Legislature(2007 - 2008)CAPITOL 106
03/15/2007 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| HB159 | |
| HB2 | |
| HB140 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 159 | TELECONFERENCED | |
| *+ | HB 2 | TELECONFERENCED | |
| *+ | HB 140 | TELECONFERENCED | |
HB 2-VOCATIONAL EDUC ACCOUNT 3:08:42 PM CHAIR WILSON announced that the next order of business would be HOUSE BILL NO. 2, "An Act relating to the vocational education account and appropriations from that account; and providing for an effective date." 3:09:35 PM REX SHATTUCK, staff to Representative Mark Neuman, Alaska State Legislature, speaking on behalf of the sponsor, introduced HB 2, which creates a vocational education account in the general fund (GF). Mr. Shattuck said that HB 2 will provide an opportunity for businesses to help create opportunities for secondary school students by supporting vocational education in anticipation of future construction projects in the state. The bill will allow gifts, bequests, and contributions to the fund that will be directed by the commissioners of the Department of Labor & Workforce Development (DLWD) and the Department of Education and Early Development (EED). 3:11:03 PM REPRESENTATIVE NEUMAN stated that this bill has taken two years to draft. The past and present commissioners of the DLWD and the EED, and their departments, have been consulted and support HB 2. He explained the importance of vocational skills to the applied sciences of math and reading, and noted that the lack of vocational education has affected rural Alaska primarily. Representative Neuman said that the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), the electrical unions, and other construction industry organizations fully support this aid to vocational education. HB 2 will allow private industry to fund vocational education in the public schools, without violating the state constitution's prohibition of dedicated funds, and will also meet the federal No Child Left Behind mandate. He explained that HB 2 has four functions. The bill will create a vocational education account that holds funds separate from special education. In addition, the bill provides for the acceptance of tax exempt contributions from the industry toward the vocational educational account. The language of the bill will allow participation throughout the state and includes courses taught at the secondary and postsecondary levels of education. 3:16:06 PM REPRESENTATIVE NEUMAN further explained how HB 2 will reach every child in the state. He is working with every school district to identify its needs in vocational education. Using this information, private industry can be called upon to respond by funding the vocational education account. For example, the McGrath school has a metal shop that is not being utilized; no instructor. The McGrath School could receive funds from the account to support a metal shop teacher and, thereby, reinstate shop classes. The DLWD can contact industry across the state to respond to the needs of the local schools. This will provide funds to reach every child in Alaska. If someone in the community has an expertise, as established by DLWD, and in consultation with the EED, a qualified lay person could teach vocational classes. Currently the state holds standards for core subjects. If a non-certificated instructor and the EED can set up a curriculum to meet the grade appropriate levels in the core subjects, funding provided by this bill will pay for the instructor's salary and teaching materials. 3:22:20 PM REPRESENTATIVE NEUMAN provided a personal story of the benefits from vocational education. He went on to say that unions and private industry do provide apprenticeship programs; however, exposure at the high school level is a critical step towards motivating a student to pursue his/her interest in a future career. He pointed out that the bill also includes vocational training programs and courses taught at the secondary and postsecondary level of education. 3:24:37 PM REPRESENTATIVE NEUMAN reiterated that this bill accomplishes four major purposes: allows for the vocational educational account; allows for gifts, bequests, and contributions from private industry; is accessible to every high school student in the state; is accessible to every secondary and postsecondary student in the state. He stressed that the language is brief, so as not to tie the hands of the departments involved, who are the experts on implementation and regulation of the bill. 3:26:19 PM CHAIR WILSON asked how private industry, such as BP Exploration (Alaska) Inc., would give a particular school money. REPRESENTATIVE NEUMAN answered that private industry can make a donation to any school now. However, with the existence of the vocational educational account, they can direct the funds to a certain purpose and they may receive a federal tax deduction. 