05/11/2002 06:25 PM House L&C
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| + | SB 252 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
May 11, 2002
6:25 p.m.
MEMBERS PRESENT
Representative Lisa Murkowski, Chair
Representative Andrew Halcro, Vice Chair
Representative Kevin Meyer
Representative Norman Rokeberg
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
Representative Pete Kott
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 252(RLS)
"An Act renaming the Alaska Human Resource Investment Council as
the Alaska Workforce Investment Board and relating to its
membership; relating to repayment on promissory notes for work-
related items paid for by grant programs; extending the
termination date of the state training and employment program;
relating to employment and training activities; and providing
for an effective date."
- MOVED CSSB 252(RLS) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: SB 252
SHORT TITLE:EMPLOYMENT AND TRAINING PROGRAM/BOARD
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
01/22/02 2003 (S) READ THE FIRST TIME -
REFERRALS
01/22/02 2003 (S) L&C, FIN
01/22/02 2003 (S) FN1: (LWF); FN2: (LWF); FN3:
(LWF)
01/22/02 2003 (S) GOVERNOR'S TRANSMITTAL LETTER
02/14/02 (S) L&C AT 1:30 PM BELTZ 211
02/14/02 (S) Heard & Held
02/14/02 (S) MINUTE(L&C)
04/18/02 (S) L&C AT 1:30 PM BELTZ 211
04/18/02 (S) Heard & Held
04/18/02 (S) MINUTE(L&C)
04/25/02 (S) L&C AT 1:30 PM BELTZ 211
04/25/02 (S) Moved CS(L&C) Out of
Committee
04/25/02 (S) MINUTE(L&C)
04/26/02 2972 (S) L&C RPT CS 5DP NEW TITLE
04/26/02 2972 (S) DP: STEVENS, AUSTERMAN,
DAVIS, LEMAN,
04/26/02 2972 (S) TORGERSON
04/26/02 2972 (S) FN1: (LWF); FN2: (LWF);
04/26/02 2972 (S) FN3: (LWF)
05/02/02 (S) FIN AT 9:00 AM SENATE FINANCE
532
05/02/02 (S) Heard & Held
05/02/02 (S) FIN AT 4:00 PM SENATE FINANCE
532
05/02/02 (S) Moved CS(FIN) Out of
Committee
05/02/02 (S) MINUTE(FIN)
05/02/02 (S) MINUTE(FIN)
05/06/02 3173 (S) FIN RPT CS 2DP 5NR 1AM NEW
TITLE
05/06/02 3173 (S) NR: KELLY, HOFFMAN, OLSON,
WILKEN,
05/06/02 3173 (S) WARD; AM: DONLEY; DP:
AUSTERMAN, LEMAN
05/06/02 3173 (S) FN4: (LWF); FN5: (LWF)
05/06/02 3173 (S) FN6: (LWF); FN7: (LWF)
05/08/02 (S) RLS AT 9:30 AM FAHRENKAMP 203
05/08/02 (S) MINUTE(RLS)
05/08/02 (S) MINUTE(RLS)
05/08/02 (S) MINUTE(RLS)
05/10/02 3293 (S) RULES TO CALENDAR W/CS 5/10
NEW TITLE
05/10/02 3294 (S) FN4: (LWF); FN5: (LWF)
05/10/02 3294 (S) FN6: (LWF); FN7: (LWF)
05/10/02 3297 (S) READ THE SECOND TIME
05/10/02 3298 (S) RLS CS ADOPTED UNAN CONSENT
05/10/02 3298 (S) ADVANCED TO THIRD READING
UNAN CONSENT
05/10/02 3298 (S) READ THE THIRD TIME CSSB
252(RLS)
05/10/02 3298 (S) PASSED Y19 N1
05/10/02 3299 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/10/02 3321 (S) TRANSMITTED TO (H)
05/10/02 3321 (S) VERSION: CSSB 252(RLS)
05/10/02 (S) RLS AT 9:30 AM FAHRENKAMP 203
05/10/02 (S) MINUTE(RLS)
05/11/02 3510 (H) READ THE FIRST TIME -
REFERRALS
05/11/02 3510 (H) L&C, FIN
05/11/02 (H) FIN AT 1:30 PM HOUSE FINANCE
519
05/11/02 (H) -- Recessed to call of Chair
--
05/11/02 (H) L&C AT 0:00 AM CAPITOL 17
WITNESS REGISTER
MARY JACKSON, Staff
to Senator John Torgerson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 252 on behalf of the sponsor,
Senator Torgerson.
