used the Targeted Job Tax Credit, the federal tax credit. As a job developer it was advantageous for her to walk into an employer's office and state that not only is the candidate well-trained, but here is a tangible financial incentive. This incentive often shifted the balance for the employers because the candidate did not always appear to be the best candidate. She felt this would be the case for many of the people who need to placed into work situation. These people may have less experience, a checkered job history or something else. This incentive might be the needed impetus for that employer to hire this employee. MS. SALERNO explained that the employee would need to be on the job for a full six months before the employer received this incentive. This type of incentive will work. It is one of the few things that the state is doing to actually help welfare recipients find work. Number 1361 REPRESENTATIVE VEZEY asked if the state was subsidizing the cost of having an employee. He stated that this is not a substitute for creating jobs. Employers are not going to manufacture jobs in order to get 15 percent of what they spend. Number 1396 MS. SALERNO agreed and said HB 169 doesn't address this issue at all. This bill is going at the problem from a different angle. A financial incentive is another way to shift the balance to someone who may have a deficit in their ability find work. Number 1433 BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division, Department of Revenue, stated that the bigger spectrum was taken into consideration when developing the welfare to work tax credit. There are four or five bills in the legislature this year to try to do what Representative Vezey suggested, creating new jobs. He mentioned HB 63 and another small business tax credit as attempts to create these new jobs. Other bills tried to look at the other angle, HB 169 was meant to be one of many tools. Number 1487 MR. BARTHOLOMEW stated that the potential loss would be $1 million based on trying to put an estimated 880 people to work. The other component of HB 169 is that the state adopts the federal work incentive bill. This bill repeals the federal program in order to adopt a state program. Under the current tax, if an employee is hired in another state, employers can get tax credits off the Alaska tax. Business apportion their credit to their state taxes. This bill, HB 169, takes out that provision and no longer recognizes the federal credit. If a business hired someone in Alaska, they would get a federal tax credit as well as a state credit. Number 1557 CHAIRMAN BUNDE asked him to speculate on the net gain, what is the cost to keep 880 people on welfare. Number 1563 MR. BARTHOLOMEW answered that Mr. Nordlund's division looked at this in their 1998 budget. Some of the budget adjustments reflected trying to take people off the welfare rolls. The sense from the DOR standpoint is that it would be a net financial gain to the state. Number 1581 REPRESENTATIVE VEZEY repeated that HB 169 does not provide any new jobs. The bill provides a tax credit of $1,000 to $1,500 to provide an incentive to hire someone over someone else who might be better qualified. He asked if it would force that more competent person onto welfare. Number 1601 MR. BARTHOLOMEW stated that if this was the only bill, then this would be a potential scenario. There are development bills which project a small amount of job growth in Alaska and HB 169 fits into that projection. The state has made this an objective and it is a federal government mandate to reduce the welfare roles. This bill would give someone who is on welfare an advantage. Whether or not this advantage would be the final crux that beats out someone who hasn't been on welfare is a tough issue to call. He felt that this bill would help people who are disadvantaged. There has been a policy decision to move these people off welfare, the time that they can remain on welfare has been shortened. This bill suggests that the state needs to do something to help those people. He felt there could be a small possibility that it would harm other people looking for work who are not on welfare. Number 1664 CHAIRMAN BUNDE commented that it wouldn't be a welfare affirmative action program. Number 1668 REPRESENTATIVE KEMPLEN mentioned that HB 169 deals with the social issue of moving people off of welfare into the work place. He referred to a conference last week which dealt with welfare reform. One of the issues raised was turnover in entry level positions in the number of businesses located in the state. Welfare recipients need to learn basic skills. The purpose of welfare reform is to give those people who are on welfare those basic skills. Businesses need to have an incentive to bring those people into the workforce. Businesses will invest time in teaching these people how to be a good employee. This bill gives businesses some incentive to spend a little bit of extra time with these employees. REPRESENTATIVE KEMPLEN asked how the 880 figure was derived. Number 1782 MR. BARTHOLOMEW said that in discussions with the