3:27:06 PM REPRESENTATIVE FAIRCLOUGH stated that there is also a corporate income tax bill that will address deductions for donations to schools. She continued to say that this other bill may provide an additional incentive to those who support the vocational educational account. REPRESENTATIVE NEUMAN added that this type of account would allow the governor to more easily direct available funds through the Department of Revenue (DOR) to vocational education. REPRESENTATIVE FAIRCLOUGH stated that private foundations and corporations are able to support municipalities and other government agencies, in a similar fashion. 3:28:58 PM REPRESENTATIVE SEATON said that the structure of the bill is that the money would be brought into the general fund and the commissioners will determine which schools receive the funds. He opined that it is not clear that a corporation could identify a particular school to contribute to, and support that interest directly. 3:30:05 PM CHAIR WILSON provided permission to Representative Neuman to outline the parallel bill. 3:30:43 PM REPRESENTATIVE NEUMAN responded that, under the terms of the related bill, corporate funds can be directed to a specific school, or program, and be eligible for a federal tax deduction. HB 2 will allow the commissioners of DLWD, EED, and DOR to set up the working structure and insure that politics will not become involved in the distribution of the vocational education account. 3:32:28 PM CHAIR WILSON asked how a corporation can be assured that their funds will be directed to a specific purpose. REPRESENTATIVE NEUMAN explained that HB 61 will provide a 50 percent corporate tax credit, on benchmark amounts, as an incentive for contributions to vocational education. He said that from millions of dollars of corporate taxes paid to the state, a small amount of private industry money, paid through HB 2, will be dedicated to supporting vocational education. 3:34:39 PM REPRESENTATIVE SEATON described the structure of the bill as providing that corporations "A" and "B" will donate funds to the state of Alaska and the commissioners will have a statewide program drawing from that fund. He confirmed that the account is not specific to, for example, the intent of ConocoPhillips Alaska, Inc., providing funds to train welders. The commissioners of EED and DLWD will be making the decisions on the programs that will be funded. 3:35:49 PM REPRESENTATIVE NEUMAN affirmed that HB 2 will be the first statute requiring two departments to work together. The commissioners will coordinate the needs of the schools and prioritize the distribution of funds. He stressed that this could help to plan for future workers needed in particular areas, and the bill provides the flexibility to define those needs. 3:37:57 PM REPRESENTATIVE ROSES observed that the concept of the bill is worthy but the application process seems difficult. He opined that the bill will be set up in a grant structure. If it becomes a grant situation, often those with matching funds are the first to receive additional funding. He stated that this may be an unintended consequence of the bill, but it is important to identify how this fund will be distributed. 3:40:08 PM REPRESENTATIVE NEUMAN replied that the best answer is that the commissioners will set up the regulations and structures for distribution because they have the expertise. REPRESENTATIVE ROSES asked whether there is language in the bill authorizing the commissioners of EED and DLWD to set the program up, and then come back to the legislature for approval of the program. REPRESENTATIVE NEUMAN said no. 3:41:17 PM REPRESENTATIVE FAIRCLOUGH suggested the committee take public testimony. 3:42:04 PM BOB POE, President, Anchorage Economic Development Corporation (AEDC), began his testimony by indicating his organization's support for HB 2. He stated his agreement, also, with many of the important points previously discussed. The AEDC is concerned with Alaska's ability to have qualified workers available when large projects, such as the gas pipeline, get underway. Anchorage and Fairbanks are growing job markets today and many companies have concerns about finding qualified workers, especially to replace retirees. Mr. Poe said that the AEDC sponsored the Alaska Workforce Development Conference in October, 2006, to address this challenge. As a result of the conference, four action statements were developed. First, establish a career and technical education outreach program with tax benefits to employers. Secondly, expand the capabilities of the Alaska Labor Exchange System (ALEXsys). Next, establish an articulated career and technical education program. Finally, the governor and legislature should restructure the Alaska Workforce Investment Board (AWIB). He stressed that a workforce development program must include the elements of state offices, labor, universities, and the private sector. Mr. Poe concluded by saying that investment by the legislature in educational programs for workforce development is an investment in future revenue. 3:49:56 PM LAMONT ALBERTSON informed the committee that he has lived and worked in Aniak and Bethel for 40 years. He provided a brief history of working as a teacher and school administrator in the state. He stated his support for HB 2, citing how vocational classes are not being offered in rural areas, even though the jobs available there require vocational skills. He opined that this bill would "go a long way" in providing these opportunities and will be supported by private industry. 