Legislature(1995 - 1996)

02/07/1996 03:13 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 435 - STATE TRAINING & EMPLOYMENT PROGRAM                                
 Number 862                                                                    
 CHAIRMAN KOTT announced the next order of business would be HB 435,           
 "An Act relating to employment contributions and to making the                
 state training and employment program a permanent state program;              
 and providing for an effective date."                                         
 Number 903                                                                    
 DAVID DEAN testified via teleconference from Fairbanks.  He said he           
 is fairly familiar with the state training employment program since           
 he works with an office that administers the pilot program that has           
 been in existence for several years.  He said he is also familiar             
 with the benefits it has provided to residents throughout the                 
 state.  Of all the of the employment training programs available to           
 Alaskans, none compare to the flexibility and benefits this program           
 has offered.  Many unemployed workers have obtained funding for               
 short duration training and immediately obtain a job after                    
 completing their training.  Without the benefit of the (indisc.)              
 funding, there would have been no alternatives except to continue             
 on unemployment or some of the social welfare programs that                   
 currently exist.  Mr. Dean pointed out that it is important to                
 remember that the Step Program doesn't supplant the existing                  
 programs, it greatly enhances them.  On the surface this program              
 sounds too good to be true.  Residents obtain job related skill               
 training, unemployment insurance payments are reduced, non resident           
 workers don't take Alaskan jobs and there is no cost to the state.            
 Funding is obtained from working Alaskan's contributions to the               
 unemployment insurance trust fund in a perpetual process almost               
 assuring the fund is replenished by those who are working.  The               
 program allows the work force to take advantage of technological              
 improvements in the workplace as they develop and not after someone           
 from the Lower 48 arrives in Alaska to take another Alaskan's job.            
 Mr. Dean urged passage of HB 435.                                             
 CHAIRMAN KOTT referred to Mr. Dean's comments regarding non-                  
 residents don't take Alaskan jobs.                                            
 MR. DEAN explained through technological advances, if the work                
 forces isn't trained locally, there will be non-residents coming              
 into the state to take those jobs that Alaskans now hold because              
 they're not advancing in the state of art training.  The bill funds           
 training and keeps it current.  A lot of that training currently is           
 offered in the Lower 48.  People get the experience or                        
 qualifications and then they move to Alaska where the jobs are.               
 Mr. Dean said he thinks the Step Program prevents some of that                
 because it allows for the training of our own work force.                     
 Number 1035                                                                   
 CHAIRMAN KOTT referred to the Department of Labor's most recent               
 annual report regarding non Alaskans work in the state of Alaska in           
 1984, and said there are 77,000 non-residents working in Alaska.              
 We must do something to ensure Alaskans work in Alaska.  He added             
 that the unemployment rate during that same period ranged from                
 5,000 to 17,000.                                                              
 Number 1140                                                                   
 REBECCA NANCE, Director, Central Office, Division of Employment               
 Security, Department of Labor, came before the committee to testify           
 on HB 435.  She said she believes the committee members have                  
 received a brief program overview, the 1995 Executive Summary and             
 the sectional analysis of the bill.  She noted David Stone of Echo            
 Bay had to leave the meeting, but said she would submit written               
 testimony from him.                                                           
 MS. NANCE referred to Section 1 and said it is the legislative                
 findings.  It sets up the goals of the program which is basically             
 to train Alaskans for jobs and to reduce claims on the Unemployment           
 Insurance Program.                                                            
 MS. NANCE referred to Section 2 and said it simply codifies the old           
 temporary program and sets up a new chapter, Chapter 23.  Within              
 that chapter there would be eight sections.  Section 010 would                
 create the program as a permanent program using primarily the                 
 original language.  This is essentially the same bill that has been           
 in the pilot phase.                                                           
 MS. NANCE said Section 020 establishes the employment assistance              
 and training account in the general fund.  She said this isn't                
 general fund money, it is money that has been earmarked and then              
 the legislature appropriates the funds so they can be spent on this           
 MS. NANCE referred to Section 030 and said it provides the funding            
 mechanism for the program.  She said 1/10 of 1 percent of employee            
 wages go into this program and are earmarked.  The legislature                
 approve and appropriate those funds for this use.  The maximum                
 amount any individual would pay into this program as part of their            
 tax contribution would be $24 and some change, per employee, if               
 they max out on their wages.  She said she believes $24,200 is the            
 amount they pay of the 1/10 of 1 percent.                                     
 Number 1280                                                                   
 MS. NANCE referred to Section 040 and explained it targets the                
 population for the program.  She said she believes this is the part           
 of the Step Program that allows the flexibility that Mr. Dean spoke           
 to.  There are a lot of other federal programs such as dislocated             
 worker programs and the JTPA.  The guidelines and rules for the               
 JTPA Program are very very rigid.  The Step Program simply trains             
 Alaskans for Alaskan jobs.  The intended target group are past,               
 future or current recipients of unemployment insurance.                       
