Legislature(2001 - 2002)
05/01/2002 04:44 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
May 01, 2002
4:44 PM
TAPES
SFC-02 # 84, Side A
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 4:44 PM.
PRESENT
Senator Pete Kelly, Co-Chair
Co-Chair Dave Donley, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Gary Wilken
Senator Alan Austerman
Senator Lyman Hoffman
Senator Loren Leman
Senator Donald Olson
Also Attending: ZACH WARWICK, Staff to Senator Therriault; NEIL
SLOTNICK, Deputy Commissioner, Treasury Division, Department of
Revenue; JOHN JENKS, Chief Investment Officer, Treasury Division,
Department of Revenue; REBECCA NANCE GAMEZ, Deputy Commissioner,
Department of Labor and Workforce Development; BILL CHURCH, Staff
to Representative Scott Ogan; CHERIE PAUL, Program Manager, Alaska
Children's Trust.
Attending via Teleconference: From Fairbanks: CAROL BRICE, Chair,
Alaska Children's Trust Fund; MARILYN EGGLESTON, Resource Center
for Parents & Children; COLEEN TURNER, Director, Resource Center
for Parents & Children
SUMMARY INFORMATION
SB 311-STATE TRUST FUND MONIES
The Committee heard from the sponsor and the Department of Revenue,
and took public testimony. The bill was held in Committee.
HB 128-APPROVAL FOR EMPLOYMENT OF MINORS
The Committee heard from the sponsor of the bill and the Department
of Labor and Workforce Development. The bill was held in Committee.
CS FOR SENATE BILL NO. 311(HES)
"An Act relating to the public school trust fund, the Alaska
children's trust, and the Alaska heritage endowment fund; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
ZACH WARWICK, staff to Senator Gene Therriault, informed the
Committee that this legislation would provide methods to "better
manage" the Public School Trust Fund, the Alaska Heritage Endowment
Fund, and the Alaska Children's Trust. He reminded the Committee
that State statute originally established two fund components for
each of the three funds: a principle account and a net income
account along with the stipulation that any fund appropriations be
made from the net income account. He continued that this
appropriation mandate resulted in the funds being invested in
endeavors with a guaranteed income rather than in those that
appreciate in value. He stated that investments that appreciate in
value are generally higher yielding and "could make the trust funds
much more useful for what they were originally designed for."
Mr. Warwick stated that this legislation would allow the
appropriations to be based on market value rather than on net
income, would direct the Commissioner of the Department of Revenue
"to invest the assets in a manner that would yield at least five
percent real rate of return over time," and would require the
Department to provide an annual fund value and appropriations
report to the Legislature.
Mr. Warwick referred the Committee to grant language specified in
Section 17, subsection (d) located on page 7, line 17 of the bill,
that would limit the Alaska Children's Trust Fund grants to one per
organization per year in addition to specifying that the grant be
used to fund projects within a specific locale in the State.
NEIL SLOTNICK, Deputy Commissioner, Treasury Division, Department
of Revenue stated that the Department supports this bill as it
would make these funds consistent with other State administered
endowments such as the Arctic Winter Games endowment and the Power
Cost Equalization (PCE) endowment "which are managed at a five
percent of value payout." He stated "it's good policy" to have all
the State's endowments managed in similar fashion, as it allows for
the Department to manage "on a basis of total return not on
different types of returns;" it allows for automatic inflation
proofing; "and for a smooth, reliable payout with the five percent
of market payout each year."
JOHN JENKS, Chief Investment Officer, Treasury Division, Department
of Revenue, stated, "this bill really does allow the investment
decision to be made in the best interest of these long-term funds,"
which would allow for more productive funds with "the expectation"
of an increase of over half a percent return over the long term. He
informed the Committee this increase could amount to several
million dollars a year over time. He asserted that the explicit
language for inflation proofing the funds is important.
Senator Austerman asked for clarification that any earnings
produced from the endowment are deposited into the fund and are
included in the total when determining the five percent of the
fund's value.
Mr. Jenks replied, "yes, that is correct."
Senator Austerman stated; therefore, that of that total, five
percent could be used for funding purposes. He asked the Department
the current value of each of the three funds.
Mr. Slotnick listed the Public School Trust value at approximately
$275 million; the Alaska Children's Fund is approximately $9
million; and the value of the Alaska Heritage Endowment fund "is
relatively small" with a value "in the hundreds of thousands."
Senator Austerman asked if the Legislature appropriates general
funds to the Public School Trust fund.
Mr. Slotnick replied State statute specifies that monies in the
Public School Fund must be spent on educational purposes; however,
he would need to verify whether the Fund receives appropriations
from the general fund.