MARK MICKELSON, Assistant Director
Job Training & Work Readiness
Division of Employment Security
Department of Labor & Workforce Development
PO Box 25509
Juneau, Alaska 99802-5509
POSITION STATEMENT: During hearing on SB 252, answered
questions.
REBECCA NANCE GAMEZ, Deputy Commissioner
Office of the Commissioner
Department of Labor & Workforce Development
PO Box 21149
Juneau, Alaska
POSITION STATEMENT: During hearing on SB 252, answered
questions.
PAT DAVIDSON, Legislative Auditor
Division of Legislative Audit
Legislative Budget and Audit Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During hearing on SB 252, discussed the
governor's discretionary fund.
JAMES WAKEFIELD, Chair
Balance of State Workforce Investment Board
17325 Pt. Lena Loop Road
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of SB 252.
LINDA HULBERT, Vice Chair
Alaska Human Resources Investment Council
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 252.
DON ETHERIDGE, Lobbyist
Alaska AFL-CIO
710 W. 9th Street
Juneau, Alaska 99801
POSITION STATEMENT: Provided comments on SB 252.
ACTION NARRATIVE
TAPE 02-74, SIDE A
Number 0001
CHAIR LISA MURKOWSKI called the House Labor and Commerce
Standing Committee meeting to order at 6:25 p.m.
Representatives Murkowski, Halcro, Meyer, Rokeberg, and Crawford
were present at the call to order. Representative Hayes arrived
as the meeting was in progress.
SB 252-EMPLOYMENT AND TRAINING PROGRAM/BOARD
CHAIR MURKOWSKI announced that the only order of business would
be CS FOR SENATE BILL NO. 252(RLS), "An Act renaming the Alaska
Human Resource Investment Council as the Alaska Workforce
Investment Board and relating to its membership; relating to
repayment on promissory notes for work-related items paid for by
grant programs; extending the termination date of the state
training and employment program; relating to employment and
training activities; and providing for an effective date."
Number 0063
MARY JACKSON, Staff to Senator John Torgerson, Alaska State
Legislature, informed the committee that this is the governor's
legislation brought forward to extend the State Training
Employment Program (STEP). She noted that Senator Torgerson had
requested an audit of the STEP and after going through the
audit, a number of amendments have been offered to the
legislation throughout the process. She explained that the
audit found that there was a problem with reporting, which the
department understands. Probably the most difficult issue had
to do with the competitiveness of the program. Ms. Jackson
pointed out that STEP is paid for by a diversion from the
Unemployment Insurance Trust Fund. The entire point of STEP is
to train people in order to avoid unemployment. The theory, she
explained, is that more people working results in more being
paid into the trust. Therefore, the trust becomes more solvent
and draws can be taken to train people. In that context, unions
provide training programs. However, there was concern that
language in the original legislation restricted private entities
from competing in certain areas and thus the Senate Finance
Standing Committee eliminated that language.
MS. JACKSON pointed out that initially recommendations were for
a one-year extension. The audit recommended four years, but the
current legislation specifies two years. By next year, there
are a number of reports, as specified on page 28 of CSSB
252(RLS), that the Department of Labor & Workforce Development
must provide to the legislature. She highlighted the sixth
report and stated that the issue is whether all employers should
pay into the STEP. Currently, the State of Alaska doesn't pay
into the STEP, although its employees would be eligible to use
the program.
Number 0475
CHAIR MURKOWSKI turned attention to the fifth report, the status
of the governor's discretionary fund.
MS. JACKSON said that the governor's discretionary fund "is no
more." On page 13, the audit report specifies that in 1999 the
STEP Plan action steps identified the creation of a governor's
discretionary fund for statewide activities. The aforementioned
was surprising, especially since STEP was supposed to be for
training and grants were to be available. Although it was
determined that the governor's discretionary fund wasn't
[utilized], the audit pointed it out.
