Legislature(1995 - 1996)
04/18/1996 03:05 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 18, 1996
3:05 p.m.
TAPES
SFC-96, #86, Side 1
SFC-96, #86, Side 2 Malfunction
No Recording
SFC-96, #87, Sides 1 and 2
SFC-96, #88, Side 1 to (334)
CALL TO ORDER
Senator Rick Halford, Co-chairman, convened the meeting at
approximately 3:05 p.m.
PRESENT
In addition to Co-chairman Halford, Senators Donley,
Phillips, Rieger, Sharp, and Zharoff were present. Co-
chairman Frank arrived shortly after the meeting began.
ALSO ATTENDING: Senator Green; Karen Perdue, Commissioner,
Dept. of Health and Social Services; Kristen Bomengen,
Assistant Attorney General, Human Services Section, Dept. of
Law; Elmer Lindstrom, Special Assistant, Dept. of Health and
Social Services; Dwight Perkins, Special Assistant, Dept. of
Labor; Lamar Cotten, Deputy Commissioner, Dept. of Community
and Regional Affairs; Remond Henderson, Director, Division
of Administrative Services, Dept. of Community and Regional
Affairs; Arbe Williams, Director, Division of Administrative
Services, Dept. of Labor; Curt Lomas, Welfare Reform
Program, Division of Public Assistance, Dept. of Health and
Social Services; Glenda Straube, Director, Child Support
Enforcement Division, Dept. of Revenue; Mike Tibbles, aide
to Senator Green; and aides to committee members and other
members of the legislature.
SUMMARY INFORMATION
SB 98 - WELFARE REFORM: TEMPORARY ASSIST. PROGRAM
Discussion was had with Senator Green,
Commissioner Perdue, Kristen Bomengen, Glenda
Straube, and Curt Lomas. Amendments 3, 4(c), 6,
8, 9, and 10 were ADOPTED. CSSB 98 (Fin) was
REPORTED OUT of committee with new fiscal notes
from the Dept. of Health and Social Services.
SB 229 - UNEMPLOYMENT COMPENSATION & STEP PROGRAM
Discussion was had with Dwight Perkins, Remond
Henderson, Lamar Cotten, and Arbe Williams. The
bill was held in committee pending preparation of
an amendment by Co-chairman Frank.
SB 301 - POSTSECONDARY EDUCATION
Discussion was had with Senator Green and Mike
Tibbles. An amendment by Senator Rieger was
ADOPTED. CSSB 301 (Fin) was REPORTED OUT of
committee with accompanying fiscal notes from the
Dept. of Revenue and the Dept. of Education.
SENATE BILL NO. 98
An Act making changes related to the aid to families
with dependent children program, the Medicaid program,
the general relief assistance program, and the adult
public assistance program; directing the Department of
Health and Social Services to apply to the federal
government for waivers to implement the changes where
necessary; relating to eligibility for permanent fund
dividends of certain individuals who receive state
assistance, to notice requirements applicable to the
dividend program; and providing for an effective date.
Co-chairman Halford directed that discussion of CSSB 98
(Fin), version "B," adopted and amended at the morning
meeting, continue. He advised of two remaining areas of
concern: The first involves grandparent responsibilities,
and the second relates to occupational licenses.
Prior to continuing that discussion, the Co-chairman
directed attention to language within Section 32, page 44,
and noted that it would allow legislators access to
information in welfare cases. He voiced ongoing frustration
over inability to obtain adequate information. Sec. 32 also
contains a protection requiring that information not be
disclosed as public information. Senator Zharoff voiced
OBJECTION to the provision. Co-chairman Halford noted that
the exemption is narrow. He stressed the importance of
access to information on programs on which the legislature
is working and continuing to make revisions. Senator
Zharoff acknowledged greater concern over original language
which provided for access by legislative staff. The Co-
chairman noted that original provisions were removed from
the current proposal.