CAROL BRICE, Chair, Children's Trust Fund, testified via
teleconference from Fairbanks to voice concern that the grant
language in Section 17, subsection (d) of this legislation
restricting grant monies to fund projects "within a municipality or
a regional education attendance area or an unincorporated
community…" is contrary to what "has been the practice." She stated
the receiving one grant in a twelve month period is not a problem;
however, prohibiting grant monies to fund programs such as the
Norton Sound Health Corporation Parenting Program that operates
programs in 36 villages, is of concern.
MARILYN EGGLESTON, Grant Writer, Resource Center for Parents &
Children (RCPC), testified via teleconference from Fairbanks to
voice that the new language would negatively affect a RCPC program
to produce three parenting videos for distribution to numerous
small rural communities throughout Alaska.
Ms. Brice interjected that most of the grants support private, non-
profit entities, and she asked why the Legislature would want to
eliminate projects that have a statewide benefit. She stated that
resource networking provided by entities such as the RCPC enable
"small resources" to have a large reach. She urged the Committee to
omit the restrictive language requiring "a project to be located in
one community or municipality."
Senator Austerman clarified that Ms. Brice contends the language is
restrictive because it mandates that a program must operate in one
municipality.
Ms. Brice reiterated that the language is restrictive as it limits
funds "to a single project within a municipality." She stressed
that many programs applying for these grants "have a large reach"
and this language puts those programs at "a disadvantage."
Senator Wilken asked Ms. Brice what issue might have prompted this
language to be included in this bill.
Ms. Brice responded she did not know why the language was
introduced to the bill.
COLEEN TURNER, Director, RCPC, testified via teleconference from
Fairbanks to voice concern about the language limiting projects to
a specific area. She urged the Committee to write an amendment to
this legislation, as the current wording is "problematic."
Mr. Warwick stated that the language in question was introduced at
the request of Senator Green due to some Alaska Children's Trust
grant awards "she was in objection to."
CHERIE PAUL, Program Manager, Alaska Children's Trust, informed the
Committee that Senator Green's concern was prompted by grants the
Alaska Children's Trust had awarded to the Alaska Public Radio
network to fund child abuse and neglect parenting messages aired on
statewide public radio. She stated that the Alaska Children's Trust
worked with a variety of agencies to write the messages and paid
the public radio network to produce and air the messages over a
three-year period.
Senator Wilken asked how much money these grants amounted to.
Ms. Paul stated that the first year's funding amounted to $49,000
that was strictly for airtime, "and the other two years was just
under $30,000."
Co-Chair Donley asked the percentage of "total expenditures" of the
Alaska Children's Trust fund.
Ms. Paul responded that total grant awards have ranged between
$330,000 and $365,000 per year during the past five years.
Co-Chair Donley calculated that the public radio network grants
amounted to approximately 10 percent of the annual allocated grant
total.
Senator Wilken asked the witness to suggest alternate language that
could address Senator Green's concerns while allowing for the
flexibility suggested by Ms. Brice.
Ms. Paul preferred that the Board of Directors for the Children's
Trust Fund suggest language alternatives. She expressed that the
"sole purpose" of the Children's Trust is to deliver child abuse
and neglect prevention messages, and the Board feels that is what
they "should do, that is what the statutes mandate us to do, and I
think that over the years, we have done the best job possible in
allocating our dollars."
Senator Wilken recommended that further discussions should occur to
address Senator Green's concerns and "yet not hamstring the Trust
from doing things statewide."
The bill was HELD in Committee.
CS FOR HOUSE BILL NO. 128(L&C)(efd add)
"An Act relating to the required approval of the commissioner
of labor and workforce development for the employment of
certain minors; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
BILL CHURCH, Staff to Representative Scott Ogan, informed the
Committee that the Work Permit for Minors regulations established
by the Department of Labor and Workforce Development incurs a
hardship for some businesses in the State such as farmers needing
to hire minors on short-notice to harvest crops. He stated that
this legislation introduces changes to streamline the current work
permit procedure by allowing the Department to pre-approve job
duties.
Mr. Church explained that currently an employer must submit a
signed parental consent form to the Department of Labor and
Workforce Development before a minor could begin work; however,
this bill would allow an employer to hire a minor who is at least
14 years of age for a pre-approved job and submit the signed
parental consent work permit document to the Department within
seven days after the minor begins employment. He stated this
process "would satisfy the protection of minors" as well as the
needs of the employers who need workers "right away."
Mr. Church stated that while Representative Ogan worked with the
Department to "craft" this bill, it was learned that the fishing
industry and fast food restaurants also support changes to the
current hiring procedures for minors.
Senator Ward asked for further information about the parental
consent form.