CHAIR MURKOWSKI noted that the committee packet includes a one-
page document [from Senator Gene Therriault's office] discussing
the governor's discretionary fund. The document explains where
the set aside funds were used. The document says, "I think we
are getting a little bit of a dodge from the department about
any continued use of set-aside funds into FY 02. Maybe this is
a question that they should be asked at the Senate Labor and
Commerce committee meeting."
MS. JACKSON related her understanding that the matter was
resolved. She emphasized that the STEP is supposed to be the
program of last resort.
Number 0671
REPRESENTATIVE MEYER requested that Ms. Jackson explain the five
different fiscal notes.
MS. JACKSON explained that the state doesn't pay anything for
this program, the funds come through the Unemployment Insurance
Trust Fund. There are no general funds (GF) used for the STEP.
MS. JACKSON, in response to Representative Rokeberg, confirmed
that the provisions that are repealed serve as basically a
sunset provision so that the department will return to the
legislature in three years. She highlighted that the department
has to report to the legislature within ten days of the Twenty-
Third Legislature on the questions raised in the audit.
REPRESENTATIVE ROKEBERG asked if the Senate considered the
question raised in the audit regarding the participation of
organized labor in the STEP.
MS. JACKSON replied yes and reiterated that was the reason for
the amendment made by the Senate Finance Standing Committee on
page 17 of the legislation.
REPRESENTATIVE ROKEBERG pointed out that on page 15 of the audit
it says, "We acknowledge that unions are a valuable partner in
training Alaskans. However, given that unions have a funding
source for training through their dues collection process, we
question how DLWD [Department of Labor & Workforce Development]
and AHRIC [Alaska Human Resources Investment Council] ensure
that STEP funding is not being used by unions to supplant rather
than leverage." He ventured to say that 99 percent of the
private business people in the state who are paying the
[majority] of this tax would be very upset if they knew they
were funding union apprenticeship programs. Representative
Rokeberg expressed concern with the aforementioned. He
questioned why he [as a private business owner] would pay,
subsidize, organized labor out of his gross receipts to do
training [for unions].
MS. JACKSON said that was exactly the issue that was discussed
at length with the department. The issue ties in with the
department's better reporting and tracking and data
requirements.
Number 0953
CHAIR MURKOWSKI pointed out that the only entity involved in the
report is DLWD. She asked whether there has been any discussion
regarding input outside of DLWD because she didn't want the
report to be totally biased with DLWD's perspective.
MS. JACKSON related her thought that it might be appropriate to
ask the Alaska Chamber of Commerce to read [the report] and
comment. She was sure that many of the private industry
councils and private businesses would be willing to come forward
[and comment].
CHAIR MURKOWSKI remarked that she wasn't sure that including
input outside of DLWD would require an amendment to the
legislation.
Number 1126
REPRESENTATIVE CRAWFORD informed the committee that the STEP
allows [unions] to bring people in from the Bush to obtain
training. The reason this money goes toward union
apprenticeship programs is because those programs are in place
and deliver the training to those in need of jobs. Although the
STEP may be the program of last resort in some areas, the
individuals, no matter their location, receive good training.
The STEP is necessary for those who don't have the same
advantages to those located in Anchorage or Fairbanks.
Representative Crawford took exception to Representative
Rokeberg's earlier comment that he, as a businessman, is
subsidizing rich unions. Representative Crawford said, "Those
are the training programs that are in place. We're just trying
to get people to work; it's not to put ... anybody ... out of
business."
REPRESENTATIVE ROKEBERG asked if the department keeps a
breakdown of the geographic location of the training offered in
the state.
Number 1290
MARK MICKELSON, Assistant Director, Job Training & Work
Readiness, Division of Employment Security, Department of Labor
& Workforce Development, explained that the department has done
a yearly evaluation through research and analysis. In response
to Representative Rokeberg, Mr. Mickelson said he believes that
in 2002 approximately 45 percent of the resources were spent in
the Anchorage and Matanuska Susitna Valley region.
REPRESENTATIVE ROKEBERG commented that it was good and was a
real improvement from the 15 percent he remembered from four
years ago. He asked if the reason behind the increase is
because the department is being responsive to where the job
needs are.