Co-chairman Halford referenced continued interest in a
ratable reduction and advised of an amendment that would add
the provision to the bill.
The Co-chairman further referenced an amendment applicable
to CSED licensing provisions which would sunset that portion
two years from the effective date of this act rather than
the effective date of federal action.
Senator Rieger pointed to language within Section 35 and
asked if it would allow disclosure against the will of the
constituent. Or, would it provide access only if a
constituent asked a legislator to work on a problem on his
or her behalf. Co-chairman Halford said, "It works both
ways." It could respond to a constituent complaining about
receipt of benefits by someone who appears to be ineligible.
It would also respond to those who seek benefits but are
told they do not qualify. He acknowledged waivers which
presently allow access to information on a particular client
when the legislator is working on behalf of the client.
Senator Rieger next inquired concerning the extent of the
personal information. KRISTEN BOMENGEN, Assistant Attorney
General, Human Services Section, Dept. of Law, attested to
considerable amounts of information and suggested that
language within the bill could be made more restrictive.
Co-chairman Halford said there was no intention to include
medical information and suggested that the department
prepare an amendment clarifying that issue. Financial
information, however, would be pertinent to legislative
inquiries. Ms. Bomengen noted that the information may
include other sensitive matters such as discussion of child
abuse issues. A great many areas of the file may not be
pertinent to legislative inquiry. She suggested that
perhaps merely summary information could be made available.
Discussion followed regarding the types of inquiries that
might be made on behalf of constituents or as suspected
fraud referrals. Senator Randy Phillips advised of need to
balance the right of access versus the rights of
individuals. Ms. Bomengen acknowledged that access sought
by legislators may be allowable, under new federal law, with
changes to wording in the present draft of CSSB 98 (Fin) to
provide summary information addressing the specific point of
inquiry. Ms. Bomengen further cited awkwardness stemming
from the manner in which information received from the
department would be conveyed to constituents. Co-chairman
Halford reiterated that it is not the intent that medical
information be disclosed. He asked that Ms. Bomengen draft
language allowing "a reasonable review of a specific case
without getting into the kinds of medical, child abuse, very
personal history things, that are not relevant to the
immediate decisions of qualification or non-qualification."
Senator Rieger directed attention to his handwritten
amendment, Amendment No. 3, and advised of need to apply the
latter portion of the amendment at both Page 42, lines 13-
19, and Page 38, lines 2 through 8. He explained that the
amendment relates to instances in which individuals may be
caught off guard by a suspension of license notice. The
first requirement ensures that individuals have at least 60
days' notice (from CSED) that the individual is in arrears
in child support. Further, the arrearage must have
accumulated to at least 4 months' worth of payments.
Senator Zharoff inquired concerning the average monthly
obligation. GLENDA STRAUBE, Director, Child Support
Enforcement Division, Dept. of Revenue, advised that
payments are levied on a percentage of income. An across-
the-board average is approximately $310.00 per order.
Senator Rieger MOVED for adoption of Amendment No. 3. No
objection having been raised, Amendment No. 3 was ADOPTED.
Senator Randy Phillips MOVED to delete provisions relating
to grandparents. Co-chairman Frank MOVED language within
Amendment 4 (a) as an alternative to deletion of grandparent
provisions. Ms. Straube explained that the amendment
addresses committee concern regarding the taking of 20
percent of paternal grandparent income. The amendment will
allow the court to decide what proportionate share should be
paid. Kristen Bomengen again came before committee. She
explained that the amendment was drafted to provide for a
multitude of possible circumstances. The cost is to be
directly related to care of the minor parent and infant in
an adult supervised setting. The second portion of the
amendment provides the following definition of grandparent:
For the purposes of this paragraph, a grandparent
is the natural or adoptive parent of the minor
parent.
Senator Rieger expressed concern that there does not appear
to be a cap on the amount awarded from a grandparent's
income. The intent was to allow it to be lower. He
suggested that language should require a proportionate share
but also say "but in no event more than" a specific cap.
