04/11/2009 09:00 AM House FINANCE

HOUSE BILL NO. 105                                                                                                            
                                                                                                                                
     "An Act relating to the state training and employment                                                                      
     program; and providing for an effective date."                                                                             
                                                                                                                                
10:59:51 AM                                                                                                                   
                                                                                                                                
RYNNIEVA MOSS,  STAFF, REPRESENTATIVE JOHN  COGHILL, SPONSOR,                                                                   
explained that  the State Training Employment  Program (STEP)                                                                   
was established  in 1989  and had  been re-authorized  by the                                                                   
legislature seven  times. The  seventh time, the  legislature                                                                   
asked  the  Department  of Labor  and  Workforce  Development                                                                   
(DLWD)  to   improve  the   program,  especially   addressing                                                                   
concerns about training given  to non-residents and a lack of                                                                   
participation  with  private  enterprise.  A task  force  was                                                                   
formed to study the program and make recommendations.                                                                           
                                                                                                                                
Ms.  Moss noted  that the  taskforce  recommended taking  the                                                                   
politics  out  of  the  program   by  empowering  the  Alaska                                                                   
Workforce  Investment Board  to become  an active partner  in                                                                   
the  STEP  process, including  annual  supervision  over  the                                                                   
scoring  of  projects  and  who  would  obtain  the  training                                                                   
grants,  and  oversight  of  regulations   adopted  by  DLWD.                                                                   
Provisions  were also  added requiring  Alaskan residency  to                                                                   
participate,    strengthening   partnership    with   private                                                                   
business,  and limiting  how  much money  could  be spent  on                                                                   
administration   costs.  Finally,   the  bill  requires   the                                                                   
adoption of  regulations to implement  an appeal  process for                                                                   
applicants who have been denied a grant.                                                                                        
                                                                                                                                
DAVID  STONE, DEPUTY  COMMISSIONER, DEPARTMENT  OF LABOR  AND                                                                   
WORKFORCE  DEVELOPMENT, MEMBER,  ALASKA WORKFORCE  INVESTMENT                                                                   
BOARD, and CO-CHAIR, STEP TASKFORCE,  reported the bill was a                                                                   
result  of  recommendations  from   the  STEP  taskforce.  He                                                                   
detailed  that  the  taskforce  was composed  of  ten  people                                                                   
representing  employers, employees,  the  U.S. Department  of                                                                   
Labor,  the  University  of  Alaska,   and  Alaska  Workforce                                                                   
Investment Board. Taskforce recommendations include:                                                                            
                                                                                                                                
   · Offering services to an expanded pool of workers who                                                                       
     may be displaced;                                                                                                          
   · Clarifying the Workforce Investment Board's oversight                                                                      
     and accountability;                                                                                                        
   · Supporting resident hire through targeted projects and                                                                     
     services;                                                                                                                  
   · Increasing input from local businesses and regional                                                                        
     advisory councils;                                                                                                         
   · Streamlining the grantee application reporting process;                                                                    
     and                                                                                                                        
   · Making STEP a permanent program.                                                                                           
                                                                                                                                
11:03:58 AM                                                                                                                   
                                                                                                                                
Mr. Stone added  that STEP has been the most  successful job-                                                                   
training  program  in  Alaska.   The  program  is  funded  by                                                                   
unemployment  insurance (UI)  employee  contributions at  the                                                                   
rate  of  1/10 of  1  percent.  The program  has  worked  for                                                                   
Alaskans seeking  training, and  unemployed or  underemployed                                                                   
workers;  by   reducing  the  amount  of  time   workers  are                                                                   
employed, the program  has reduced the amount  of UI benefits                                                                   
paid out.                                                                                                                       
                                                                                                                                
Vice-Chair  Thomas pointed to  page 7,  line 20 referring  to                                                                   
residency and queried adding language  such as being eligible                                                                   
for the permanent  fund dividend. Ms. Moss did  not think the                                                                   
language  would  be a  problem  but  did  not know  what  the                                                                   
ramifications would be.                                                                                                         
                                                                                                                                
Co-Chair  Stoltze cautioned  that  the criteria  for the  two                                                                   
programs are different.                                                                                                         
                                                                                                                                
Vice-Chair Thomas  noted that people  are allowed to  vote as                                                                   
residents of Alaska  when living out-of-state  or moving back                                                                   
and forth. He  opined that people should receive  a permanent                                                                   
fund check  or be eligible for  one before spending  money on                                                                   
them  through  STEP.  Ms.  Moss   suggested  conferring  with                                                                   
Legislative Legal  Services and offering an  amendment on the                                                                   
floor if applicable.                                                                                                            
                                                                                                                                
Representative Joule  referred to life-long residents  who do                                                                   
not  apply  for  the  permanent  fund  dividend  for  various                                                                   
reasons,  but may  want  to participate  in  STEP. He  stated                                                                   
concerns about citizens who would be cut off.                                                                                   
                                                                                                                                
