Legislature(2017 - 2018)BARNES 124
03/10/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB2 | |
| HB108 | |
| HB141 | |
| HB132 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 132 | TELECONFERENCED | |
| += | SB 14 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 2 | TELECONFERENCED | |
| += | HB 108 | TELECONFERENCED | |
| += | HB 141 | TELECONFERENCED | |
HB 141-AK WORKFORCE INVESTMENT BOARD;FUNDS
3:28:50 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 141, "An Act relating to allocations of funding
for the Alaska Workforce Investment Board; and providing for an
effective date."
3:29:29 PM
JON DUFENDACH, Treasurer, Partners for Progress in Delta,
referred to a 2/6/17 letter directed to Governor Bill Walker
from Commissioner Heidi Drygas, with regard to non-resident
employment, and he read as follows:
We know it's not enough to encourage Alaska hire only
on state projects, but we have looked for creative
solutions to address the high rates of
residential/non-residential hire in other industries.
Administrative Order 278 is part of that effort and it
incorporates apprenticeship targets in oil and gas
projects. Research shows that apprenticeships are a
powerful tool to encourage Alaska hire rates, in
addition to their workforce development benefits for
employers.
MR. DUFENDACH noted that employment rates in the area of non-
residency are over 40 percent in the oil industry, and 25
percent in the Operating Engineers Union. He said, "We operate
a construction trade academy here in Delta" in an effort to
train Alaskans and offer access to jobs in the construction and
oil industries. He offered appreciation that the Delta Mine
Training Center is now part of the University of Alaska system
and is working with Partners for Progress in Delta. He urged
the committee to consider an extension of the UA Technical
Vocational Education Program (TVEP) and to continue providing
training for Alaska's young resident workers.
3:32:18 PM
DON ETHERIDGE, Lobbyist, Alaska American Federation of Laborers
- Congress of Industrial Organizations (Alaska AFL-CIO), said
the Alaska American Federation of Laborers - Congress of
Industrial Organizations (Alaska AFL-CIO) supports HB 141, and
advised that the organization funds its own training. He
commented that when this program first began, he worked with the
Alaska Works Partnership Program, AFL-CIO, and several people to
put this program "into business" and they would like to see it
continue. He remarked that the only benefit "we get out of it"
is we go out and cherry pick some of the top students for its
apprenticeship programs which has furthered these students'
careers over the years. The main issue is local hire, and if
Alaska does not have the people trained to take the oil and gas
and construction jobs, then there is no argument when people
start coming in from outside to take the jobs. The goal, he
offered, is to train Alaskans for these jobs, and the Alaska
AFL-CIO is in support of these programs.
3:33:56 PM
REPRESENTATIVE BIRCH offered concern that the dollars come out
of the unemployment insurance slice of an existing employee's
pay, such that a piece of every hour of their paycheck goes to
unemployment insurance. He commented that it appears these are
being syphoned off or reallocated to this program, and asked how
that benefits the individual whose paycheck it comes out of
ostensibly for unemployment insurance.
MR. ETHERIDGE suggested that when looking at the issue as per
person, "it doesn't." Although, he explained, it is still not
causing harm either because the program is solvent and if a
person is out of work they can draw unemployment funds. His
view, he advised, is that it saves the overall fund money, to
leave it out there for other people to use without having to
increase it, if the unemployed people get enough training to go
to work. Also, he explained, in the event the person has an
opportunity to go to work and not draw unemployment, that saves
money, and "they" don't have to increase the rates later on in
order to make the program solvent.
3:35:48 PM
REPRESENTATIVE BIRCH pointed out that it appears $12 million is
coming out of the paychecks of working Alaskans identified as
unemployment insurance. Therefore, he said, there's a $12
million slice of unemployment insurance basically going to train
someone else, and he said, "we're trying to figure out whether
that could be increased, decreased, put into vocational schools
in the school district, and so forth." It appears, he said, to
not be a truthful representation to the working individual when
they think they are paying unemployment insurance and, in fact,
$12 million is being redirected. He pointed out that there is
no question it is for a worthy purpose, but money is taken out
of a working person's pocket to train someone else to possibly
come in and take their job, for instance.