Mr. Church responded that if a job has received pre-certification
from the Department, the signed parental consent form could be
received at the Department within seven days after the minor begins
employment. He reiterated that part of the permitting process is to
guarantee the safety of the minor, and the Department must review
and approve the job description to ensure that the job is an
acceptable one for a fourteen year old to perform.
Senator Ward voiced that the bill proposes to allow a minor to
begin employment at, for instance a video store, if the position
had been pre-approved, and the signed parental consent form could
be submitted to the Department within seven days of the employment
date.
Mr. Church concurred, reiterating that the job had to have been
pre-approved.
Senator Ward asked what the employer's "liability" would be in a
situation where a minor had begun to work, but the parents refused
to sign the necessary parental consent form.
Mr. Church responded that there is no liability for up to seven
days on the part of the employer if the minor worked in a position
that had been pre-approved. He stated that if, by the end of the
initial seven days, the signed parental form had not been
submitted, the employer would need to terminate the minor employee.
Senator Ward stated that without the parental authorization, the
employer, according to State law, legally could not reimburse the
minor for work performed in those initial seven days.
REBECCA NANCE GAMEZ, Deputy Commissioner, Department of Labor and
Workforce Development, stated that the Department has not addressed
this concern and would need to verify the ramifications that the
non-receipt of the parental consent form would incur.
Senator Ward reiterated that an employer could not issue payment to
a minor if the parental consent form were not submitted to the
Department; therefore, the minor would not be paid for the time
employed. He stated that in some cases, a minor might start work
and quit after three days, and the parental consent form might
never be submitted for the parent might never know the minor had
been employed. He stated this situation would result in a liability
to the employer.
Mr. Church surmised that it would "seem reasonable," that since the
"approval to hire" has been granted by the Department "that
essentially that minor is eligible to work and to be paid," as this
would be considered a "legal hire." He reminded the Committee that
currently there is no pre-approval process and the signed parental
consent form is required up-front before a minor is allowed to
begin work.
Senator Ward stated that the scenario he described is "very real"
and should be addressed by the Department.
Senator Austerman summarized that the goal of this legislation is
to shorten the length of time it takes to employ a minor.
Ms. Gamez responded that the hiring process would be quicker
because the position would have received prior department approval
and the parental consent period would be expanded to seven days
after employment.
Senator Austerman qualified that current law mandates parents or
legal guardians to submit the signed permission form to the
Department before the minor begins to work.
Ms. Gamez concurred. She stated the proposed legislation would
allow a minor to begin work before the signed parental consent form
is submitted if the position has been pre-approved by the
Department.
Senator Austerman asked for confirmation that a minor could begin
work without a signed parental consent form in place if the
position had been pre-approved by the Department.
Mr. Church confirmed that is correct. He stated that parental
consent would remain a legal requirement in this legislation;
however, the minor would be able to begin work at a pre-approved
job before the form would be required to be submitted to the
Department.
Ms. Gamez opined that this would involve the parent/child
relationship, "and presumably, the parent of a minor child would
know the activities and the work history of the child."
Senator Austerman voiced concern with changing the parental consent
timeline because, he noted, an employer with a pre-approved job
description, could hire a minor for up to seven days, without their
parents knowing about it.
Senator Ward, while voicing support of allowing 14-year-olds to
work, noted that current Department regulations make it a "hassle"
for employers to hire them. He stated his support for the intent of
the bill, however, voiced concern with the parental consent form
language.
Senator Austerman echoed concern about the changes regarding the
parental consent form.
Ms. Gamez announced that the Department would determine what effect
the proposed language would have on compensation due a minor who
worked a few days but for whom a parental consent form was never
received. She stated that the intent of the bill is to allow a more
streamlined hiring procedure for minors, not to supplant parental
involvement.
Senator Austerman stated he could support the bill if the parental
consent language remained as currently required.
Mr. Church reiterated that the intent of the bill is to allow
minors to get into the workforce faster, especially in such
industries as farming and fishing, and not to take away parental
oversight. He stated that "ideally, a minor would take the parental
consent form home," and the next day have it submitted to the
Department. He furthered that the seven-day language was provided
as a "buffer" in the process due to some unforeseen delay in
getting the form signed and submitted.
Mr. Church informed the Committee that currently "some employers do
not go through the work permit process because it is too
cumbersome," and perhaps streamlining the process would encourage
more businesses to hire minors. He speculated that "more good"
would come from this bill "than any difficulties that may arrive."
Senator Ward reiterated that this bill could allow a minor to be
employed for an entire week before it is realized that the parents
have not and would not give their written permission.
Co-Chair Kelly declared this bill would be HELD in Committee until
the bill's drafter clarifies the intent of the language.
AT EASE 5:29 PM/ 5:32 PM
ADJOURNMENT
Co-Chair Pete Kelly adjourned the meeting at 05:32 PM.
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