Legislature(1995 - 1996)

02/14/1996 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 1847                                                                   
 CHAIRMAN KOTT announced the committee would hear 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."  He said the bill was introduced            
 by the Administration and deals with state training in the                    
 employment program.  At the last hearing on the measure, there was            
 testimony given by the Department of Labor suggesting the bill is             
 a good bill.                                                                  
 Number 1889                                                                   
 DWIGHT PERKINS, Special Assistant, Office of the Commissioner,                
 Department of Labor, explained the bill relates to a pilot program            
 that has operated over the last six years very successfully.  He              
 encouraged the committee to give the bill their consideration and             
 to institutionalize the program.                                              
 CHAIRMAN KOTT referred to the word "institutionalize" and said Mr.            
 Perkins doesn't mean to lock the bill up.  MR. PERKINS said he                
 would like the program to be a permanent program.  He noted the               
 committee members have in their packets a copy of the program's               
 executive summary which talks about the program since its                     
 inception.  In the second half of 1989 (Fiscal Year 90), and July             
 of 1994, State Training Employment Program spent $9.79 million                
 towards providing training and services to 4,890 individuals.  The            
 program is paid for by the working employees, 1/10 of 1 percent is            
 deducted and .5 percent of the ESD goes towards that.  There are no           
 general fund or federal monies appropriated to the program.  The              
 program helps to upgrade employee's skills.                                   
 CHAIRMAN KOTT asked why we should force the employed, who likely              
 paid for their own training, to subsidize the training of others,             
 the unemployed.                                                               
 Number 2223                                                                   
 MARK MICKELSON, Manager, JTPA/SDA Program, Division of Community              
 and Regional Development, Department of Community and Regional                
 Affairs (DCRA), came before the House Labor and Commerce Committee.           
 He referred to the question of why should there be a subsidy, an              
 opportunity, a fund, to provide for additional training and said              
 the answer, in his mind, is fairly simple.  It is because most                
 people are not saving for training for themselves, and many                   
 employers don't have funds dedicated for training.  The STEP                  
 Program has been both employer friendly and employee friendly, in             
 the sense that it has provided an incentive and an opportunity for            
 many people and businesses to invest in additional skills and work            
 force readiness for the Alaskan work force.  The STEP Program has             
 provided training for over 5,000 people.  In many cases, it has               
 been for Alaskans to upgrade their skills to make them more                   
 competitive against out-of-state job seekers.  He referred to the             
 Fisheries Community Development Program and said they made a                  
 significant difference in providing training for hundreds of rural            
 Alaskans to be competitive in the bottom fish offshore industry.              
 They have done some very innovative things with trades in respect             
 to providing incentive for outreach and recruitment, pre-                     
 apprenticeship work in rural areas where traditionally the trades             
 have not had a very strong presence.  It is an incentive that                 
 essentially rewards work.  Mr. Mickelson said it is not, in any               
 way, a duplication of existing programs.  The federal commitment to           
 employment and training is very meager and is getting slimmer.  He            
 said he is anticipating about a 30 percent reduction this year with           
 the federal commitment under the JTPA Program.  The STEP Program              
 has been a very flexible and adaptable program because the                    
 department gets to write the regulations.  Mr. Mickelson said in              
 1988, the legislature did a good job in researching other states              
 and how programs were structured.  It is an effective tool to                 
 promote more Alaskan hire and greater skills.                                 
 Number 2442                                                                   
 REPRESENTATIVE PORTER asked how the program is funded.  He also               
 asked how an employee or employer who is interested in having                 
 additional training for employees would go about getting into the             
 program.  [End of Tape...]                                                    
 TAPE 96-9, SIDE A                                                             
 Number 001                                                                    
 [Part of Mr. Mickelson's response wasn't recorded during the                  
 changing of the tape.]  MR. MICKELSON explained the maximum an                
 employee contributes to the program is approximate $24 for a year.            
 The $24 does not impact an employee's benefits.  He referred the              
 question of how an employer or employee would access the fund and             
 said the money is currently provided down through the employment              
 training structure in the state.  Currently, there are three                  
 service delivery areas.  There is an Anchorage Mat-Su consortium              
 that is administered by the municipality of Anchorage.  There is a            
 Fairbanks Private Industry Council.  There is then a balance of               
 state or statewide.  He referred to the rural areas of the state              
 and said that has been the DCRA's area of operations.  Once the               
 department receives the grant, they make funds available, generally           
 through a competitive solicitation to the businesses, the                     
 educational agencies and to individuals who are seeking assistance.           
