Legislature(1995 - 1996)
02/21/1996 01:37 PM Senate CRA
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SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
February 21, 1996
1:37 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chairman
Senator Randy Phillips, Vice Chairman
Senator Tim Kelly
Senator Fred Zharoff
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 20
"An Act establishing the Alaska municipal basic services program,
relating to certain programs of state aid to municipalities and
recipients in the unorganized borough; and providing for an
effective date."
SENATE BILL NO. 207
"An Act authorizing the issuance and sale of revenue bonds to fund
public wastewater systems, nonpoint source water pollution control
projects, including solid waste management systems, and estuary
conservation and management projects; authorizing the use of the
Alaska clean water fund to pay and secure the bonds and to pay
costs related to issuance and administration of the bonds;
authorizing certain measures to secure payment of the bonds; and
amending Alaska Rule of Civil Procedure 3."
SENATE BILL NO. 229
"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."
PREVIOUS SENATE COMMITTEE ACTION
SB 20 - See Community & Regional Affairs minutes dated 2/22/95,
2/7/96, 2/14/96.
SB 207 - See Community & Regional Affairs minutes dated 2/5/96,
2/14/96.
SB 229 - See Community & Regional Affairs minutes dated 2/7/96,
2/12/96.
WITNESS REGISTER
Bill Rolfzen
Division of Municipal Assistance
Department of Community & Regional Affairs
P.O. Box 112100
Juneau, AK 99811-2100
POSITION STATEMENT: Offered information on CSSSSB 20(CRA)
Lamar Cotten, Deputy Commissioner
Department of Community & Regional Affairs
P.O. Box 112100
Juneau, AK 99811-2100
POSITION STATEMENT: Testified in support of CSSSSB 20(CRA), with
exception of one provision
Kevin Ritchie, Executive Director
Alaska Municipal League
217 2nd St.
Juneau, AK 99801
POSITION STATEMENT: Testified in support of CSSSSB 20(CRA)
Marie Sansone, Assistant Attorney General
Civil Division
Department of Law
P.O. Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Offered information on proposed amendments to
SB 207
Rebecca Nance, Director
Division of Employment Security
Department of Labor
P.O. Box 25509
Juneau, AK 99802-5509
POSITION STATEMENT: Offered information on SB 229
Mark Mickelson
Division of Community & Rural Development
Department of Community & Regional Affairs
P.O. Box 112100
Juneau, AK 99811-2100
POSITION STATEMENT: Offered information on SB 229
Chris Miller, Chief
Research Analysis Section
Department of Labor
P.O. Box 25509
Juneau, AK 99802-5509
POSITION STATEMENT: Offered information on SB 229
ACTION NARRATIVE
TAPE 96-10, SIDE A
Number 001
CHAIRMAN TORGERSON called the Senate Community & Regional Affairs
Committee meeting to order at 1:37 p.m.
SSSB 20 ALASKA MUNICIPAL BASIC SERVICES PROGRAM
SENATOR TORGERSON brought CSSSSB 20(CRA), which was adopted by the
committee on 2/7/96, before the committee as the first order of
business, and directed attention to a proposed amendment as well as
a new fiscal note from the Department of Revenue. He then asked
Bill Rolfzen of the Department of Community & Regional Affairs to
explain the department's amendment.
Number 030
BILL ROLFZEN , Division of Municipal & Regional Assistance,
Department of Community & Regional Affairs, explained that when a
new borough incorporates under the existing Municipal Assistance
Program, its base amount assessment is set at the same amount as a
borough that is closest in population. The amendment would
eliminate one borough as far as determining base amounts. He
referred to a spreadsheet which lists 13 boroughs. For 12 of the
boroughs, the average base amount is approximately $94,000, and the
remaining borough's base amount is $1.2 million. By excluding
that one borough, it will be a much more equitable determination of
base amount for future boroughs.
Number 055
SENATOR RANDY PHILLIPS moved the adoption of the following
amendment to CSSSSB 20(CRA):
Amendment No. 1
Page 5, line 27: After "incorporation" insert ",excluding each
borough with a per capita full and true property value exceeding
$500,000"
Hearing no objection, the Chairman stated the motion carried.
Number 065
LAMAR COTTEN , Deputy Commissioner, Department of Community &
Regional Affairs, voiced the department's support for of the intent
and language of the bill, with the exception of one the bill's
provisions which changes the date that checks are received from
February 1 to July 31. In response to an inquiry from Senator
Torgerson, he stated the department, as part of the Administration,
supports the 8 percent cut recommended by the Governor.
KEVIN RITCHIE , Executive Director, Alaska Municipal League,
commenting on the Administration's position on the fiscal note,
said the bill itself has an internal equity to it, and that is a
very important part of it. He added the question of the funding is
a whole separate issue and, certainly, the Legislature doesn't have
to take the recommendation of the 8 percent cut as the one it goes
with.
Number 103
SENATOR ZHAROFF asked for assurance there would be no problem with
Metlakatla's allocation. BILL ROLFZEN responded Metlakatla
currently participates in revenue sharing as an unincorporated
community, and under municipal assistance, as a municipality, this
bill does not change that.
