Legislature(1997 - 1998)
05/06/1997 04:08 PM House HES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL
SERVICES STANDING COMMITTEE
May 6, 1997
4:08 p.m.
MEMBERS PRESENT
Representative Con Bunde, Chairman
Representative Joe Green, Vice Chairman
Representative Al Vezey
Representative Brian Porter
Representative Fred Dyson
Representative J. Allen Kemplen
Representative Tom Brice
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 187
"An Act relating to disclosure of public records identifying a
participant in the advance college tuition payment program;
relating to the composition and assets of the Alaska advance
college tuition payment fund; relating to administration of the
advance college tuition payment program; relating to advance
college tuition payment contracts; and providing for an effective
date."
- MOVED SB 187 OUT OF COMMITTEE
CS FOR SENATE BILL NO. 164(HES) am
"An Act relating to the authority of an emergency medical
technician at the scene of an accident or emergency."
- MOVED SCSSB 164(HES) am OUT OF COMMITTEE
SENATE BILL NO. 149
"An Act relating to reports and audits concerning health care
facilities; and providing for an effective date."
- MOVED SB 149 OUT OF COMMITTEE
CS FOR SENATE BILL NO. 189(FIN)
"An Act relating to eligibility for and default, collection, and
repayment of student loans; relating to non-renewal of certain
occupational licenses for default on a student loan; and providing
for an effective date."
- MOVED SCSSB 189(FIN) OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 164
"An Act providing that employment as a legislator or with the
National Education Association is not credited service under the
teachers' retirement system; prohibiting membership in the
teachers' retirement system for holders of limited certificates;
removing teachers holding limited certificates to teach Alaska
Native language or culture from membership in the teachers'
retirement system; and repealing a provision permitting members of
the teachers' retirement system to count unused sick leave credit
as credited service."
- HEARD AND HELD
*HOUSE BILL NO. 169
"An Act relating to welfare to work tax credits under the Alaska
Net Income Tax Act; and providing for an effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: SB 187
SHORT TITLE: UNIVERSITY TUITION PAYMENT PROGRAM
SPONSOR(S): SENATOR(S) WILKEN
JRN-DATE JRN-DATE ACTION
04/25/97 1483 (S) READ THE FIRST TIME - REFERRAL(S)
04/25/97 1484 (S) HES
04/28/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205
04/28/97 1509 (S) HES RPT 5DP
04/28/97 1509 (S) DP: WILKEN, LEMAN, WARD, ELLIS, GREEN
04/28/97 1510 (S) ZERO FISCAL NOTE (UA)
04/29/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203
04/29/97 1543 (S) RULES TO CALENDAR 4/29/97
04/29/97 1549 (S) READ THE SECOND TIME
04/29/97 1549 (S) ADVANCED TO THIRD READING UNAN CONSENT
04/29/97 1549 (S) READ THE THIRD TIME SB 187
04/29/97 1550 (S) PASSED Y17 N- E3
04/29/97 1550 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
04/29/97 1557 (S) TRANSMITTED TO (H)
04/30/97 (H) MINUTE(HES)
04/30/97 (H) MINUTE(HES)
04/30/97 1394 (H) READ THE FIRST TIME - REFERRAL(S)
04/30/97 1394 (H) HES
05/01/97 1455 (H) HES REFERRAL WAIVED/WITHDRAWN
05/02/97 (H) HES AT 3:30 PM CAPITOL 106
05/02/97 (H) MINUTE(HES)
05/06/97 (H) HES AT 4:00 PM CAPITOL 106
BILL: SB 164
SHORT TITLE: AUTHORITY OF EMERGENCY MED TECHS
SPONSOR(S): SENATOR(S)
WILKEN,Lincoln,Mackie,Leman,Pearce,Green,Sharp,Taylor
Kelly,Miller
JRN-DATE JRN-DATE ACTION
04/09/97 1054 (S) READ THE FIRST TIME - REFERRAL(S)
04/09/97 1054 (S) HES
04/16/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205
04/16/97 (S) MINUTE(HES)
04/18/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205
04/18/97 (S) MINUTE(HES)
04/18/97 1274 (S) HES RPT CS 4DP SAME TITLE
04/18/97 1275 (S) DP: WILKEN, WARD, LEMAN, ELLIS
04/18/97 1275 (S) ZERO FISCAL NOTE TO SB & CS (DHSS)
04/22/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203
04/22/97 1385 (S) RULES TO CALENDAR 4/22/97
04/22/97 1423 (S) READ THE SECOND TIME
04/22/97 1423 (S) HES CS ADOPTED UNAN CONSENT
04/22/97 1423 (S) PLACED AT BOTTOM OF CALENDAR
04/22/97 1432 (S) HELD IN SECOND READING TO 4/23/97 CAL
04/23/97 1449 (S) AM NO 1 ADOPTED UNAN CONSENT
04/23/97 1449 (S) ADVANCED TO THIRD READING UNAN CONSENT
04/23/97 1450 (S) READ THE THIRD TIME CSSB 164(HES) AM
04/23/97 1450 (S) COSPONSOR(S): LINCOLN, MACKIE, LEMAN,
04/23/97 1450 (S) PEARCE, GREEN, SHARP, TAYLOR,
04/23/97 1450 (S) KELLY, MILLER
04/23/97 1450 (S) PASSED Y20 N-
04/23/97 1454 (S) TRANSMITTED TO (H)
04/24/97 1317 (H) READ THE FIRST TIME - REFERRAL(S)
04/24/97 1317 (H) HES
05/02/97 (H) HES AT 3:30 PM CAPITOL 106
05/02/97 (H) MINUTE(HES)
05/06/97 (H) HES AT 4:00 PM CAPITOL 106
BILL: SB 149
SHORT TITLE: HEALTH CARE FACILITY AUDITS & REPORTS
SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES BY REQUEST
JRN-DATE JRN-DATE ACTION
04/25/57 (S) RLS AT 10:45 AM FAHRENKAMP RM 203
03/24/97 833 (S) READ THE FIRST TIME - REFERRAL(S)
03/24/97 833 (S) HES, FIN
04/04/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205
04/04/97 (S) MINUTE(HES)
04/04/97 984 (S) HES RPT 1DP 4NR
04/04/97 984 (S) DP: WILKEN
04/04/97 984 (S) NR: WARD, LEMAN, ELLIS, GREEN
04/04/97 984 (S) ZERO FISCAL NOTE (DHSS)
04/22/97 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/22/97 1383 (S) FIN RPT 6DP
04/22/97 1383 (S) DP: PEARCE, SHARP, PHILLIPS, ADAMS
04/22/97 1383 (S) DP: TORGERSON, DONLEY
04/22/97 1384 (S) PREVIOUS ZERO FN (DHSS)
04/25/97 (S) RLS AT 10:45 AM FAHRENKAMP RM 203
04/25/97 1478 (S) RULES TO CALENDAR 4/25/97
04/25/97 1486 (S) READ THE SECOND TIME
04/25/97 1486 (S) ADVANCED TO THIRD READING UNAN CONSENT
04/25/97 1486 (S) READ THE THIRD TIME SB 149
04/25/97 1487 (S) PASSED Y19 N1
04/25/97 1487 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
04/25/97 1495 (S) TRANSMITTED TO (H)
04/28/97 1357 (H) READ THE FIRST TIME - REFERRAL(S)
04/28/97 1357 (H) HES, FINANCE
05/02/97 (H) HES AT 3:30 PM CAPITOL 106
05/02/97 (H) MINUTE(HES)
05/06/97 (H) HES AT 4:00 PM CAPITOL 106
BILL: SB 189
SHORT TITLE: EDUC.LOAN REPAYMNT\ELIG.; OCC. LIC.
SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES BY REQUEST
JRN-DATE JRN-DATE ACTION
04/25/97 1484 (S) READ THE FIRST TIME - REFERRAL(S)
04/25/97 1484 (S) HES, FIN
04/30/97 (S) HES AT 9:00 AM BUTROVICH ROOM 205
04/30/97 1568 (S) HES RPT 4DP
04/30/97 1568 (S) DP: WILKEN, LEMAN, ELLIS, GREEN
04/30/97 1568 (S) FISCAL NOTES (DOE-2, LABOR-2)
04/30/97 1568 (S) ZERO FISCAL NOTES (DCED, ADM, LABOR)
05/01/97 (S) FIN AT 9:00 AM SENATE FINANCE 532
05/01/97 (S) MINUTE(FIN)
05/02/97 (S) RLS AT 3:15 PM FAHRENKAMP RM 203
05/02/97 1644 (S) FIN RPT CS 4DP 2NR SAME TITLE
05/02/97 1644 (S) DP: SHARP, PEARCE, PHILLIPS, TORGERSON
05/02/97 1644 (S) NR: PARNELL, DONLEY
05/02/97 1644 (S) PREVIOUS FNS APPLY (DOE-2, LABOR-2)
05/02/97 1644 (S) PREVIOUS ZERO FNS APPLY (DCED, ADM,
LAB)
05/05/97 1678 (S) RULES TO CALENDAR 5/5/97
05/05/97 1687 (S) READ THE SECOND TIME
05/05/97 1687 (S) FIN CS ADOPTED UNAN CONSENT
05/05/97 1688 (S) ADVANCED TO THIRD READING UNAN CONSENT
05/05/97 1688 (S) READ THE THIRD TIME CSSB 189(FIN)
05/05/97 1688 (S) PASSED Y19 N- E1
05/05/97 1688 (S) EFFECTIVE DATE(S) SAME AS PASSAGE
05/05/97 1700 (S) TRANSMITTED TO (H)
05/06/97 (H) HES AT 4:00 PM CAPITOL 106
BILL: HB 164
SHORT TITLE: TEACHERS RETIREMENT: ELIGIB. & SICK LEAVE
SPONSOR(S): REPRESENTATIVE(S) VEZEY
JRN-DATE JRN-DATE ACTION
02/27/97 510 (H) READ THE FIRST TIME - REFERRAL(S)
02/27/97 510 (H) CRA, HES, STATE AFFAIRS
03/10/97 607 (H) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
03/10/97 607 (H) CRA, HES, STATE AFFAIRS
03/12/97 (H) CRA AT 8:00 AM CAPITOL 124
03/12/97 (H) MINUTE(CRA)
03/19/97 (H) CRA AT 8:00 AM CAPITOL 124
03/19/97 (H) MINUTE(CRA)
04/02/97 (H) CRA AT 8:00 AM CAPITOL 124
04/02/97 (H) MINUTE(CRA)
04/07/97 (H) CRA AT 8:00 AM CAPITOL 124
04/07/97 (H) MINUTE(CRA)
04/09/97 (H) MINUTE(CRA)
04/11/97 (H) CRA AT 8:00 AM CAPITOL 124
04/11/97 (H) MINUTE(CRA)
04/11/97 1077 (H) CRA RPT CS(CRA) NT 2DP 5NR
04/11/97 1077 (H) DP: SANDERS, KOOKESH
04/11/97 1077 (H) NR: OGAN, IVAN, DYSON, RYAN, JOULE
04/11/97 1078 (H) ZERO FISCAL NOTE (ADM)
04/11/97 1078 (H) REFERRED TO HES
05/02/97 (H) HES AT 3:30 PM CAPITOL 106
05/02/97 (H) MINUTE(HES)
05/06/97 (H) HES AT 4:00 PM CAPITOL 106
BILL: HB 169
SHORT TITLE: WELFARE TO WORK TAX CREDITS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-DATE ACTION
03/05/97 543 (H) READ THE FIRST TIME - REFERRAL(S)
03/05/97 543 (H) HES, STATE AFFAIRS, FINANCE
03/05/97 543 (H) INDETERMINATE FISCAL NOTE (DHSS)
03/05/97 543 (H) FISCAL NOTE (REV)
03/05/97 543 (H) ZERO FISCAL NOTE (LABOR)
03/05/97 543 (H) GOVERNOR'S TRANSMITTAL LETTER
05/02/97 (H) HES AT 3:30 PM CAPITOL 106
05/02/97 (H) MINUTE(HES)
05/06/97 (H) HES AT 4:00 PM CAPITOL 106
WITNESS REGISTER
ELIZABETH HAGEVIG, Legislative Assistant
to Senator Wilken
Alaska State Legislature
Capitol Building, Room 510
Juneau, Alaska 99801
Telephone: (907) 465-3709
POSITION STATEMENT: Provided sponsor statement for
SCSSB 164(HES) am
TOM DEAN, Chief
Emergency Medical Services of Tok
P.O. Box 811
Tok, Alaska 99780
Telephone: (907) 883-5873
POSITION STATEMENT: Testified in support of SCSSB 164(HES) am
MARK JOHNSON, Chief
Community Health and Emergency Medical Services
Division of Public Health
Department of Health and Social Services
P.O. Box 110616
Juneau, Alaska 99811-0616
Telephone: (907) 465-3027
POSITION STATEMENT: Testified in support of SCSSB 164(HES) am
GARREY PESKA, Lobbyist
Alaska State Hospital/Nursing Homes (ASHNHA)
319 Seward Street
Juneau, Alaska 99801
Telephone: (907) 586-1790
POSITION STATEMENT: Testified in support of SB 149
JAY LIVEY, Deputy Commissioner
Office of the Commissioner
Department of Health and Social Services
P.O. Box 110601
Juneau, Alaska 99811-0601
Telephone: (907) 465-3030
POSITION STATEMENT: Testified in support of SB 149
MARTIN SCHULTZ, Assistant Attorney General
Government Affairs Section
Civil Division
Department of Law
1031 West Fourth Avenue, Suite 200
Anchorage, Alaska 99501-1994
Telephone: (907) 269-5100
POSITION STATEMENT: Testified on SB 149
GLENN GUSTAFSON. Assistant Attorney General
Government Affairs Section
Civil Division
Department of Law
1031 West Fourth Avenue, Suite 200
Anchorage, Alaska 99501
Telephone: (907) 269-5150
POSITION STATEMENT: Testified on SB 149
SHEILA PETERSON, Legislative Assistant
to Senator Wilken
Alaska State Legislature
Capitol Building, Room 510
Juneau, Alaska 99801
Telephone: (907) 465-3762
POSITION STATEMENT: Provided sponsor statement on SCSSB 189(FIN)
DIANE BARRANS, Executive Director
Postsecondary Education Commission
Department of Education
3030 Vintage Boulevard
Juneau, Alaska 99801-7109
Telephone: (907) 465-6740
POSITION STATEMENT: Testified in support of SCSSB 189(FIN)
TERESA WILLIAMS, Assistant Attorney General
Fair Business Practices Section
Civil Division
Department of Law
1031 West Fourth Avenue, Suite 200
Anchorage, Alaska 99501
Telephone: (907) 269-5150
POSITION STATEMENT: Testified on SCSSB 189(FIN)
SENATOR GARY WILKEN
Alaska State Legislature
Capitol Building, Room 510
Juneau, Alaska 99801
Telephone: (907) 465-3762
POSITION STATEMENT: Sponsor of SCSSB 189(FIN)
BILL CHURCH, Retirement and Benefits Manager
Division of Retirement and Benefits
Department of Administration
P.O. Box 110203
Juneau, Alaska 99811-0203
Telephone: (907) 465-4460
POSITION STATEMENT: Testified on HB 164
JOHN CYR, President