11:07:11 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Thomas clarified  that  he meant  the person  may                                                                   
either be eligible  or receive the dividend; he  did not mean                                                                   
the person had to receive the dividend.                                                                                         
                                                                                                                                
Representative  Kelly queried the  balance between  union and                                                                   
non-union and  rural and non-rural  access to the  program as                                                                   
per earlier  concerns.  Ms. Moss responded  that the  sponsor                                                                   
was confident that the concerns had been addressed.                                                                             
                                                                                                                                
Representative Gara  pointed to page 4, line 12  of the bill,                                                                   
and  wondered  if it  unintentionally  excluded  people  from                                                                   
STEP. The  provision protects people  who have had a  job and                                                                   
who run out of UI benefits or  are receiving UI benefits, but                                                                   
may not  allow people without  a job history  to participate.                                                                   
Ms.  Moss did  not think  the  status would  change with  the                                                                   
legislation. Section  4 removes language setting  a six-month                                                                   
limit  on employees  liable to  be  displaced under  existing                                                                   
statute; however,  because the  funds come from  UI benefits,                                                                   
STEP participants must have contributed to UI.                                                                                  
                                                                                                                                
Representative Gara  queried expanding the program  to people                                                                   
who were  new to the work  force. Ms. Moss thought  the issue                                                                   
was a policy question.                                                                                                          
                                                                                                                                
11:10:15 AM                                                                                                                   
                                                                                                                                
GUY BELL,  ASSISTANT COMMISSIONER  AND DIRECTOR,  DIVISION OF                                                                   
ADMINISTRATIVE  SERVICES, DEPARTMENT  OF LABOR AND  WORKFORCE                                                                   
DEVELOPMENT, agreed with Ms. Moss's answer.                                                                                     
                                                                                                                                
Representative Gara offered language  for a third category of                                                                   
people: "or  are seeking employment."  Mr. Bell  thought that                                                                   
would  be  a  policy call  for  the  legislature,  since  the                                                                   
funding  is derived  from employee  contributions  to UI.  He                                                                   
noted  that the  policy in  the past  has been  to limit  the                                                                   
program to those who have contributed to UI.                                                                                    
                                                                                                                                
Co-Chair Stoltze  pointed out  that the legislature  has made                                                                   
policy calls in the past with  direction from the department.                                                                   
He asked if the department had  an opinion. Mr. Guy responded                                                                   
that the  department has  funds for  youth training  that are                                                                   
separate from STEP, providing other options for youth.                                                                          
                                                                                                                                
Representative  Gara  asked  whether STEP  had  training  not                                                                   
provided  in  other  programs  that would  be  beneficial  to                                                                   
youth. Mr.  Stone replied  that STEP  is a funding  mechanism                                                                   
for  funding  training  specifically   for  underemployed  or                                                                   
unemployed workers who have contributed  through the UI fund;                                                                   
there are other funds that can be used for youth.                                                                               
                                                                                                                                
Representative Gara  queried STEP job training  services that                                                                   
would be  beneficial to youth.  Mr. Bell answered  that there                                                                   
were services,  and added that the STEP  demographic includes                                                                   
youth as young Alaskans have contributed to UI.                                                                                 
                                                                                                                                
11:14:08 AM                                                                                                                   
                                                                                                                                
Representative Gara  wondered the downside of  allowing youth                                                                   
without  a job  history accessing  STEP training.   Ms.  Moss                                                                   
thought the  downside was  that STEP  is designed for  people                                                                   
who have worked and are about  to lose work or are unemployed                                                                   
or underemployed.  She  stressed that  the program is  unique                                                                   
for an existing workforce; there  are many other programs for                                                                   
youth.                                                                                                                          
                                                                                                                                
Representative Gara gave the example  of another program with                                                                   
limited funds and spoke of young  people who cannot get jobs.                                                                   
Ms. Moss  emphasized that  STEP was a  limited pool  of money                                                                   
that the sponsors wanted to protect.                                                                                            
                                                                                                                                
Representative  Joule reported  experience  related to  youth                                                                   
vocational education and financial  aid through the Bureau of                                                                   
Indian  Affairs. He  stated  that there  are  funds for  many                                                                   
rural  young people  coming out  of high school,  as well  as                                                                   
local scholarships.  He noted that people in  rural areas are                                                                   
supportive of  vocational and  technical training  for youth.                                                                   
He recalled deciding to use the  UI funds for the program and                                                                   
thought the bill accomplished what it meant to.                                                                                 
                                                                                                                                