3:51:53 PM REPRESENTATIVE SEATON asked whether every school across the state would have a shop, or whether money would be directed to a specific school by a corporation. MR. ALBERTSON expressed his belief that the political process is such that if a corporation worked with the commissioners, the instructors would be placed where they are needed. REPRESENTATIVE SEATON stated his belief that vocational education is needed across the state and the testimony seems to indicate that money from businesses will be directed to specific programs. He said that HB 2 does not set out the direction of the funding. 3:54:03 PM MR. ALBERTSON replied that the programs are needed throughout the state, but vocational education is not a part of the core curriculum. HB 2 will support students by training them locally and, thereby, enabling them to stay and work in the area where they were raised. 3:55:06 PM CHAIR WILSON closed public testimony. 3:55:19 PM CHAIR WILSON expressed her belief that the bill needs to clarify how a corporation can donate directly to a specific school. 3:56:37 PM REPRESENTATIVE NEUMAN recalled that he also attended the Alaska Workforce Development Conference and suggested that a workforce development board may be the appropriate entity to help distribute the funds. The bill will establish legislative intent and, yet, allow the departments to develop regulations without political problems, such as cost differentials. Representative Neuman informed the committee that Dick Luther, Special Assistant, Office of the Commissioner, Department Education and Early Development, will be contacting him to work on structuring the programs. 3:58:29 PM REPRESENTATIVE CISSNA recalled that legislative intent is not always correctly interpreted at the administrative level. It is essential that any programs that are made available by these funds are distributed in a fair way. She encouraged the sponsor to look for ways to answer the questions about the bill. 4:01:17 PM REPRESENTATIVE FAIRCLOUGH emphasized that HB 2 will create a line item account, not a public fund trust account. This bill proposes a line item account similar to the Railbelt energy fund. Page 1, line 12, [subsection] (a) states that money may be appropriated by the legislature to the state or political subdivision. She stated that Representative Neuman has presented his thoughts about the use of the funds, but the department administering the funds will develop the regulations and submit them for public and legislative comment. On page 2, HB 2 stipulates that the commissioner of the DLWD, in consultation with the commissioner of the EED, will be approving programs and courses. Representative Fairclough pointed out that the sponsor is not creating the structure or framework for programs through this bill, but is creating a repository for private industry's participation in vocational education. She proposed that this committee forward the bill to the finance committee, as the legislature has total control over a line item in the general fund through the budget and appropriation process. 4:04:25 PM REPRESENTATIVE FAIRCLOUGH moved to report HB 2, 25-LS0006\C, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE CISSNA objected. 4:04:48 PM REPRESENTATIVE CISSNA expressed her understanding that a simple line in the budget could have school funding matters attached to it. 4:05:15 PM CHAIR WILSON also stated her reservations about how this fund would be distributed. 4:05:47 PM REPRESENTATIVE NEUMAN affirmed that the bill makes a repository for private corporation funding to support vocational education. REPRESENTATIVE FAIRCLOUGH reiterated that the bill is a line item to create a fund for deposit. She pointed out that, if no one donates, there will be no funds; however, if a corporation would like to support vocational education, then the repository will be available. She added that a memorandum of understanding could be developed in any region to create partnerships with private industry, local schools and state government. The funds will not be distributed without the approval of the legislature. She suggested that the House Finance Committee will be able to determine whether further regulation is needed. 4:08:45 PM REPRESENTATIVE SEATON observed that, as HB 2 is to establish a fund and not a program, perhaps there is no confusion, and stated his support for the bill. 4:09:31 PM CHAIR WILSON agreed. 4:09:53 PM REPRESENTATIVE CISSNA removed her objection with a comment. She then remarked: One of the real tragedies in Alaska ... is that ... throughout Alaska, in the smallest community's ... schools, there are essentially buildings that are almost like museums, of all the different phases of technology ... that were brought into the areas at some time. ... Those small communities wind up receiving millions of dollars, oftentimes, in those things that never were really ... thought through. ... This will be yet another possible continuation of that.... 4:12:17 PM There being no further objection, HB 2 was reported out of the House Health, Education and Social Services Standing Committee.
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