Department of Health and Social Services and the Department of Labor they did not have a good method of estimating an exact number. The tax credit only applies to tax paying corporations, a large number of employers don't pay taxes because of the size of their business. The tax code is only structured to tax a small percentage of businesses in Alaska. The DOR looked at how many businesses claimed the federal credit and what percentage of employees were hired. The DOR then backed these numbers and made them applicable to Alaska. Economic models were developed with an estimated range of 500 to 1,000 people who could be hired as a result of this incentive. No one had a comfort level of what this exact number should be. The 880 figure is a rough estimate. Number 1856 MR. BARTHOLOMEW explained that for wages, the credit is up to $1,000 with a $500 incentive if training is provided. The total tax incentive is $1,500. The DOR looked at what the federal credit provided and a discussion was held on how much of an incentive should the state be willing to provide to bring people into work. This involved a decision about what amount of treasury money the state would be willing to lose for someone who might obtain a job anyway. It also involved the idea that if you provide too big of an incentive, the balance is inappropriately tipped. The financial incentive started out smaller and as discussions were held the amount increased. The average firm on the federal credit was getting a $378 credit. The state will be providing a much bigger incentive than the federal program. Number 1920 REPRESENTATIVE KEMPLEN mentioned that one of the comments at the conference was that businesses felt the $1,500 wasn't enough of an incentive. Number 1967 PAM LaBOLLE, President, Alaska Chamber of Commerce, stated that her organization is supportive of this legislation. They feel that it doesn't create jobs, but member employers feel that there is a great deal of turnover and a related cost of bringing someone in with very little job experience. Given the opportunity to hire someone with experience over someone who doesn't, the business will chose the person with the experience so this incentive will not take a job away from a more qualified applicant. She wasn't sure how many businesses would qualify for the tax credit, but the bottom line is that HB 169 provides a credit for the extra effort of training someone who doesn't have any experience. She stated business' concerns over the education system in Alaska. TAPE 97-43, SIDE A Number 0000 REPRESENTATIVE GREEN asked if there would be merit in having a business develop a five year plan to avoid the large turnover. Number 0036 MS. LaBOLLE answered that these employers with the large turnover have struggled with how to reduce training costs. At the conference mentioned by Representative Kemplen, businesses mentioned a $2,500 per employee training cost with a 60 percent turnover. Number 0085 REPRESENTATIVE GREEN suggested that if just a small fraction was added to the wage, then that $2,500 would be stretched over a long period and turnover would be reduced. Number 0098 MS. LaBOLLE answered that it is the nature of the type of employee that causes the turnover. Number 0130 REPRESENTATIVE VEZEY asked the average wage or pay scale. He said that all the information he has seen indicates that our welfare payment is far above any entry level wage. He wondered how the state was going to get people to take an entry level job. Number 0185 MS. LaBOLLE felt that welfare recipients were not going to have a choice. The welfare program is going to disappear from under these recipients and then they will have to work. Number 0202 REPRESENTATIVE VEZEY asked why the state would need to pay an incentive to employers. Number 0216 MS. LaBOLLE clarified that the incentive would go to the employer. The state is trying to find places to put people who must come off the welfare rolls. The bill encourages businesses to consider those people. Number 0266 REPRESENTATIVE VEZEY stated that if those people are forced to go out into the job market, then why does the state need to pay the employer an incentive to hire them. Number 0291 MS. LaBOLLE answered that some businesses say this labor pool is not that large because of the job turnover. There isn't an abundance of people in that labor pool. Number 0314 REPRESENTATIVE VEZEY responded that we haven't kicked people off of welfare yet. Number 0317 MS. LaBOLLE answered that this labor pool will not be large, even when welfare is cut. Businesses expect that people who come off welfare will go into these basic, entry level positions. REPRESENTATIVE VEZEY stated that this was his point. He questioned why the state needed to pay businesses to hire someone they are looking to hire. Number 0339 CHAIRMAN BUNDE announced that this was the first time this bill was heard and it would be held for the committee's consideration. ADJOURNMENT There being no further business to conduct, CHAIRMAN BUNDE adjourned the meeting of the House Health, Education and Social Services Standing Committee at 5:42 p.m.