 So any individual who becomes unemployed, goes in unemployment                
 insurance, will be advised of this in the employment service                  
 offices.  They will be made aware of these services by any                    
 educational agency providing the service and by word of mouth.                
 MR. MICKELSON noted the program could be applied in Pelican since             
 the cold storage closed.  He noted staff will be sent there to have           
 discussions about possible resources, and STEP might be one                   
 resource if there is inadequate federal money to provide help.  He            
 noted he has had discussions with staff in the DCRA Interior office           
 with respect to providing additional training in the mining                   
 REPRESENTATIVE PORTER asked if the training is available just to              
 people who are unemployed or if it is available for upgrading                 
 employed people's skills.                                                     
 MR. MICKELSON explained there is an eligibility criteria that                 
 allows training for those who have exhausted unemployment insurance           
 benefits.  Another criteria is for those who may be facing a                  
 potential layoff due to plant closure, technological changes or               
 advances, etc.  Mr. Mickelson said an employer could approach the             
 department and ask for assistance to retain staff if they could               
 identify a specific training need that was appropriate.                       
 Number 332                                                                    
 CHAIRMAN KOTT asked what the ceiling is that an employee pays.  MR.           
 MICKELSON said he believes it is in the neighborhood of $24.                  
 CHAIRMAN KOTT said he remembers it being a very small amount.  He             
 said he thinks that ceiling is reached for an employee who makes              
 about $11,000.                                                                
 Number 413                                                                    
 REPRESENTATIVE ROKEBERG referred to page 8 of the Executive Summary           
 and said it appears there are a number of construction trade type             
 occupations that were covered by the STEP Program, including                  
 painters, electricians, plumbers, pipe steam fitters, carpenters,             
 roofers and sheet medal workers.  He asked if this isn't something            
 that the craft councils of the various unions provide their                   
 employees.  He asked if the DCRA is duplicating something or if               
 they are subsidizing the unions.  MR. MICKELSON said the organized            
 trades tend to have very well structured and organized training               
 modules and components.  If they want to be included, they have to            
 make a case for need.  Mr. Mickelson said from his own personal               
 experience, the painters were never going to go into places like              
 Kotzebue, etc., to recruit and provide training for people.  They             
 didn't have it within their budget.  That type of threshold of need           
 is required before the department would select them for training.             
 He said he believes Anchorage and Fairbanks has similar criteria in           
 that they are not going to provide unlimited subsidizes to                    
 organizations that are already covered.                                       
 REPRESENTATIVE ROKEBERG asked if these people are getting jobs and            
 where are they going.  MR. MICKELSON said he believes that in the             
 overall report there are some result summaries that do indicate               
 that the program is working.  Of course on an individual bases,               
 there may be times when an individual does not become employed.  He           
 said the DCRA's expectation is that they'll return to work.  The              
 expectation of the program is that there will be a reduced demand             
 on the unemployment insurance trust fund.  He said he believes that           
 after six years of operation, the evidence suggests that the                  
 program is working.                                                           
 Number 615                                                                    
 REPRESENTATIVE ROKEBERG asked how most of the training is                     
 conducted.  He questioned whether it is conducted through                     
 vocational education schools or with employers.  MR. MICKELSON said           
 the training is provided under all those methodologies.  Programs             
 such as "On the Job Training" have been offered directly with                 
 private employers.  There have been programs offered through                  
 existing educational agencies such as the Alaska Vocational                   
 Technical Center in Seward, branches of the university, unions,               
 companies themselves, etc.  There is multitude of delivery                    
 methodologies and options.                                                    
 CHAIRMAN KOTT noted the committee has been given an updated fiscal            
 Number 840                                                                    
 REPRESENTATIVE ELTON made a motion to pass HB 435 out of the House            
 Labor and Commerce Committee with attached fiscal notes and                   
 individual recommendations.                                                   
 REPRESENTATIVE PORTER said another way of describing HB 435 is a              
 mini dedicated state income tax.  Since it does seem to be doing              
 some good, he stated he wouldn't object to moving the bill.                   
 REPRESENTATIVE ROKEBERG asked if he is correct in assuming that the           
 fiscal note is a wash and it wouldn't affect the general fund                 
 budget.  MR. PERKINS said Representative Rokeberg is correct as               
 there are no additional general funds or federal funds in the                 
 CHAIRMAN KOTT said there is a motion before the committee to move             
 HB 435.  Hearing no objection HB 435 was moved out of the House               
 Labor and Commerce Committee.                                                 

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