National Education Association-Alaska (NEA-Alaska)
114 Second Street
Juneau, Alaska 99801
Telephone: (907) 586-3090
POSITION STATEMENT: Testified against HB 164
JIM NORDLUND, Director
Division of Public Assistance
Department of Health and Social Services
P.O. Box 110640
Juneau, Alaska 99811-0640
Telephone: (907) 465-3347
POSITION STATEMENT: Testified on HB 169
JOSEPH FRIEDMAN, Director
Trade Dollar Exchange
3820 Lake Otis
Anchorage, Alaska 99508
Telephone: (907) 562-8300
POSITION STATEMENT: Testified in support of HB 169
ANGELA SALERNO, Executive Director
National Association of Social Workers of Alaska (NASW)
525 Main Street
Juneau, Alaska 99801
Telephone: (907) 586-4438
POSITION STATEMENT: Testified in support of HB 169
BOB BARTHOLOMEW, Deputy Director
Income and Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, Alaska 99501-0420
Telephone: (907) 465-2320
POSITION STATEMENT: Testified on HB 169
PAM LaBOLLE, President
Alaska Chamber of Commerce
217 Second Street
Juneau, Alaska 99801
Telephone: (907) 586-2323
POSITION STATEMENT: Testified in support of HB 169
ACTION NARRATIVE
TAPE 97-42, SIDE A
Number 0000
CHAIRMAN CON BUNDE called the House Health, Education and Social
Services Standing Committee meeting to order at 4:08 p.m. Members
present at the call to order were Representatives Bunde, Vezey,
Dyson and Kemplen. Representative Porter arrived at 4:14 p.m.
Representatives Green and Brice arrived at 4:17 p.m. This meeting
was teleconferenced to Anchorage, Mat-Su and Tok.
SB 187 - UNIVERSITY TUITION PAYMENT PROGRAM
Number 0032
CHAIRMAN BUNDE announced the first item on the agenda was SB 187,
"An Act relating to disclosure of public records identifying a
participant in the advance college tuition payment program;
relating to the composition and assets of the Alaska advance
college tuition payment fund; relating to administration of the
advance college tuition payment program; relating to advance
college tuition payment contracts; and providing for an effective
date." He stated that the committee had heard the House companion
bill.
Number 0065
REPRESENTATIVE AL VEZEY made a motion to move SB 187 with
individual recommendations and attached fiscal note. Hearing no
objection SB 187 was moved out of the House Health, Education and
Social Services Standing Committee.
SCSSB 164(HES) am - AUTHORITY OF EMERGENCY MED TECHS
Number 0087
CHAIRMAN GREEN announced the next item on the agenda was SCSSB
164(HES) am "An Act relating to the authority of an emergency
medical technician at the scene of an accident or emergency."
Number 0124
ELIZABETH HAGEVIG, Legislative Assistant to Senator Wilken, read
the sponsor statement. She said SCSSB 164(HES) am repairs a long
overdue shortcoming in our public safety network. Specifically, it
provides Emergency Medical Technicians (EMT's), who belong to an
ambulance service or a first responder service, with appropriate
and relevant authority at the scene of an accident or other medical
crisis, without creating potential conflict between emergency
personnel. This bill is intended to protect EMT's who arrive first
on the scene of an accident or medical emergency, or who are the
only emergency responders to arrive for some time, as is the case
in many rural areas.
MS. HAGEVIG explained that currently, we ask EMT's to perform
duties necessary to their job without giving them the proper legal
authority to do so. Such duties include: controlling and directing
activities at the scene of an accident; temporarily blocking or
redirecting traffic to avoid the scene of an accident; trespassing
upon property in order to respond to an emergency call; entering a
building, including a private residence, or premises where report
of an injury or illness has taken place; and directing the removal
or destruction of a motor vehicle or other things in order to
prevent further harm to injured or ill individuals.
MS. HAGEVIG added that this legislation also works in concert with
existing statutes, specifically AS 18.08.086, to add the scene
control duties mentioned in SB 164 under the immunity from
liability statute. Because the duties mentioned above are part of
the overall pursuit of providing "emergency medical services," they
would automatically apply for immunity from liability under AS
18.08.086 which frees EMT's from liability while "(administering)
emergency medical services." Alaska relies heavily on its
emergency medical personnel, especially in rural areas where law
enforcement and fire personnel are relatively few in numbers. Just
as we expect EMT's to protect our safety in an emergency situation,
we should reciprocate this service, and give EMT's the proper legal
authority to do their jobs without compromising their personal
safety.
Number 0313
TOM DEAN, Chief, Emergency Medical Services , testified next via
teleconference from Tok. He said two years ago he found out that
EMT's did not have the legal protection to do what they do. This
bill will not make any changes in what they do, but will give EMT's
legal authority and protection.
Number 0380
MARK JOHNSON, Chief, Community Health and Emergency Medical
Services, Division of Public Health, Department of Health and
Social Services, said SCSSB 164(HES) am gives EMT's the same
authority that fire officers currently have in state statute.