Discussion followed regarding circumstances in which the
infant might require extraordinary medical care. Co-
chairman Halford asked if grandparents would be obligated to
pay a proportionate share of the bill. Ms. Bomengen
responded affirmatively.
Discussion of revision of wording within Amendment No. 4(a)
followed between Co-chairman Halford and Senator Rieger.
Co-chairman Frank asked if the court would first apply the
20 percent rule or levy a proportion of the actual cost of
care. Co-chairman Halford noted that, per the amendment,
the court would use whatever is lower. Co-chairman Frank
voiced support for a dollar limitation rather than a
percentage. Further discussion of average child support
payments ensued. A subsequent suggestion was made for
language requiring payment of half the cost of care but no
more than $500.00 a month.
Glenda Straube referenced federal constraints on child
support guidelines. Actual dollar amounts pose problems.
The state is required to establish guidelines that allow
assessment based on an obligor's earnings. Co-chairman
Frank noted that that makes sense for parents but questioned
application to grandparents as well. Further discussion of
proportionate share followed, using as an example a divorce
situation involving grandparents in four separate
households. Discussion of recovery of AFDC payments ensued.
END: SFC-96, #86, Side 1
(Malfunction on SFC-96, #86, Side 2
tape would not reverse.)
BEGIN: SFC-96, #87, Side 1
A replacement for Amendment No. 4(a) was distributed to
members for review and designated Amendment No. 4 (c). Co-
chairman Halford called for a show of hands on adoption.
Amendment No. 4(c) was ADOPTED.
Co-chairman Halford next called for a show of hands on
Senator Phillips' motion for deletion of grandparent
provisions, which the Co-chairman designated as Amendment
No. 5. Amendment No. 5 failed to be adopted.
Senator Sharp MOVED for adoption of Amendment No. 6. He
explained that it deletes language providing exceptions from
licensing provisions. The only remaining exemptions would
be limited entry permits and driver licenses. Senator Sharp
noted that driver licenses are adequately covered in another
section, and the division has testified it presently has an
effective means of collection of payments from those holding
limited entry permits. Co-chairman Halford voiced support
for the amendment but acknowledged that recreational
licenses (hunting and fishing), called for in federal law,
are not included in the proposed bill. That raises a
further question regarding crew licenses for commercial
fishing which are sold by the same vendors as hunting and
fishing licenses. Since administrative capability to deal
with crew licenses will be necessary, the legislature may
add an amendment to cover hunting and fishing licenses
because that question will ultimately have to be dealt with.
Senator Sharp concurred. He said he did not include
recreational licenses at this time because they would not
generate a great amount of income. The situation is
different for crew members. He acknowledged that collection
might become an administrative nightmare.
Discussion of proposed removal of the exemption for nursing
home licenses followed. Senator Sharp stressed that
directors of non-profits often have significant salaries
that should not be exempt.
Co-chairman Halford called for objections to adoption of
Amendment No. 6. Senator Zharoff voiced OBJECTION relating
to crew and vessel licenses. The Co-chairman called for a
show of hands, and Amendment No. 6 was ADOPTED.
Co-chairman Halford next referenced Senator Phillips' motion
for deletion of Section 22, relating to all licensing
provisions, which he designated Amendment No. 7. Senator
Phillips asked how individuals could be expected to pay
child support if the license he or she needs to work is
removed. Co-chairman Halford called for a show of hands.
Amendment No. 7 failed to be adopted on a vote of 2 to 5.
Co-chairman Halford next directed attention to Amendment No.
8 which he explained would change the effective date of CSED
enforcement language and tie it to the effective date of the
bill rather than enactment of federal requirements. CSED
language would remain in effect for two years following the
effective date of state legislation. KAREN PERDUE,
Commissioner, Dept. of Health and Social Services, advised
that federal occupational licensing provisions are scheduled
for U.S. Senate action in the second week in May. The U.S.