3:36:50 PM
MR. ETHERIDGE responded that most of the individuals going
through [TVEP programs] have paid into the funds and are reusing
some of their own funds in many cases. He commented that it is
probably not absolutely fair that it only goes to these few
programs, but those are the programs "we picked out when we
first started it." Initially, he said, there were only four to
five programs and with each allocation "the pie got smaller" for
each group. Speaking as someone who has paid unemployment
insurance all of his life, he said that he does not begrudge any
of that money training someone else to further their career and
enhance local hire in Alaska. He stressed that if the state has
to spend a bit of money to train these people so Alaskans are
able to get those jobs, "I think we need to do it."
3:38:42 PM
GRETA SCHUERCH, Liaison, Governmental and External Affairs, NANA
Regional Corporation, advised that the UA Technical Vocational
Education Program (TVEP) has served as an essential funding
source to the Alaska Technical Center based in Kotzebue, and it
serves as a catalyst for individuals to develop various career
tracks. The Alaska Technical Center (ATC) is an adult
vocational and technical school for all Alaskans, she described,
which has been an essential player in the advancement of the
collective workforce development efforts within the region. She
commented that it benefits employers, such as the Northwest
Arctic Borough School District, NANA Regional Corporation, and
the Red Dog Mine through core programs, and it includes tracks
and business technology, health occupations, construction trade
technology, culinary arts, process technology, and offers a
variety of short courses meeting the needs of local employers
and business partners. In 2016, she offered, 696 individuals
graduated, and 81 percent of whom are currently employed. The
TVEP has had a tremendous positive impact statewide, and she
pointed to the Youth Learning Center in Bethel, which serves a
key role in the dental health aide therapy program benefiting
all areas of the state through its rigorous dental training
program, and whose graduates provide mid-level dental care in
small rural communities throughout Alaska. The NANA Regional
Corporation shareholders also benefit from other programs funded
through TVEP at the University of Alaska, the Galena Interior
Learning Academy, Alaska Vocational Technical Center, and the
INANA Regional Corporation appreciates
the legislature's continued support for secondary, post-
secondary, and adult education that prepares Alaskans for future
jobs in Alaska, she said.
3:41:28 PM
CHAIR KITO, after ascertaining no one wished to testify, closed
public testimony on HB 141.
3:42:02 PM
PALOMA HARBOUR, Director, Central Office, Division of
Administrative Services, said she was available for questions.
REPRESENTATIVE SULLIVAN-LEONARD asked Ms. Harbour whether the
funding dispersed from 2000 to present was $142.5 million.
MS. HARBOUR responded that the cumulative total through FY 2017
was $142.5 million.
3:42:51 PM
REPRESENTATIVE SULLIVAN-LEONARD asked the amount of dollars, per
employee, which has been paid into the system from 2000 to 2016.
MS. HARBOUR advised that she did not have that analysis with
her, but the Research and Analysis Section of the department
calculates the total number of employees in Alaska, how many
employees are resident/non-resident, and she could go back and
prepare that analysis.
3:43:44 PM
REPRESENTATIVE SULLIVAN-LEONARD noted that she was looking for a
ball park figure. She asked whether other pieces are taken out
of unemployment insurance for government funding.
MS. HARBOUR answered that the department funds two different
programs: the State Training and Employment Program (STEP) which
performs competitive workforce development grants; and the
Technical and Vocational Education program is designated to the
recipients in statute.
REPRESENTATIVE SULLIVAN-LEONARD explained that she would like to
know whether additional money is taken from unemployment
insurance that would go toward these types of grants.
MS. HARBOUR reiterated that the STEP and TVEP programs are the
two programs that come out of employee contributions to
unemployment insurance. She referred to the previous response
she provided to Chair Kito's office and explained that it shows
the employee's contribution to unemployment insurance, the STEP
and TVEP contribution, how much money is deposited into the UI
Trust Fund, and how much money is deposited into the STEP and
TVEP accounts.
3:45:15 PM
REPRESENTATIVE JOSEPHSON asked whether the other 49 states have
technical training assistance for these two programs, such as
Alaska.
MS. HARBOUR responded there are other funding mechanisms in
other states for training, but they do not originate from
employee contributions to unemployment insurance. Alaska, New
Jersey, and Pennsylvania, are the only three states in the
nation that collect employee contributions for unemployment
insurance, and New Jersey and Pennsylvania do not have a similar
program for training out of that funding.
3:45:58 PM
REPRESENTATIVE JOSEPHSON asked for clarification that there are
only three states in the union requiring the employee to
contribute to unemployment insurance.
MS. HARBOUR answered that Representative Josephson was correct.
REPRESENTATIVE JOSEPHSON said, notwithstanding Alaska being one
of the three states, Alaska has low unemployment insurance
benefits relative to sister-state Washington State.