Number 0419
REPRESENTATIVE FRED DYSON referred to line 8, page 2, and asked
when it was necessary for EMT's to destroy a motor vehicle.
Number 0380
MR. JOHNSON answered that it was sometimes necessary to remove a
person from a vehicle.
Number 0462
REPRESENTATIVE DYSON asked if this language was definitive.
Number 0477
CHAIRMAN BUNDE asked what other language could be used to cover all
situations.
Number 0545
REPRESENTATIVE DYSON felt that the word, "damage," could be used.
Number 0561
MR. DEAN commented that, in situations where they need to get a
victim out of a vehicle, the vehicle is pretty well destroyed
anyway. In instances where a person is caught in machinery, the
machinery needs to be damaged in order to treat that person.
Number 0615
MS. HAGEVIG explained that this question did not come up before,
but the language included in the bill was directly taken from the
statute providing authority to fire fighters.
REPRESENTATIVE BRIAN PORTER made a motion to move SCSSB 164(HES)
am, version \B.a from committee with individual recommendations and
zero fiscal note. Hearing no objection SCSSB 164(HES) am was
moved from the House Health, Education and Social Services Standing
Committee.
SB 149 - HEALTH CARE FACILITY AUDITS & REPORTS
Number 0749
CHAIRMAN BUNDE announced the next item on the agenda was SB 149,
"An Act relating to reports and audits concerning health care
facilities; and providing for an effective date."
Number 0771
GARREY PESKA, Lobbyist, Alaska State Hospital/Nursing Homes
(ASHNHA), said that several proposed decisions by hearing officers
have called into question whether or not Medicaid audits may be
used to set hospital rates for Medicaid reimbursement. Federal law
requires that the state perform audits of hospitals for Medicaid
purposes. They believe SB 149 is necessary to allow this process
to work properly and they support the bill.
Number 0811
JAY LIVEY, Deputy Commissioner, Office of the Commissioner,
Department of Health and Social Services, stated that the
Administration has worked with ASHNHA on this bill and also support
SB 149.
Number 0833
MARTIN SCHULTZ, Assistant Attorney General, Government Affairs
Section, Civil Division, Department of Law, testified next via
teleconference from Anchorage. He represents the Department of
Health and Social Services (DHSS) in some of the litigation
referred to by Mr. Peska.
Number 0824
CHAIRMAN BUNDE asked him if he saw any problems with SB 149 and its
aims.
MR. SCHULTZ answered that SB 149 was a good bill. Medicaid is a
federal/state matching fund program which means that the state
needs to conform to federal law. Federal law requires Medicaid
audits. Audits produce accurate and useful information based on
the historical costs of the facility. Medicaid rates are based on
these historic rates.
Number 0900
GLENN GUSTAFSON, Assistant Attorney General, Government Affairs
Section, Civil Division, Department of Law, testified next via
teleconference from Anchorage. He represents Medicaid agency staff
in the administrative proceedings where subject rulings are issued
by the hearing examiner.
Number 0935
REPRESENTATIVE DYSON made a motion to move SB 149 out of committee
with individual recommendations and zero fiscal note. Hearing no
objection SB 149 was moved from the House Health, Education and
Social Services Standing Committee.
SCSSB 189(FIN) - EDUC.LOAN REPAYMNT\ELIG.; OCC. LIC.
Number 0960
CHAIRMAN BUNDE announced the next item on the agenda was SCSSB
189(FIN), "An Act relating to eligibility for and default,
collection, and repayment of student loans; relating to non-renewal
of certain occupational licenses for default on a student loan; and
providing for an effective date."
Number 0965
SHEILA PETERSON, Legislative Assistant to Senator Wilken, explained
that Senator Wilken was a member of the Senate Finance Subcommittee
on Education. As a member he reviewed the Alaska Commission on
Postsecondary Education which services a large number of loans,
approximately $60 million to $70 million this year. The amount of
loans in default is about 18 percent. The bill will make the
Alaska Commission of Postsecondary Education more stable and
businesslike. It provides the necessary financial tools to
effectively and efficiently reduce the number of loans that are in
default. Currently the average age of the loan applicant is 27-
years-old, these people are in the work place and should be
responsible for paying back their loans.
MS. PETERSON said that Smith-Barney reviewed the commission and
made several recommendations; some of which are embodied in SCSSB
189(FIN). Senator Wilken wanted the committee to realize that when
Smith-Barney reviewed the commission's work they indicated that a
majority of the commission's time is spent on servicing loans that
are in default. It is hoped that with passage of SCSSB 189(FIN),
these loans will be under control and the loan program can be
available to the next generation of Alaskans.
Number 1094
REPRESENTATIVE J. ALLEN KEMPLEN asked how the program of non-
renewal for occupational licenses worked.
Number 1104
MS. PETERSON answered that the program was patterned after the
child support enforcement program.
Number 1151
DIANE BARRANS, Executive Director, Postsecondary Education
Commission, Department of Education, said the commission is
supportive of this legislation. Commission staff were asked to
identify some effective tools in other student loan programs for
collection of defaulted loans. These tools are referenced in the
bill before the committee. She explained that occupational
licenses are renewed on about a three year cycle. The licenses, on
which the commission currently intervenes, are administered by the
Division of Occupational Licensing. The commission sends a notice,
at least four to six months in advance of a licensee's renewal
date, to let them know that there is a problem with their student
loan which could interfere with the reissuance of their license.
The commission then works with the borrowers to try to come into
compliance with some payment arrangement if they are not in the
position of fully paying the amount in arrears. This program has
proven itself effective. This bill would expand this program to
include teachers who are licensed by the Department of Education
and some occupational licenses that are handled by the Department
of Labor. Anyone licensed to practice an occupation by the state
of Alaska would have to repay their Alaska student loan debt.
Number 1260
REPRESENTATIVE KEMPLEN asked if the commission received many
complaints about this process.
Number 1264
MS. BARRANS answered that the commission did not receive many
complaints, but the few complaints they received were loud. Those
who decided to fight this process, rather than comply with it, felt
very strongly that their student loan debt and their default status
should not be something which should keep them from being licensed
by the state. This program encourages borrowers to stay in good
standing with their loan.
Number 1297
REPRESENTATIVE KEMPLEN asked how many people were affected by this
process.
Number 1302
MS. BARRANS believed that, within the last year and a half that
this process was used, it involved fewer than 150 individuals. Of
those individuals, all but 19 have managed to come to some
repayment agreement. She stated that she would send exact figures
to the committee as she was relying on memory.
Number 1335
CHAIRMAN BUNDE cited an example from when he served on the
commission. One appeal involved a gentlemen who had suffered a
head injury, had completed at least two undergraduate degrees and
perhaps one or two postgraduate degrees. This person claimed an
exemption from having to repay his loan because of the head injury.