MR. MICKELSON explained that the allocation for STEP is based on
several factors, including the rate of unemployment, the number
of people who file, et cetera. It's based on the residence of
the unemployment insurance claimants, he specified. In further
response to Representative Rokeberg, Mr. Mickelson clarified
that the STEP fund is split between local areas designated under
the Workforce Investment Act: the Anchorage Mat-Su Consortium
and the balance of the state. Funds for training are generally
let through two channels, one of which is an areawide
competitive request for proposal (RFP). The other methodology
is called individual referral in which eligible clients come
into one of the departments one-stop offices around the state
and could be referred to preexisting training. Therefore, there
are large grants and individual grants. Most years there has
been close to full utilization and expenditure, although there
have been years in which it was less.
REPRESENTATIVE ROKEBERG asked if in years of surplus extra
training programs in Kotzebue and (indisc.) were funded.
Number 1465
REBECCA NANCE GAMEZ, Deputy Commissioner, Office of the
Commissioner, Department of Labor & Workforce Development,
clarified that those were funded through some lapse funds and an
additional diversion. She further clarified that it was a
separate appropriation under a different Senate bill.
REPRESENTATIVE ROKEBERG inquired as to the rationale of funding
organized labor's apprenticeship programs vis-à-vis other
programs.
MS. GAMEZ directed attention to page 150 of the audit report,
which contains a statement with which the department doesn't
fully concur. She echoed Representative Crawford's earlier
comments that the STEP funds obtained by the unions aren't
necessarily used for training; much of it is used for travel
expenses. Therefore, the unions can offer training in rural
Alaska, such as Bethel and Nome.
Number 1556
CHAIR MURKOWSKI returned to the issue of the governor's
discretionary fund and its current status.
MS. GAMEZ related that a couple of years ago AHRIC wanted to
direct more funds toward certain occupations. Therefore, AHRIC
directed the activities. At that time, AHRIC was located in the
Office of the Governor. Currently, AHRIC is located in the
department, although it isn't a division of the department. At
this point, there has been no action by AHRIC to have those
[discretionary] funds available.
Number 1656
PAT DAVIDSON, Legislative Auditor, Division of Legislative
Audit, Legislative Budget and Audit Committee, Alaska State
Legislature, said she believes that much of the STEP was meant
to parallel and cover areas not covered by the former federal
Jobs Training Partnership Act (JTPA) program which included a
number of restrictions and the governor's discretionary fund.
Under JTPA a small pool of money was exempted in order to allow
those funds to be used on priorities identified by the governor.
When the STEP was established, the JTPA concept of the governor
being able to identify particular areas that needed training
dollars was continued. During the audit, the auditors had a
difficult time trying to identify what the governor's
discretionary fund was spent on because the department didn't
track it. Ms. Davidson said that the notion that there was a
pool of money that was available for the governor to spend is a
bit of a misconception.
REPRESENTATIVE ROKEBERG asked if there were funds that were
unaccounted for.
MS. DAVIDSON replied no and reiterated that it was difficult to
determine whether funds would be identified as part of the
governor's discretionary expenditure as opposed to any other
expenditure made for the STEP.
Number 1790
JAMES WAKEFIELD, Chair, Balance of State Workforce Investment
Board, informed the committee that the board, which consists of
over 50 percent private sector members, strongly supports SB
252. This program has been around since 1989 and has trained
over 18,000 Alaskans. There are many success stories. For
example, the City of Hyder has put half of its eligible work
population to work through a STEP program. Mr. Wakefield
highlighted that the program doesn't tap GF dollars. With
regard to the joint apprentice programs using the funds, Mr.
Wakefield said that it has provided rural Alaskans the ability
to obtain training in fields that allow them to work near their
home in rural Alaska. The board would like to see a permanent
program, he related.
Number 1905
LINDA HULBERT, Vice Chair, Alaska Human Resources Investment
Council, encouraged the committee to pass SB 252.
DON ETHERIDGE, Lobbyist, Alaska AFL-CIO, informed the committee
that not all the STEP funds the unions use are for the union's
membership. Many of the STEP funds are used to train rural
Alaskans for things such as installing and maintaining water
lines.
REPRESENTATIVE ROKEBERG asked if unions are having difficulties
recruiting apprentices.
MR. ETHERIDGE answered that for some time there wasn't a lot of
apprenticeship drive due to the lack of work. Now that the work
has increased, interest in apprenticeship programs has
increased. He explained that the number of apprentices that are
accepted is adjusted according to the amount of work available.