House of Representatives will thereafter commence action.
The status when it eventually reaches the President is
unknown at this time. Senator Sharp MOVED for adoption of
Amendment No. 8. No objection having been raised, Amendment
No. 8 was ADOPTED.
Co-chairman Halford next direction attention to Amendment
No. 9 and noted that it applies to release of information to
legislators.
Senator Zharoff asked if any portions of the welfare reform
bill might be subject to constitutional or other legal
challenge. Co-chairman Halford acknowledged potential for
challenge. He advised that portions of the bill are
severable as a matter of general statutory construction.
The Co-chairman again referenced Amendment No. 9 and noted
that language is limited to financial information. It also
makes provisions consistent with federal law. It is
intended to allow legislators to "at least get an answer to
a simple question when you get a constituent problem on an
area of potential welfare abuse." Senator Sharp MOVED for
adoption of Amendment No. 9. Senator Zharoff raised a
question concerning penalties for disclosure of confidential
information. Kristen Bomengen said those who misuse the
information would be subject to hearing under legislative
conduct provisions or subject to criminal prosecution under
AS 11.56.860, a class-A misdemeanor.
Senator Zharoff voiced need for a reminder of the
confidentiality of the information and noted that
legislators are required to sign oaths of confidentiality
prior to receiving certain oil and gas or litigation
information from the Dept. of Law. Co-chairman Halford
concurred in need for a notification provision. Senator
Randy Phillips concurred, citing such a provisions relating
to permanent fund dividend information. Senator Donley
inquired concerning legislative liability should the
information be leaked while in legislative possession. Co-
chairman Halford referenced amendment language saying that
the information is to remain confidential and shall not be
subject to further disclosure. Senator Donley asked if the
language would trigger criminal provisions making disclosure
a crime. Kristen Bomengen reiterated her earlier comments
saying that violations would be subject to legislative
ethics hearings and subsequent criminal prosecution.
Senator Zharoff stressed need to notify the requestor that
the information is confidential. Ms. Bomengen said that
regulations should cover the matter with a cover sheet or
form that would have to be signed.
Senator Donley suggested additional language saying that
penalties are not triggered unless the one receiving the
information is notified, at the time of receipt, that the
information is confidential and may not be further
disclosed. The Senator then MOVED for adoption of a
conceptual amendment adding that requirement to Amendment
No. 9. Senator Rieger noted that the individual to be
harmed would be the subject of the information. He said he
was not comfortable with the conceptual amendment. Co-
chairman Halford called for a show of hands. The conceptual
amendment was ADOPTED on a vote of 6 to 1.
Co-chairman Halford next called for objections to adoption
of Amendment No. 9. No objection having been raised,
Amendment No. 9 was ADOPTED.
The Co-chairman referenced additional amendments relating to
the 3 percent ratable reduction and a provision extending
transitional medical and day care assistance from twelve to
twenty-four months. Existing language provides for twelve
months. The foregoing amendments were not offered.
Co-chairman Halford referenced a question surrounding the
index for safety provisions relating to redetermination of
assistance levels in terms of whether it should apply to
total funds or merely state funds. The department feels
that application to total funds would result in
disincentives to strive for federal rewards and management
incentives. The department would prefer an amendment to
reflect general funds or state funds rather than total
funds. Commissioner Perdue reiterated that language at Page
49, lines 5 and 6, would serve as a disincintive to garner
federal funds. She thus requested that the cap be limited
to state funds. Co-chairman Halford said he had no
objection. The proposed formula was merely a means of
preventing the program from growing out of control. As
Amendment No. 10, Senator Sharp MOVED to insert the word
"state" between the words "total" and "funds" at Page 49,
lines 5 and 6. No objection having been raised, Amendment
No. 10 was ADOPTED.