He expressed concern that the loan program will be gone in six to
eight years if the default rate is not stopped. The commission
does not take in as much money as is paid out.
Number 1383
TERESA WILLIAMS, Assistant Attorney General, Fair Business
Practices Section, Civil Division, Department of Law, testified
next via teleconference from Anchorage. She said this bill is
legally defensible, it is an excellent bill.
Number 1395
CHAIRMAN BUNDE asked Ms. Barrans to give a brief comparison between
the requirements to apply for and receive a student loan now and
how the process would change under SCSSB 189(FIN).
Number 1421
MS. BARRANS explained that the process won't noticeably change in
the paperwork completed by the loan applicant. Applicants fill out
forms, they are sent to the commission and the applicants are
notified about whether or not they have received an award. The
bill would add a credit assessment to that process. The commission
feels this process would be relatively inexpensive and could be
done electronically. If the commission finds that the borrower has
an egregious bad credit history, the commission would offer them
the opportunity to have a credit worthy co-signer on their note.
MS. BARRANS added that the commission aggressively pursues
defaulted borrowers, but these are unsecured loans with nothing
tangible for the commission to repossess. The commission relies on
tools such as the Permanent Fund Dividend garnishment which has
proven to be very effective. In addition, the commission sends out
written correspondence and makes phone calls. This bill would
allow the commission to expand their use of the professional and
occupational licensing tool and to do an administrative wage
garnishment. Currently the commission can go through the full
legal court process of getting a judgement against someone in order
to get a garnishment of wages. As this is expensive and time
consuming, collection agencies will often look at the size of the
debt and make a judgmental decision of whether or not it is worth
the cost. The commission would be able to do it across the board,
through the administrative wage garnishment process.
Number 1520
CHAIRMAN BUNDE asked about the future notification regarding the
changes in the promissory note.
Number 1528
MS. BARRANS answered that the commission wants to provide due
notice up front whenever possible and use this as a disincentive
for borrowers to fall into delinquency status. She pointed out
that there is a provision in SCSSB 189(FIN) which would allow a
half percent interest increase. This increase would not go into
effect until the 1998-1999 school year as the commission is well
into the application process for the 1997-1998 school year. The
current interest rate is 8.6 percent.
Number 1557
CHAIRMAN BUNDE asked if the 8.6 percent was contingent on the prime
plus rate.
Number 1564
MS. BARRANS answered that it is the average interest rate which the
commission is paying on all of the bonds that are outstanding.
Whatever the corporation is paying, the commission charges the
average of that plus a 2.5 percent administrative add-on.
Number 1574
CHAIRMAN BUNDE clarified that this amount did not pay for all of
the administrative costs.
Number 1580
REPRESENTATIVE KEMPLEN presented a scenario where someone is
working in an occupation that requires a license. This person runs
into a difficult time in life and they end up in arrears for six
months or more. He asked how the commission would accommodate that
type of situation.
Number 1631
MS. BARRANS explained that there are a number of provisions to deal
with those real life situations. The key is having the borrower
contact the commission before they are in arrears. If someone is
struggling to make payments, the commission would contact them
through the due diligence process. There are unemployment
deferments, medical deferments and other mechanisms in place to
provide protection to someone in that situation. If that person
fails to communicate with the commission, they could find
themselves in a position of having lost a number of those
protections found within their promissory note. If someone filed
for bankruptcy, the commission ceases all repayment or collection
on those accounts.
Number 1685
CHAIRMAN BUNDE asked for a chronology of what the commission does
when a payment is overdue.
Number 1690
MS. BARRANS answered that the commission has an automated roster
system with staff who focus on communicating with delinquent or
defaulted borrowers. These staff focus on making phone calls and
getting written correspondence out. The monthly billing statement
continues to go out indicative of the growing seriousness of their
arrearage. Additionally, due diligence letters are sent when the
borrower is two months past due. These type of letters continue
every 30 days at the same time. Telephone contact is made to the
borrower. In a given month the commission will make about 6,000
phone calls to those borrowers who are delinquent and heading
towards default. There is a serious attempt to avert the crisis
point on the loan.
CHAIRMAN BUNDE announced the presence of Senator Wilken.
Number 1743
REPRESENTATIVE PORTER commented that, in his experience with law
enforcement, 10 percent of people could not be rehabilitated. He
noted that this same number applied to people who defaulted on
their loans. He mentioned that his children all used this program
and that he hoped the program was around so that his grandchildren
could use it as well.
Number 1798
REPRESENTATIVE DYSON made a motion to move SCSSB 189(FIN) out of
committee with individual recommendations and attached fiscal
notes. Hearing no objections SCSSB 189(FIN) was moved from the
House Health, Education and Social Services Standing Committee.
HB 164 - TEACHERS RETIREMENT: ELIGIB. & SICK LEAVE
Number 1824
CHAIRMAN BUNDE announced the next item on the agenda was HB 164,
"An Act providing that employment as a legislator or with the
National Education Association is not credited service under the
teachers' retirement system; prohibiting membership in the
teachers' retirement system for holders of limited certificates;
removing teachers holding limited certificates to teach Alaska
Native language or culture from membership in the teachers'
retirement system; and repealing a provision permitting members of
the teachers' retirement system to count unused sick leave credit
as credited service."
REPRESENTATIVE AL VEZEY, Sponsor of HB 164, said the bill is a
result of the review of the annual report of the teacher retirement
system (TRS). A statute provides that a person who is a member of
TRS may elect to continue participating in TRS if they become an
elected legislator. He felt this was a legislative privilege. The
TRS is substantially different from the Public Employee Retirement
System (PERS) as it costs more money and accrues more benefits at
a faster rate. He felt this inequity should be removed from the
statute.
REPRESENTATIVE VEZEY said HB 164 also removes the ability of
National Education Association-Alaska (NEA-Alaska) members to
participate in TRS. He understood that NEA-Alaska did not object
to this language. He added that there is also a statutory mandate
which local school districts grant to teachers of the option, at no
cost to the teacher, of taking their unused sick leave and having
the employee's and the employer's contribution rates to accumulate
additional retirement benefits. He did not feel it was in the best
interest of the local school district to continue this mandate. He
felt the school districts were perfectly capable of bargaining
these units with the teachers. Taking this provision out of
statute would return more control to the local school districts.
Number 1938
CHAIRMAN BUNDE declared his conflict as he was a teacher and now he
is a legislator. He asked Mr. Church how former teachers would be
impacted by HB 164.
BILL CHURCH, Retirement and Benefits Manager, Division of
Retirement and Benefits, Department of Administration, explained
that anyone hired into TRS before passage of HB 164 would still be
covered in the same way. It would only affect those individuals
who are enrolled in TRS after the passage of HB 164. Those
individuals would begin to accrue credit under PERS and would not
being accruing credit under TRS.