REPRESENTATIVE ROKEBERG related his belief that laborers would
be particularly well-suited to participate in short-term
specialized training. He asked if Mr. Etheridge had an example
of situations in which STEP funds had been used for the
aforementioned.
MR. ETHERIDGE responded that quite a bit of that is being done
in the Northern region. Instructors are being sent out
frequently to teach people how to install and maintain water and
sewer lines. The laborers and operators work together on these
projects.
REPRESENTATIVE ROKEBERG remarked that he believes such uses of
the fund are good and he didn't object to those. However, he
reiterated his objection to the funds being used to subsidize
the apprenticeship programs. Representative Rokeberg said he
thinks it's a good goal, particularly for outreach programs, to
obtain minorities and members from outlying areas. However,
using STEP funds for travel offsets tax dollars that should
belong to an organization [such as the AFL-CIO].
MR. ETHERIDGE noted that a lot [of the funds] aren't used for
the apprenticeship program. He informed the committee that
during a recent training session in Metlakatla, a large group of
locals were trained to perform hazardous waste cleanup. Out of
the dozen folks trained, [the union] received one member.
Number 2163
REPRESENTATIVE CRAWFORD added that over the last several years,
the ironworker's union has taken in 10-20 apprentices each year.
However, this year [the ironworker's union] has taken in over 50
apprentices and is actively looking for more. Representative
Crawford knew that [the ironworker's union] has applied for some
of these [STEP] funds in order to have folks come into the
school in Anchorage. He clarified that none of the [STEP] funds
have ever been used for the ironworker's apprenticeship program,
although the funds have been used to get people [to a location]
where they can be trained.
MS. DAVIDSON, in response to whether the Legislative Audit
Division has any outstanding concerns, pointed to the following
two items. Ms. Davidson clarified that the Legislative Audit
Division wasn't looking for outreach to a particular segment of
the Alaskan workforce. However, the STEP program can be used to
fund training for unemployed, under employed, and people whose
job may be ending due to economic conditions. The STEP program
could use an outreach program for the under employed or the
soon-to-be unemployed. In fiscal year 2001 over $800,000 was
allowed to lapse and at the end of fiscal year 2001 there was an
unexpended balance of funds in the amount of $2.4 million. The
concern surrounds STEP and diverting employee portions of
unemployment insurance taxes; the idea to keep people from
drawing unemployment and to increase the wage base. In general,
the STEP program is meant to revenue expenditure neutral.
Therefore, the concern with regard to the lapsed money is that
if the money isn't being spent, then the benefits aren't being
created. Ms. Davidson explained that STEP works because the
employee's portion is a set percentage while the employer's
percentage is a percentage plug whatever it talks to balance the
fund. To the extent that benefits aren't received from the
program, there will be an increased benefit on the employer's
portion.
TAPE 02-74, SIDE B
MS. DAVIDSON said that the division wanted to highlight that
spending the money, performing the outreach, and creating the
benefits is a continuing goal of the program. Ms. Davidson
turned to the issue of displacing federal and possibly private
training funds. The division couldn't say that [the STEP
program] was displacing because there wasn't enough
documentation to demonstrate that these were supplemental funds
rather than supplanting. She mentioned that perhaps the
aforementioned is a matter of documentation, which the agency
could resolve. Ms. Davidson pointed out that during the audit
the federal JTPA program changed to the Workforce Investment Act
(WIA) program and many of the rules loosened. For instance,
industry-specific training is now allowed under the federal
program. Therefore, the division [wanted to be sure] that the
vendors, the grantees, the municipalities, and balance of the
state analyzed the clients to make sure that the training
programs couldn't be funded by the federal program before going
to the STEP program. Although the division didn't really see
that happening, the expectation is that the information and data
collection and reporting being sought will provide the
information necessary to make the aforementioned assessment.
REPRESENTATIVE ROKEBERG noted that there is an organization in
the state that endeavors to establish nonunion apprenticeship
programs. He asked if the audit reviewed that.
MS. DAVIDSON said that the audit didn't focus on that, although
an amendment made in the Senate Finance Standing Committee which
eliminated that concern. Therefore, regardless of whether a
training program is union or nonunion, the program would be on
the same playing field when applying for a grant.
Number 2219
REPRESENTATIVE MEYER moved to report CSSB 252(RLS) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, it was so ordered.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
7:15 p.m.
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