Senator Green referenced an amendment pertaining to two-year
transitional medical and day care coverage, stressing that
it represents a one-time opportunity. Co-chairman Halford
voiced his understanding that the proposed amendment would
cost $850.0. He said he would support the amendment if
accompanied with a ratable reduction.
Co-chairman Halford next requested an analysis of the fiscal
notes.
CURT LOMAS, Welfare Reform Program, Division of Public
Assistance, Dept. of Health and Social Services, came before
committee. He said he could provide a preliminary summary
but noted specific need to work with the Dept. of Revenue on
effective date changes regarding child support collections.
The department will be developing two separate sets of notes
because of implementation provisions providing for a waiver
track if federal reform is not in place by October, 1996,
and a comprehensive track if federal law passes by that
date. He then provided the following numbers:
Waiver
Comprehensive
DH&SS $1,264.0 $1,442.0
Savings over 5 yrs. thru
2002 $19,560.0 $40,646.0
Both tracks show a negative fiscal note in FY 98 and a
positive note in FY 97. The negative total under the waiver
approach is $2,282.0 and $3,556.0 under comprehensive. That
discounts child support collection impacts. If licensing
provisions are enacted and collections begin, there will be
a $224.0 savings in FY 97 under the comprehensive approach
and enactment of federal law, and a $46.2 savings under the
waiver approach if licensing provisions go into effect when
the bill becomes effective.
Co-chairman Halford asked how much of the fiscal note cost
is discretionary in terms of department actions. Mr. Lomas
advised that the present breakout does not contain
sufficient information to respond precisely. Commissioner
Perdue stressed that calculations do not include additional
child care dollars.
END: SFC-96, #87, Side 1
BEGIN: SFC-96, #87, Side 2
Co-chairman Halford asked for a breakdown of the $1.2
million cost associated with the waiver program. Mr. Lomas
explained that implementation costs for both the waiver and
comprehensive approach are very close the first year. The
biggest cost is data processing. Both approaches require
extensive modifications to the data system. The waiver
approach is more expensive because it requires development
of two tracks and comparison of experimental and control
groups. Those costs do not accrue until the second year.
That makes the waiver approach approximately $400.0 more
expensive than the comprehensive approach in that year.
In response to a question from the Co-chairman, Mr. Lomas
advised that the department could provide new notes by
Saturday, April 20, 1996. Co-chairman Halford queried
members regarding movement of the bill with the
understanding that the two sets of fiscal notes will reflect
approximately $1.2 million and $1.4 million for the first
year. Senator Sharp MOVED for passage of CSSB 98 (Fin) with
individual recommendations and fiscal notes to be provided
by the department. No objection having been raised, CSSB 98
(Fin) was REPORTED OUT of committee. Co-chairmen Halford
and Frank and Senators Rieger and Sharp signed the committee
report with a "do pass" recommendation. Senators Donley and
Zharoff signed "no recommendation." Senator Randy Phillips
signed "do pass if amended." The following Dept. of Health
and Social Services fiscal notes accompanied the bill:
Waiver Comprehensive
AFDC Policy Provisions (690.4) (1,489.7)
PA Administration 297.2 220.5
PA Data Processing 543.0 543.0
Family and Youth Services 100.2 100.2
Fiscal notes for Alaska Work Programs and Child Care
Benefits were also provided showing costs under the waiver
program commencing in FY 99.
SENATE BILL NO. 229
An Act relating to employment contributions and to
making the state training and employment program a
permanent state program; and providing for an effective
date.
Co-chairman Halford directed that SB 229 be brought on for
discussion. DWIGHT PERKINS, Special Assistant, Dept. of
Labor, came before committee to speak to CSSB 229 (L&C). He
explained that it reflects combination of SB 229 and SB 276.
In the first portion, concerns raised by both the Dept. of
Community and Regional Affairs and the Dept. of Labor were
addressed and agreed upon in CSSB 229 (CRA). The original
SB 229 made the STEP program (State Training and Employment
Program) permanent. The six-year pilot program has worked
well over that term. Sunset provisions were then applied to
the program which changed the title of the legislation. Mr.