CHAIRMAN BUNDE asked if someone who was currently a teacher and
then is elected to the legislature would go into PERS as compared
to the current system where a teacher, elected to the legislature,
continues in the TRS system.
Number 1973
MR. CHURCH answered that the person could elect to continue in TRS.
Number 2012
REPRESENTATIVE VEZEY stated that if you are participating under
TRS, then a 2 percent or a 2.25 percent retirement amount is being
accrued based on the salary of a teacher as compared to the
legislative salary. A legislator who is accruing money in the TRS
system is accruing 2.5 times as much as other legislators.
Number 2030
MR. CHURCH explained that under PERS an individual will accrue
benefits at 2 percent for the first ten years, 2.25 percent for the
second ten years and 2.5 percent for each year over 20 years. In
TRS, it is 2 percent for the first 20 years and then 2.5 percent
for each year of accrual after the 20 years. The benefit will be
based on the average of the high three salaries in TRS. Presently
a new employee would have their benefit based on the average of the
high five consecutive years. The PERS has increased multipliers so
at the end of the 20 years you have little bit higher percentage
base.
Number 2069
REPRESENTATIVE PORTER asked about obtaining credit at service time
for cashing in unused sick leave. He asked if this was sick leave
that did not have a cash value in the first place.
Number 2079
MR. CHURCH was not sure whether or not there was a cash value
within each district. This is unused sick leave which is not
cashed out, it is on the books at the time that the member retires.
This sick leave may be claimed by the teacher.
Number 2096
REPRESENTATIVE PORTER asked if there were other bargaining units
which had that provision.
Number 2098
MR. CHURCH answered that he was not aware of any others.
Number 2101
CHAIRMAN BUNDE asked if the terminology had changed, if it had gone
from sick leave to personal leave or if it depended on the school
district.
Number 2107
MR. CHURCH explained that there is a difference between sick leave,
annual leave and the personal leave concept. Personal leave rolls
in both annual and sick leave. There is a higher accrual rate and
the leave can be used for any purpose. All of this leave can be
cashed-out on separation of state service. He stated that there is
a cash value for personal leave. The state system allows a person
to cash-out their annual leave upon termination, but the sick leave
is lost.
Number 2132
REPRESENTATIVE KEMPLEN asked how long it would take a person to be
vested in the PERS system.
Number 2162
MR. CHURCH answered that it took five years to be vested in the
PERS system for retirement benefits.
Number 2192
REPRESENTATIVE KEMPLEN clarified that a representative would have
to be elected for three terms in order to be vested. He felt there
was a disincentive to run for office if a person only wanted to
serve for two terms.
MR. CHURCH mentioned that elected officials could choose whether or
not they wanted to participate in PERS. A person could choose to
continue in TRS, working after session for a semester with their
district.
Number 2221
CHAIRMAN BUNDE commented that if this person worked for the
university there is a strong constitutional prohibition against
continuing their work while they are a legislator.
MR. CHURCH added that this was also applicable for a legislator
working for the state.
TAPE 97-42, SIDE B
Number 0000
REPRESENTATIVE KEMPLEN said it was a disincentive for teachers to
run for public office, unless they planned on being there long
enough to become vested in PERS.
Number 0014
MR. CHURCH explained that is certainly would depend on how many
years the teacher had already accrued in TRS. It takes eight years
to vest in TRS. If a person has 20 years of teaching in Alaska,
they are eligible for retirement benefits.
Number 0044
CHAIRMAN BUNDE asked whether or not the employer had to match
contributions for sick leaves used as retirement credit and, if
this was the case, why wasn't there be a positive fiscal note.
Number 0081
REPRESENTATIVE VEZEY explained that the statute calls for the
employer, who is not the state of Alaska, to pay. This would not
benefit the state financially. The statute calls for the employer
to pay both the employee's and the employer's contribution. A
person could debate that there would be a savings by the school
district because they would be free to negotiate how to use that
resource.
Number 0123
MR. CHURCH said the division had asked their actuary to look at
what would happen to the funding ratio if the unused sick leave
provision was eliminated. The actuary estimated that the future
contribution rate would be reduced by .36 over the next 25 years,
which would decrease employer contributions by approximately
$200,000 at the end of 25 years.
Number 0158
REPRESENTATIVE VEZEY asked if the contribution rate of .36 was the
past or current service rate.
Number 0164
MR. CHURCH answered that this would be under the normal cost. It
is part of the actuarial assumptions that go into establishing
normal cost (Indisc.-coughing).
Number 0177
CHAIRMAN BUNDE mentioned that the actuarial impact of HB 164 would
have no positive or negative impact on TRS.
MR. CHURCH answered that this would be correct. After 25 years
there would be a decrease of .36.
Number 0205
JOHN CYR, President, National Education Association-Alaska (NEA-
Alaska), stated that his organization is in opposition to HB 164.
Currently, there is one member of NEA-Alaska in TRS who is
grandfathered-in and will continue to participate whether or not
this bill passes. He explained that NEA-Alaska has been out of TRS
for a number of years.
MR. CYR felt it was wrong to set one class of public employees
apart from another class. He presented a scenario where someone
taught for 17 years and then ran for political office. If that
person won, they would lose as they would have to wait until they
reached age 55 to get retirement. A person employed by that
school, who was not a teacher, would be able to continue in PERS.
He felt this was a disincentive to public service.
Number 0343
MR. CYR referred back to the time when schools were state operated,
the legislature, through statute, found sick leave to be a benefit
provided for teachers and for their districts. This sick leave has
always been credited for retirement. Teachers do not collect
annual leave or any of the other types of leave that PERS employees
receive. A teacher can lose their job or their certificate if they
misuse sick leave. The amount of money that has been set aside for
teachers is an earned benefit, used towards retirement. This is a
proper use of the state's resource and it provides a benefit to the
districts, to children and to the membership. To put this benefit
into an area to be bargained, district by district, is unworkable.
He was not sure that the districts can bargain sections of the
state retirement system. The state might not want individual
districts bargaining for a provision that is owned by the state.
MR. CYR added that secondarily, his organization does not know how
it would work even if it could be done. Teachers have bargained
half a dozen contracts. Every time a contract was bargained, there
would be the potential of having a different group of people
working in the same system who would be covered under a different
way for sick leave. Alaska is a transient state. People move from
district to district.
Number 0506
MR. CYR felt HB 164 should not be passed. Teachers have a
retirement system which is financially sound with a good retirement
board.
Number 0524
REPRESENTATIVE DYSON questioned whether or not HB 164 would be a
disincentive for a teacher to run for the legislature. He asked
how it would be more of a disincentive than someone in another
profession. He did not know of any professions which would allow
someone to become a legislator and continue their retirement
benefits.
Number 0560
MR. CYR explained that there is a difference between a public and
a private sector employee. A private sector employee is free to
charge as much as they can for the services they provide. He
mentioned that many legislators choose to continue their own
business outside of the legislature, accruing the benefits of their
retirement package. Public service employees do not have that
luxury.