MS. HARBOUR responded, "Correct," and she opined that Alaska has
a 30 percent wage replacement rate in its maximum unemployment
insurance payment to Alaskans, but she did not have the exact
figure with her today.
REPRESENTATIVE JOSEPHSON asked whether she knew the 30 percent
number to be lower than the mean.
MS. HARBOUR responded "Yes," and she said she did not want to
misspeak because she is not an expert on unemployment insurance,
but opined that Alaska is on the very bottom in states' maximum
weekly benefit payments.
3:47:09 PM
REPRESENTATIVE KNOPP asked how Alaska compares as far as
contributions rates to the other states.
MS. HARBOUR asked whether Representative Knopp was asking about
the employer and employee contribution rates.
REPRESENTATIVE KNOPP referred to the percentages "we pay on
payroll," and asked how Alaska compares to other states because
obviously less benefits are received under a claim. He inquired
as to how Alaska stands as far as the contribution rates
compared to the other states with revenue versus expenditure.
MS. HARBOUR answered that she could speak to TVEP, but she could
not speak to the unemployment insurance program, and she did not
know the answer to that question.
REPRESENTATIVE KNOPP reiterated his request for the unemployment
rates, employee/employer total contribution rates, and how
Alaska compares to the other states. Obviously, he commented,
Alaska is substantially low in the benefits section. He asked
how Alaska rates in terms of contribution.
MS. HARBOUR said she would look into the contribution rates. In
response to Representative Josephson, she said she received a
message that Alaska is 39th in the United States per maximum
weekly benefits.
3:48:52 PM
REPRESENTATIVE WOOL surmised that Alaska is one of the three
states wherein the employee pays into the unemployment insurance
contribution, and asked whether the other states are all
employer only.
MS. HARBOUR said that Representative Wool was correct, for all
of the other states it is solely employer contributions.
3:49:22 PM
REPRESENTATIVE BIRCH referred to STEP and TVEP, and asked
whether STEP is the same dollar magnitude, for example, if it
was $142 million for employee unemployment insurance
contributions going to TVEP, and whether it was roughly the same
for STEP.
MS. HARBOUR answered that she did not run those numbers, but
opined that it is less. The STEP contribution is 0.1 percent
and TVEP is 0.16 percent, possibly two-thirds, she said.
3:50:37 PM
REPRESENTATIVE ZACH FANSLER, Alaska State Legislature, in
response to Representative Knopp, said that a quick internet
search indicated Pennsylvania employees contributes 0.07
percent, and New Jersey employees contribute 0.3825 percent
according to the 2016 Fast Wage and Tax Facts.
3:51:26 PM
REPRESENTATIVE KNOPP asked what Alaska's employee/employer
combined contribution rate is.
REPRESENTATIVE FANSLER replied that the Alaska employee
contribution is 0.5 percent, and the employer contribution is
1.01 percent.
3:52:31 PM
REPRESENTATIVE JOSEPHSON commented that he agrees with
Representative Birch and said the line item on a paycheck has
the unemployment insurance, and it should say "UI, TVEP STEP."
That would be truth in description, he described, but it is a
policy call about whether, why, or how much to fund through
this. This legislation is about something quite different, he
related that it is about extending a program that does many
things besides TVEP. He noted that he does not have children,
but as part of the social compact, he invests some of his
property taxes in public schools, police officers, and so forth,
"and I am okay with that." This is the way the world often
works, and he described it as a sharing of responsibility.
3:54:08 PM
REPRESENTATIVE STUTES offered that she is in full support of the
bill and opined that the committee members have paid into
unemployment insurance as an employee or employer. She said she
is happy to know that at least some of that money is going to
retrain people that she could possibly use in her business.
Alaska is "pulling up the rear" in trained individuals, and
vocational training particularly, such as plumbers, or
refrigeration operators for the seafood processing plants, she
commented.
3:55:19 PM
REPRESENTATIVE KNOPP related that he is also a fan of vocational
training, especially because Alaska is large and diverse, and
the local communities decide which type of vocational training
best suits its needs geographically. He said he does not
disagree with Representative Birch and the funding mechanism
could be debated at another time, but in some manner it will be
funded and right now he doesn't see a better option.
3:56:01 PM
REPRESENTATIVE WOOL moved to report HB 141, labeled 30-LS0551\A,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, HB 141
passed from the House Labor and Commerce Standing Committee.