Perkins pointed to further wording changes and additional
subsections incorporated within the new version. He spoke
to changes to improve past problems with record keeping in
service delivery areas, a limitation of administrative costs
to 20 percent, and new reporting requirements.
The second portion of the bill was originally incorporated
within SB 276--calculation of weekly benefits for insurance
claimants. Directing attention to page 10, line 27, Mr.
Perkins noted the current weekly benefit for unemployment
insurance. He explained that the payment is based on 75
percent of the average weekly wage earned by the individual.
He further noted a maximum of $248.00 per week.
Pointing to accompanying fiscal notes, Mr. Perkins advised
that the $3,946.2 (relating to Sec. 2) refers to the STEP
program. The $231.8 note (relating to Sec. 5) shows the
unemployment benefit increase. Fiscal notes do not seek
additional moneys in the budget. Mr. Perkins next spoke to
qualifications which make workers eligible for unemployment
benefits.
Discussion in previous committees indicated that while there
was no objection to increasing the weekly benefit amount,
legislators and constituents would "like to see the
employees picking up part of this cost." Under present
statutes, the employer pays 82 percent and the employee pays
18 percent. Mr. Perkins then attested to a proposed
reduction, to the employer, of $15 per employee and an
increase in employee payments of $20 per year (38 cents a
week).
Senator Rieger inquired concerning cross-subsidization of
unemployment benefits. He suggested that those employed in
seasonal jobs collect more unemployment benefits than those
working year-round jobs. Mr. Perkins explained that
everyone who works pays half of one percent for unemployment
insurance. Total collections are not industry specific.
However, one industry does not subsidize another since those
in seasonal jobs have higher rates than those in year-round
jobs.
REMOND HENDERSON, Director, Administrative Services, Dept.
of Community and Regional Affairs, next came before
committee. He clarified that while collections accrue to
one account, moneys are separated by industry. ARBE
WILLIAMS, Director, Administrative Services, Dept. of Labor,
concurred that rates for individual industries are set to
cover the cost of benefits for the industry.
In response to a question from Senator Sharp, Ms. Williams
advised that an employer's rate is based on how steady
employment has been over a previous period of time.
Responding to a further question from Co-chairman Frank, Ms.
Williams explained that funds paid by both employer and
employee accrue to the employer trust fund. Payments are
handled like trust fund moneys. Senator Rieger asked if
benefits are appropriated by the legislature. Ms. Williams
responded negatively, saying they flow directly from the
unemployment insurance trust fund.
Co-chairman Frank asked why STEP program services are
limited to those who have been employed over the last three
years. Ms. Williams advised that the program is funded by
employee contributions to minimize the effect of
unemployment on the trust fund. It was felt important to
maintain a tie between workers who both contribute to the
program and may subsequently need to benefit from training
programs offered by STEP. STEP is a diversion of
unemployment insurance moneys to which all workers
contribute.
Co-chairman Frank inquired concerning availability of other
programs to those who have not been employed for a period of
time. Ms. Williams attested to numerous federal programs.
Discussion of JTPA and other training programs followed.
Co-chairman Frank next asked who would receive grants under
the proposed bill. Mr. Perkins explained that funds flow
through the Dept. of Labor to the Dept. of Community and
Regional Affairs for dispersement. Mr. Henderson said funds
are dispersed by three services delivery areas: Anchorage,
Fairbanks, and the balance of state. He referenced a list
(copy on file in the original Senate Finance Committee file
for SB 229) of recipients for 1995.
Senator Donley voiced his understanding that the bill
decreases contributions from employers, and increases
contributions from employees, to extend unemployment
benefits and fund the STEP training program. Mr. Perkins
reiterated that the bill reflects combination of two
unrelated pieces of legislation. The sources of incoming
revenues to pay for the programs are different. Only
employee-generated payments fund STEP.