Number 0612
REPRESENTATIVE DYSON felt that teachers could choose to work in
whatever district had the best schools, the best living
environment, the best wages or the best benefits. People could go
other places to teach, just as private employees can go to other
places to work.
Number 0655
MR. CYR stated that he is familiar with the facts and figures about
the salaries of Alaskan teachers. Nevertheless, this bill takes
away the TRS incentive to become a legislator and remain in TRS.
An employee who is in PERS can choose to remain in PERS when they
become a legislator.
Number 0694
REPRESENTATIVE DYSON asked why that group should have a better deal
than 99 percent of employees in the state who are working in the
private sector.
Number 0703
MR. CYR felt that this bill punishes a class of public employees
for some very specific reasons and this was patently wrong.
General conclusions can be drawn between the public and the private
sector of where it should fit, how it should move, how the public
sector should be compensated and what the retirement benefits
should be across the board. He felt this was an apples and oranges
issue.
Number 0750
REPRESENTATIVE DYSON felt the state has been rewarding one group.
Number 0773
REPRESENTATIVE PORTER expressed surprise at the spectrum of
benefits which have been accrued by state employees. When he left
his former job he couldn't continue his retirement system. He did
not feel that all public employees had the ability to continue in
their retirement system. He clarified that a PERS employee could
continue their retirement system while they served as a legislator.
Number 0823
MR. CYR believed this statement to be true. Legislators have the
option to remain in PERS if they were a former state employee.
Number 0831
REPRESENTATIVE PORTER did not feel this was appropriate.
Number 0836
CHAIRMAN BUNDE clarified that legislators can choose to be under
PERS. He asked for information on the Anchorage School District.
Number 0880
MR. CYR explained that some school districts have bargained
personal leave, they will have four or five days of leave which can
be used for personal absences. He did not know of any district
which has wrapped those two kinds of leave together into sick
leave. Sick leave is provided by statute, 13 days per year. This
sick leave transfers from district to district.
Number 0930
CHAIRMAN BUNDE announced that this is the first time the committee
has heard HB 164 and it will be held in order to find out what
various districts do with their sick leave policies.
HB 169 - WELFARE TO WORK TAX CREDITS
Number 0963
CHAIRMAN BUNDE announced the next item on the agenda was HB 169,
"An Act relating to welfare to work tax credits under the Alaska
Net Income Tax Act; and providing for an effective date."
Number 0967
JIM NORDLUND, Director, Division of Public Assistance, Department
of Health and Social Services, stated that his division has a large
responsibility to do in finding work opportunities for 4,000
individuals in the upcoming year. The division sees HB 169 as one
of several tools which can be used to give employers the incentive
to hire welfare recipients. This piece of legislation has had
input from the Department of Revenue (DOR), Department of Law (DOL)
and the Department of Administration.
MR. NORDLUND explained that HB 169 targets welfare recipients and
disadvantaged workers which include disabled persons receiving
vocational rehabilitation, veterans receiving public assistance and
ex-felons who are in low income families. The bill would assist
recipients in finding work opportunities. The Anchorage Chamber of
Commerce, the Alaska Chamber of Commerce, large and small employers
have been approached about this type of legislation and those
groups were all supportive of a tax credit. They see HB 169 as a
measure which would provide some incentive for them to hire
recipients.
Number 1069
MR. NORDLUND commented that HB 169 piggybacks on the federal tax
credit bill. This will assist employers with the administrative
burden of applying for the credit. It is a relatively simple
procedure to extend the credit that they would be getting on their
federal income tax and apply it to their state income tax. He said
HB 169 will have some state treasury costs, but it will yield
greater benefits in terms of getting welfare recipients employed
and off public assistance.
Number 1118
JOSEPH FRIEDMAN, Director, Trade Dollar Exchange, testified next
via teleconference from Anchorage. He was in support of HB 169 as
it is an excellent opportunity to provide corporations with a tax
credit and an incentive to participate in welfare to work issues.
He said the Trade Dollar Exchange is a private industry initiative
to involve small businesses in welfare to work programs. The Trade
Dollar Exchange uses a system of bartering under the Tax Equity and
Fiscal Responsibility Act of 1982. This act essentially says that
if a business trades or barters, the income on their tax returns is
tax deductible when spent on business expenses. Coupled with the
federal work opportunities tax credit, this would provide a
tremendous opportunity for the exchange to encourage businesses to
be involved in hiring people going from welfare to work. He stated
that there is a large number of workers who do not have the skills
to compete at the current level of participation in the job market.
He proposed an amendment which would provide a disregard for the
Trade Dollar Exchange currency as it affects the earned income
status for people receiving a cash benefit through the department.
Number 1258
ANGELA SALERNO, Executive Director, National Association of Social
Workers of Alaska (NASW), said that she was formerly employed as a
job developer. She worked in the private sector for a company that
contracted for Job Training Partnership Act dollars (JTPA) and, as
a result, has some experience in the use of tax incentives as a way
to assist candidates seeking work. This will help people get off
welfare and into a work situation. The company used the Targeted
Job Tax Credit, the federal tax credit. As a job developer it was
advantageous for her to walk into an employer's office and state
that not only is the candidate well-trained, but here is a tangible
financial incentive. This incentive often shifted the balance for
the employers because the candidate did not always appear to be the
best candidate. She felt this would be the case for many of the
people who need to placed into work situation. These people may
have less experience, a checkered job history or something else.
This incentive might be the needed impetus for that employer to
hire this employee.
MS. SALERNO explained that the employee would need to be on the job
for a full six months before the employer received this incentive.
This type of incentive will work. It is one of the few things that
the state is doing to actually help welfare recipients find work.
Number 1361
REPRESENTATIVE VEZEY asked if the state was subsidizing the cost of
having an employee. He stated that this is not a substitute for
creating jobs. Employers are not going to manufacture jobs in
order to get 15 percent of what they spend.
Number 1396
MS. SALERNO agreed and said HB 169 doesn't address this issue at
all. This bill is going at the problem from a different angle. A
financial incentive is another way to shift the balance to someone
who may have a deficit in their ability find work.
Number 1433
BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division,
Department of Revenue, stated that the bigger spectrum was taken
into consideration when developing the welfare to work tax credit.
There are four or five bills in the legislature this year to try to
do what Representative Vezey suggested, creating new jobs. He
mentioned HB 63 and another small business tax credit as attempts
to create these new jobs. Other bills tried to look at the other
angle, HB 169 was meant to be one of many tools.
Number 1487
MR. BARTHOLOMEW stated that the potential loss would be $1 million
based on trying to put an estimated 880 people to work. The other
component of HB 169 is that the state adopts the federal work
incentive bill. This bill repeals the federal program in order to
adopt a state program. Under the current tax, if an employee is
hired in another state, employers can get tax credits off the
Alaska tax. Business apportion their credit to their state taxes.
