03/19/1996 01:32 PM Senate L&C

                                                                               
         SB 276 CALCULATION OF UNEMPLOYMT INS BENEFITS                        
           SB 229 STATE TRAINING & EMPLOYMENT PROGRAM                         
                                                                              
 SENATOR KELLY announced  SB 276  and  SB 229  to be up for                    
 consideration.                                                                
                                                                               
 DWIGHT PERKINS, Special Assistant, Department of Labor, supported             
 SB 229.                                                                       
                                                                               
 SENATOR KELLY said he wanted to combine the two bills under SB 229.           
 He said there had been some questions about restructuring the                 
 insurance payments on the Unemployment Insurance Program to allow             
 the employee to pay a larger share of the proposed increase.  He              
 noted there was a letter from the Department of Labor called the              
 Employer and Employee Contribution proposal which caps the weekly             
 benefit amount at $248.                                                       
                                                                               
 MR. PERKINS discussed the letter for the committee.  He said that             
 right now the current level based on 70% of the average annual                
 Alaska wage is $22,500.  That equates to $212 per week for                    
 unemployment.  The proposal today increases the benefit by $2 for             
 every $250 increase in wage.  The maximum unemployment would be               
 capped at $248 per week.  He said this would be locked in statute,            
 not to be changed until some future date.                                     
                                                                               
 SENATOR KELLY remarked that the $212 in the original Governor's               
 bill had been replaced with the $248 minimum.                                 
                                                                               
 MR. PERKINS also commented on the step program saying that                    
 originally the program would be institutionalized.  There were                
 concerns with that in the Department of Labor and the Department of           
 Community and Regional Affairs and a two year sunset provision was            
 established.  The amount of administrative expenses would be capped           
 to 20 percent of the total amount of the step dollars coming into             
 the program.  That 20 percent would be less the agreement that the            
 Department of Labor has with the federal Office of Management and             
 Budget entitled Circular A87, Cost Principles for State and Local             
 Governments.  That would be outside the cap.                                  
                                                                               
 MR. Perkins said they receive funds from the Alaska Human Resource            
 Investment Council, Community and Regional Affairs, Department of             
 Labor (non-resident hire report), Municipality of Anchorage and               
 Fairbanks (service delivery areas).  All those cannot exceed 20               
 percent excluding the $250,000 in the Circular A87.                           
                                                                               
 SENATOR KELLY remarked that that was a real cap of about 26 or 27             
 percent.  MR. PERKINS agreed and said the Community and Regional              
 Affairs Committee also agree with these changes.                              
                                                                               
 SENATOR KELLY remarked that this is a unique program and what makes           
 it work is the flexibility away from all of the federal                       
 regulations.                                                                  
                                                                               
 MR. PERKINS explained there was another change regarding account              
 procedures for accuracy, efficiency, and to ensure compliance with            
 program requirements and generally accepted accounting principles.            
                                                                               
 MR. PERKINS said the administration supported merging these two               
 bills.                                                                        
                                                                               
 SENATOR TORGERSON asked if they were increasing the amount of money           
 made available in the step program by going to the 20/80.                     
                                                                               
 RON TORGERSON, Department of Labor, replied that the amount the               
 employee pays out is increasing.                                              
                                                                               
 Number 340                                                                    
                                                                               
 SENATOR TORGERSON moved to combine the two bills.  There were no              
 objections and it was so ordered.                                             
                                                                               
 SENATOR TORGERSON moved to pass CSSB 229 from committee with                  
 individual recommendations.  There were no objections and it was so           
 ordered.