11:19:27 AM                                                                                                                   
                                                                                                                                
DOUG WARD,  DIRECTOR, SHIPYARD  DEVELOPMENT, ALASKA  SHIP AND                                                                   
DRYDOCK,  and MEMBER,  WORKFORCE  INVESTMENT  BOARD and  STEP                                                                   
TASKFORCE,  KETCHIKAN  (via  teleconference),   testified  in                                                                   
support of the  legislation. He listed membership  in several                                                                   
groups working  to employ  and train  people. He stated  that                                                                   
Alaska  Ship and Drydock  participates  in STEP. He  reminded                                                                   
the  committee that  in 2007  the  commissioner directed  the                                                                   
board to  provide for oversight.  He reported that  the board                                                                   
has successfully done the job,  as has the STEP taskforce. He                                                                   
urged passage of the legislation.                                                                                               
                                                                                                                                
Mr. Ward  spoke to  programs for  youth. He noted  individual                                                                   
training  accounts at  job centers  that can  be accessed  by                                                                   
youth seeking employment.                                                                                                       
                                                                                                                                
11:23:14 AM                                                                                                                   
                                                                                                                                
LINDA  HULBERT,  MEMBER, ALASKA  WORKFORCE  BOARD,  FAIRBANKS                                                                   
(via   teleconference),   testified   in   support   of   the                                                                   
legislation.   She   listed    extensive   involvement   with                                                                   
employment and  training programs  in Alaska. She  echoed the                                                                   
comments of  those supporting  the provision. She  emphasized                                                                   
that the fund is for a specific  group of people not normally                                                                   
funded by other  federal employment training  funds. Research                                                                   
and   analysis   by   DLWD   has   consistently   shown   the                                                                   
effectiveness of the program in  getting people back into the                                                                   
workforce. She  noted the importance  of Alaskans  being able                                                                   
to  control  the  funds  and  urged  passage  of  the  unique                                                                   
program.                                                                                                                        
                                                                                                                                
DON ETHRIDGE,  ALASKA WORKS  PARTNERSHIP AND ALASKA  AFL-CIO,                                                                   
spoke  in support  of the  bill.  He pointed  out that  rural                                                                   
areas  were targeted  by  Alaska  Works. He  addressed  youth                                                                   
training and stated he preferred not to use STEP funds.                                                                         
                                                                                                                                
Co-Chair Stoltze referred to the fiscal note.                                                                                   
                                                                                                                                
Co-Chair Hawker asked how funding  levels shown on the fiscal                                                                   
note  compared  with  the  current   funding  level  for  the                                                                   
program. Mr. Bell responded that  the levels were equivalent.                                                                   
                                                                                                                                
Vice-Chair  Thomas asked  whether  there was  a  GED or  high                                                                   
school requirement  to participate in STEP. Mr.  Bell did not                                                                   
think there was the requirement.                                                                                                
                                                                                                                                
11:28:10 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Thomas  noted  GED   or  high  school  graduation                                                                   
requirement for the apprenticeship  program. Mr. Bell replied                                                                   
that there  were entrance  criteria set  by various  training                                                                   
programs; the  criteria are  not set by  STEP. He  added that                                                                   
often a training  component is added for persons  who need to                                                                   
get to a certificate level.                                                                                                     
                                                                                                                                
Vice-Chair Thomas stated concerns  that with the high rate of                                                                   
dropout, there  might be  more incentive  to quit school.  He                                                                   
suggested  a  side  bar  requiring   a  GED  or  high  school                                                                   
equivalency.                                                                                                                    
                                                                                                                                
Co-Chair Stoltze read the legislation another way.                                                                              
                                                                                                                                
Ms. Moss  noted that a GED  is not required for  the program.                                                                   
She stated concerns  that the requirement could  be a problem                                                                   
for someone who has been working for years without a GED.                                                                       
                                                                                                                                
Vice-Chair  Thomas  reiterated  concerns  regarding  drop-out                                                                   
rates. Ms. Moss  thought the point should be  brought up with                                                                   
Department  of Education  and Early Development,  as  part of                                                                   
the  problem  could  be  youth  who  do  not  get  vocational                                                                   
training in high school. She gave  an example of a North Pole                                                                   
school with a program that kept youth from dropping out.                                                                        
                                                                                                                                
11:31:10 AM                                                                                                                   
                                                                                                                                
Representative Gara  queried DLWD involvement  with Education                                                                   
and Training  Voucher (ETV)  funds provided  to youth  at the                                                                   
Office of  Child Services (OCS)  and wondered if there  was a                                                                   
way to ensure  the funds are  not cut off. Mr.  Bell promised                                                                   
to get more information.                                                                                                        
                                                                                                                                
Co-Chair  Hawker MOVED  to  report CCSS  HB  105(L&C) out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  notes. There being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSSS HB  105(L&C) was  REPORTED out of  Committee with  a "do                                                                   
pass"  recommendation  and with  attached  fiscal  note 1  by                                                                   
Department  of Labor  and  Workforce Development  and  fiscal                                                                   
note 2 by Department of Labor and Workforce Development.