This bill, HB 169, takes out that provision and no longer
recognizes the federal credit. If a business hired someone in
Alaska, they would get a federal tax credit as well as a state
credit.
Number 1557
CHAIRMAN BUNDE asked him to speculate on the net gain, what is the
cost to keep 880 people on welfare.
Number 1563
MR. BARTHOLOMEW answered that Mr. Nordlund's division looked at
this in their 1998 budget. Some of the budget adjustments
reflected trying to take people off the welfare rolls. The sense
from the DOR standpoint is that it would be a net financial gain to
the state.
Number 1581
REPRESENTATIVE VEZEY repeated that HB 169 does not provide any new
jobs. The bill provides a tax credit of $1,000 to $1,500 to
provide an incentive to hire someone over someone else who might be
better qualified. He asked if it would force that more competent
person onto welfare.
Number 1601
MR. BARTHOLOMEW stated that if this was the only bill, then this
would be a potential scenario. There are development bills which
project a small amount of job growth in Alaska and HB 169 fits into
that projection. The state has made this an objective and it is a
federal government mandate to reduce the welfare roles. This bill
would give someone who is on welfare an advantage. Whether or not
this advantage would be the final crux that beats out someone who
hasn't been on welfare is a tough issue to call. He felt that this
bill would help people who are disadvantaged. There has been a
policy decision to move these people off welfare, the time that
they can remain on welfare has been shortened. This bill suggests
that the state needs to do something to help those people. He felt
there could be a small possibility that it would harm other people
looking for work who are not on welfare.
Number 1664
CHAIRMAN BUNDE commented that it wouldn't be a welfare affirmative
action program.
Number 1668
REPRESENTATIVE KEMPLEN mentioned that HB 169 deals with the social
issue of moving people off of welfare into the work place. He
referred to a conference last week which dealt with welfare reform.
One of the issues raised was turnover in entry level positions in
the number of businesses located in the state. Welfare recipients
need to learn basic skills. The purpose of welfare reform is to
give those people who are on welfare those basic skills.
Businesses need to have an incentive to bring those people into the
workforce. Businesses will invest time in teaching these people
how to be a good employee. This bill gives businesses some
incentive to spend a little bit of extra time with these employees.
REPRESENTATIVE KEMPLEN asked how the 880 figure was derived.
Number 1782
MR. BARTHOLOMEW said that in discussions with the Department of
Health and Social Services and the Department of Labor they did not
have a good method of estimating an exact number. The tax credit
only applies to tax paying corporations, a large number of
employers don't pay taxes because of the size of their business.
The tax code is only structured to tax a small percentage of
businesses in Alaska. The DOR looked at how many businesses
claimed the federal credit and what percentage of employees were
hired. The DOR then backed these numbers and made them applicable
to Alaska. Economic models were developed with an estimated range
of 500 to 1,000 people who could be hired as a result of this
incentive. No one had a comfort level of what this exact number
should be. The 880 figure is a rough estimate.
Number 1856
MR. BARTHOLOMEW explained that for wages, the credit is up to
$1,000 with a $500 incentive if training is provided. The total
tax incentive is $1,500. The DOR looked at what the federal credit
provided and a discussion was held on how much of an incentive
should the state be willing to provide to bring people into work.
This involved a decision about what amount of treasury money the
state would be willing to lose for someone who might obtain a job
anyway. It also involved the idea that if you provide too big of
an incentive, the balance is inappropriately tipped. The financial
incentive started out smaller and as discussions were held the
amount increased. The average firm on the federal credit was
getting a $378 credit. The state will be providing a much bigger
incentive than the federal program.
Number 1920
REPRESENTATIVE KEMPLEN mentioned that one of the comments at the
conference was that businesses felt the $1,500 wasn't enough of an
incentive.
Number 1967
PAM LaBOLLE, President, Alaska Chamber of Commerce, stated that her
organization is supportive of this legislation. They feel that it
doesn't create jobs, but member employers feel that there is a
great deal of turnover and a related cost of bringing someone in
with very little job experience. Given the opportunity to hire
someone with experience over someone who doesn't, the business will
chose the person with the experience so this incentive will not
take a job away from a more qualified applicant. She wasn't sure
how many businesses would qualify for the tax credit, but the
bottom line is that HB 169 provides a credit for the extra effort
of training someone who doesn't have any experience. She stated
business' concerns over the education system in Alaska.
TAPE 97-43, SIDE A
Number 0000
REPRESENTATIVE GREEN asked if there would be merit in having a
business develop a five year plan to avoid the large turnover.
Number 0036
MS. LaBOLLE answered that these employers with the large turnover
have struggled with how to reduce training costs. At the
conference mentioned by Representative Kemplen, businesses
mentioned a $2,500 per employee training cost with a 60 percent
turnover.
Number 0085
REPRESENTATIVE GREEN suggested that if just a small fraction was
added to the wage, then that $2,500 would be stretched over a long
period and turnover would be reduced.
Number 0098
MS. LaBOLLE answered that it is the nature of the type of employee
that causes the turnover.
Number 0130
REPRESENTATIVE VEZEY asked the average wage or pay scale. He said
that all the information he has seen indicates that our welfare
payment is far above any entry level wage. He wondered how the
state was going to get people to take an entry level job.
Number 0185
MS. LaBOLLE felt that welfare recipients were not going to have a
choice. The welfare program is going to disappear from under these
recipients and then they will have to work.
Number 0202
REPRESENTATIVE VEZEY asked why the state would need to pay an
incentive to employers.
Number 0216
MS. LaBOLLE clarified that the incentive would go to the employer.
The state is trying to find places to put people who must come off
the welfare rolls. The bill encourages businesses to consider
those people.
Number 0266
REPRESENTATIVE VEZEY stated that if those people are forced to go
out into the job market, then why does the state need to pay the
employer an incentive to hire them.
Number 0291
MS. LaBOLLE answered that some businesses say this labor pool is
not that large because of the job turnover. There isn't an
abundance of people in that labor pool.
Number 0314
REPRESENTATIVE VEZEY responded that we haven't kicked people off of
welfare yet.
Number 0317
MS. LaBOLLE answered that this labor pool will not be large, even
when welfare is cut. Businesses expect that people who come off
welfare will go into these basic, entry level positions.
REPRESENTATIVE VEZEY stated that this was his point. He questioned
why the state needed to pay businesses to hire someone they are
looking to hire.
Number 0339
CHAIRMAN BUNDE announced that this was the first time this bill was
heard and it would be held for the committee's consideration.
ADJOURNMENT
There being no further business to conduct, CHAIRMAN BUNDE
adjourned the meeting of the House Health, Education and Social
Services Standing Committee at 5:42 p.m.
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