Discussion followed between Senator Donley and Arbe Williams
regarding diversion of trust fund moneys to fund the STEP
program. Mr. Perkins advised that the program is scheduled
to end on June 30. The first portion of the proposed bill
would re-establish it in law and provide a two-year sunset
for subsequent legislative review.
Further discussion and review of the list of training grants
followed.
END: SFC-96, #87, Side 2
BEGIN: SFC-96, #88, Side 1
Co-chairman Halford specifically inquired concerning grants
to entities outside the state. LAMAR COTTEN, Deputy
Commissioner, Dept. of Community and Regional Affairs, came
before committee. He advised that Golden Age Fishery in
Seattle is a partner with one of the CDQ groups in Alaska.
Mr. Perkins added that necessary in-state training is not
always available. Arbe Williams noted that training is
provided to those who qualify for STEP funds--those who have
an attachment to the Alaska unemployment insurance trust
fund.
Further discussion of listed grantees and training services
ensued. Co-chairman Halford referenced $142.0 in individual
referrals and subgrants of $865.0 for a total of $1,008.9.
Mr. Henderson advised that the total reflects actual FY 95
expenditures in the statewide service delivery area only.
Expenditures for the Anchorage service area were $731.0.
The Fairbanks area expended approximately $170.0. The
fiscal note is an estimate of FY 97 expenditure based on the
amount being RSA'd to the Dept. of Community and Regional
Affairs by the Dept. of Labor. That totals $3,333.6.
In response to an inquiry from Co-chairman Frank concerning
how people find out about the STEP program and the actual
point of entry, Mr. Henderson attested to brochures
advertising the program as part of the general job training
information the department provides. Services are provided
through field offices. Arbe Williams added that welfare
counselors are also aware of the program as are employment
service employees in the Dept. of Labor's 19 field offices.
Co-chairman Frank asked what would prevent employers from
using the program to fund training for new hires. Mr.
Henderson noted need for the individual to have contributed
to the unemployment insurance fund in order to qualify and
be eligible for the program. He acknowledged that employers
could take advantage of the program for new trainees. He
further advised of benefits of JTPA (the Job Training
Partnership Act) under which employers pay only 50 percent
of the employee's wage during training. Mr. Perkins
stressed that both programs assist in getting individuals
off welfare or unemployment and into productive jobs. Co-
chairman Frank asked why the program could not be extended
to the longer term unemployed. Arbe Williams explained that
not every employer, employee, or occupation is eligible to
receive STEP funds. The program targets occupations and
industries that have high unemployment and tend to hire non-
residents. Statistics are derived from the annual non-
resident hire report. Funds are dispersed by area,
depending upon where those occupations and industries are
located.
Senator Donley MOVED for passage of the bill with individual
recommendations. Co-chairman Frank expressed need to
determine whether training programs could serve longer term
unemployed individuals as well. He expressed concern that
some individuals have been denied benefits because the
program targets the recently unemployed. Co-chairman
Halford voiced his understanding that subgrants apply to
anyone. Co-chairman Frank said that if an individual has
not worked for four years, he or she would not qualify.
Arbe Williams concurred. She explained that the reason is
that employees are paying for the program. Mr. Perkins
voiced need to review expansion of the program to determine
whether or not there might be negative impact on the trust.
Mr. Henderson suggested that expansion could be handled
since all available funds are not currently being spent.
Co-chairman Frank attested to the desirability of expanding
the program to a larger pool of participants. Arbe Williams
advised that she would feel more comfortable consulting the
actuarial regarding the potential impact on the trust fund,
before action is taken. At this time, the STEP program is a
"fairly small pot of money" that serves a "fairly small pool
of people."
Co-chairman Halford suggested that Co-chairman Frank develop
an amendment for discussion at the next meeting. Senator
Donley withdrew his motion for passage, and CSSB 229 (L&C)
was held in committee.