 MS. NANCE referred to Section 050 and said it defines the services            
 that must be provided.  Not all of these services must be provided            
 by a grantee, one or more of some sort of combination of services             
 listed must be provided by the grantee.                                       
 Number 1318                                                                   
 MS. NANCE said Section 060 defines the duties of the department in            
 terms awarding grants to the Alaska Human Resource Investment                 
 Council.  The council was established by the legislature last year.           
 It consolidated four councils into one council.  So, instead of               
 having four councils with 40 people, it consolidated into one                 
 council with 26 people.  Those people will be working under a                 
 subcommittee structure.  This supersedes the sunsetted Alaska Job             
 Training Council (AJTC) that used to get the grant awards.  Ms.               
 Nance said the council, as in the pilot program, may administer its           
 own employment and training programs or it may awards grants to               
 other entities as long as the target lists are adhered to and,                
 again, as long as the grantee provides one or more of the services            
 in Section 050.                                                               
 MS. NANCE explained Section 070 sets out the duties of the Alaska             
 Human Resource Investment Council in awarding step grants.  Again,            
 the flexibility really comes into play here.  She said Step isn't             
 interested in displacing current training programs in Alaska.  They           
 just want to fill the void where no training exists.                          
 MS. NANCE referred to Section 900 defines terms.                              
 MS. NANCE explained Section 3 simply provides an effective date of            
 July 1, 1996.                                                                 
 MS. NANCE informed the committee members the program has been a               
 very flexible program, it's Alaska specific, it is paid for and               
 utilized by Alaskan workers, it stabilizes employment and it keeps            
 Alaskans trained and ready to work in Alaska.  She urged support              
 for the bill.                                                                 
 Number 1430                                                                   
 REPRESENTATIVE ROKEBERG asked Ms. Nance to explain the 1/10 of 1              
 percent, the impact, the fund raising aspects and the cost to                 
 Alaskan workers.                                                              
 MS. NANCE said the 1/10 of 1 percent is the employee wage                     
 contribution.  The employer does not pay for this, the employees              
 do.  There is a ceiling on the amount they can pay in and 1/10 of             
 1 percent is $24.20.  The employee rate is 1/2 of a percent of                
 their wages to the $24,000 figure.  This year there is about $3.5             
 million in the Step program that is employee contributions.                   
 REPRESENTATIVE ROKEBERG questioned whether any collections will be            
 changed.  MS. NANCE said it is identical to pilot that has been in            
 effect for the last six years.  The only significant change is that           
 we're moving to the Human Resource Investment Council instead of              
 the Job Training Council.                                                     
 REPRESENTATIVE ROKEBERG asked if there is an employer contribution.           
 MS. Nance said no.                                                            
 Number 1530                                                                   
 CHAIRMAN KOTT asked how much is the percentage that employees are             
 currently paying.  MS. NANCE said employees pay 1/2 of 1 percent of           
 their wages up to $24,200 into the unemployment insurance trust               
 fund.  She pointed out Alaska is only one of four states that has             
 employees paying into it at all.                                              
 CHAIRMAN KOTT asked Ms. Nancy if she is paying into it.  MS. NANCE            
 indicated she is not.  Chairman Kott asked if he is paying into it.           
 Ms. Nance said she is not aware of Chairman Kott's businesses                 
 outside of the legislature.                                                   
 REPRESENTATIVE SANDERS said he is paying into it and he believes it           
 is a great idea.  CHAIRMAN KOTT asked if it is reflected on his               
 earnings.  Representative Sanders indicated it is reflected on his            
 MS. NANCE pointed out that if this isn't made permanent, the Step             
 program will go away, it sunsets.                                             
 Number 1660                                                                   
 CHAIRMAN KOTT noted the committee didn't have a quorum present so             
 action couldn't be taken on the bill.  He announced the bill would            
 be held over until the next Labor and Commerce Committee hearing.             
 REPRESENTATIVE ROKEBERG noted the bill has a number of committee              
 referrals.  CHAIRMAN KOTT said there are four committees of                   
 referral.  He also said his understanding is that there is no                 
 fiscal impact.                                                                
 MS. NANCE said there is no fiscal impact, it is basically a wash,             
 and anything that is not spent goes back to the unemployment trust            
 fund.  There is no impact.                                                    
 Number 1774                                                                   
 REPRESENTATIVE ROKEBERG referred to an employees paycheck and asked           
 if this shows up as a separate line item.  MS. NANCE said it is               
 included in the unemployment insurance contribution.                          

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