SENATE BILL NO. 301
An Act relating to postsecondary education.
Co-chairman Halford directed that SB 301 be brought on for
discussion. SENATOR LYDA GREEN came before committee
accompanied by her aide, MIKE TIBBLES. She referenced an
Executive Order relating to postsecondary education and
noted a preference for effecting changes through
legislation. The Senator pointed to outdated federal
requirements "that were being transferred from one agency to
another." Legislation will effectively repeal those.
Further, if changes within postsecondary were made via
Executive Order, the legislature would lose oversight and
ability to confirm board members. The legislature should
maintain some control over individuals making financial
decisions which ultimately impact many Alaskan students.
The proposed bill would move the Alaska Student Loan
Corporation from the Dept. of Education to the Dept. of
Revenue and transfer the functions of the Alaska Commission
on Postsecondary Education to the Alaska Student Loan
Corporation. It attempts to change composition of the
corporate board to eliminate special interests and create a
majority of public members and a minority of commissioners.
The legislative confirmation process would be continued
under the bill. There is a further requirement that the
corporation establish separate accounts for the teachers'
scholarship revolving loan fund account and the family
education loan account.
The bill also includes a correction to SB 123 wherein the
prorata shares for half-time graduate and undergraduate
students was reversed. SB 123 also established full-time
career educations as six weeks in length. The proposed bill
establishes the shortest half-time career educational
programs as at least twelve weeks in length.
The loan origination fee will be used to offset default
loses in the memorial scholarship loan program. And a new
provision is added to allow those participating in the
family education program to make payments earlier than
required by law. WAMI is moved to the University of Alaska
to simplify the budget process.
Senator Rieger expressed concern that the corporation is
"getting into deeper and deeper trouble ever since we went
to bonding back in 1986 . . . ." He voiced additional
concern over proposed transfer of WICHE and WAMI to the
University.
Senator Rieger also raised concern regarding public interest
language within Section 6 at page 4.
Mike Tibbles advised that WICHE would remain in place. It
is merely being transferred from the commission to the
corporation. It is the WAMI program that would be
transferred to the University. Senator Green noted that
display of WAMI funding as a single item would provided a
better indication of what is actually being spent.
Speaking to concern regarding Section 6, Mr. Tibbles
explained that AS 14.42.050 (legal counsel for the
commission) is deleted in the repealing section. Language
within Section 6 appears to be the same as that removed. It
is merely being taken from the commission and placed in the
corporation. Senator Green concurred that a great amount of
the proposed bill involves renaming what previously related
to the commission to make it apply to the corporation.
Co-chairman Halford raised a question concerning past legal
opinions that corporate boards are not subject to
legislative confirmation because they do not fit under
current confirmation law. Mr. Tibbles said statutes spell
out the members of the commission and hold them subject to
confirmation. The corporation consists of the members of
the commission.
Senator Rieger MOVED to delete Section 2 and effect
necessary conforming amendments associated with removal.
WAMI would thus remain as it is. Senator Green expressed
interest in examining the WAMI program. She suggested that
it is not doing as intended in terms of luring students back
to Alaska once they have completed their education. No
objection having been raised, Amendment No. 1 to remove
Section 2 was ADOPTED.
Senator Rieger MOVED that CSSB 301 (Fin) pass from committee
with individual recommendations and accompanying fiscal
notes. No objection having been raised, CSSB 301 (Fin) was
REPORTED OUT of committee with the following fiscal notes:
Dept. of Revenue $45.0
Dept. of Education/Student Loans 6.0
Dept. of Education/Inst.Auth. 125.0
DOE/Postsecondary/Boards and Comm. 64.2
DOE/Postsecondary/Administration (22.0)
Co-chairmen Halford and Frank signed the committee report
with a "do pass" recommendation. Senators Phillips, Rieger,
Sharp, and Zharoff signed "no recommendation."
ADJOURNMENT
The meeting was adjourned at approximately 7:05 p.m.
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