Number 125
SENATOR RANDY PHILLIPS moved CSSSSB 20(CRA), as amended and with
the accompanying fiscal note, be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
SB 207 REVENUE BONDS: WATER & WASTE PROJECTS
Number 130
SENATOR TORGERSON brought SB 207 before the committee as the next
order of business. He directed attention to four proposed
amendments for the committee's consideration.
SENATOR RANDY PHILLIPS moved adoption of the following Amendment
No. 1:
Amendment No. 1
Page 6, line 6: After "in" insert "the current fiscal year and"
Page 8, line 12: After "letters" insert "and lines"
Number 160
MARIE SANSONE , Assistant Attorney General, Civil Division,
Department of Law, said she worked closely with the Department of
Environmental Conservation and the Department of Revenue in
preparing SB 207. The amendment was proposed by the Department of
Revenue to add the term "the current fiscal year" which was
inadvertently omitted when the statute was being drafted.
SENATOR TORGERSON asked if there was objection to the adoption of
Amendment No. 1, and hearing none, he stated it was adopted.
Number 175
SENATOR RANDY PHILLIPS moved adoption of the following Amendment
No. 2:
Amendment No. 2
Page 2, line 7: After "authorized" insert ",subject to (b) of this
section"
Page 2, line 13: Insert a new subsection to read: "(b) The
state bond committee may not issue more than $15,000,000 in revenue
bonds during a fiscal year, excluding refunding bonds. The total
amount of revenue bonds outstanding at any one time may not exceed
$150,000,000, including principal and interest owed on the bonds."
SENATOR TORGERSON explained the amendment puts a cap on the revenue
bonds by setting out that there can be no more than $15,000,000 in
revenue bonds sold in one year, and it cannot exceed $150,000,000
for the total program.
MARIE SANSONE stated the Administration's support for the language.
SENATOR ZHAROFF said he has no problem with setting a cap, but his
concern is having some kind of safety mechanism for the small
community that may have the ability to take advantage of the
program, but could be excluded because they are bumping up against
the cap. SENATOR TORGERSON said an attempt was made to draft some
language to address his concern, but there were problems with its
interpretation. MARIE SANSONE pointed out the intent language in
Section 1 of the bill does recognize that the financing of needed
water quality improvements is the purpose of this legislation.
Also, there is another provision which requires the state bond
committee to consider that in all its decisions.
SENATOR TORGERSON asked if there was objection to the adoption of
Amendment No. 2. Hearing none, he stated Amendment No. 2 was
adopted.
Number 235
SENATOR KELLY moved adoption of the following Amendment No. 3:
Amendment No. 3
Page 7, line 19 - 21: Delete all material.
Page 8, lines 27 - 28: Delete "The provisions of this section
shall be liberally construed in order to carry out the purposes for
which they were enacted."
MARIE SANSONE said the term "liberal construction," when talking
about statutes, is a very standard phrase. It is a term that is
recognized by the State Supreme Court. Because this is a remedial
statute that is designed to achieve the public purpose of promoting
public health and welfare, the statute will have a liberal
construction if that ever became an issue. She said it does serve
a purpose to leave this provision in the statute, but she suggested
if the committee wants to change it, the term "broadly construed"
could be used in its place.
SENATOR KELLY voiced his concern that if, in fact, it does goes to
court he doesn't want them to "liberally construe" that language,
and he doesn't want to give the court that option.
SENATOR TORGERSON asked if there was objection to the adoption of
Amendment No. 3, and hearing none, he stated it was adopted.
Number 305
SENATOR HOFFMAN moved adoption of the following Amendment No. 4:
Amendment No. 4
Page 2, line 5: Delete "state agencies" and insert "other
qualified entities"
Page 9, line 18: Delete "state agencies" and insert "other
qualified entities"
Page 9, line 20: Delete "state agencies" and insert "other
qualified entity"
Page 9, line 22: Delete "state agencies" and insert "other
qualified entity"
Page 10, line 11: Delete "state agency" and insert "other
qualified entity
Page 11, line 10: Following "1" insert "other qualified entity"
means an intermunicipal or interstate agency as those terms are
used in 33 US>C. 1383, and may include an authority, corporation,
instrumentality, enterprise, or other entity formed through an
agreement between a municipality and one or more other governmental
entities under AS 29.35.010(13) or under art. X. sec. 13,
Constitution of the state of Alaska, or between a municipality and
a regional housing authority under AS 18.55.996(b);
(2)"
Page 11, lines 22 - 25: Delete ";
(2) "state agency" means a department, authority, public
corporation, instrumentality, or other administrative unit of the
executive branch of state government"
SENATOR TORGERSON , explaining the amendment, said the intent is to
take out the references and definition of "state agency" and to
insert "other qualified entity" and its definition in its place.
A "state agency" is not an eligible entity because state agencies
cannot dedicate funds to the repayment of their debt obligations.
Senator Hoffman also requested municipalities and regional housing
authorities be added so they could enter into joint agreements.
MARIE SANSONE stated the department supports the amendment.
Number 310
SENATOR TORGERSON asked if there was objection to the adoption of
Amendment No. 4, and hearing none, he stated it was adopted. He
also stated the four adopted amendments would be incorporated into
a committee substitute.
Number 315
SENATOR RANDY PHILLIPS moved that CSSB 207(CRA) and the
accompanying fiscal notes be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
Number 325
SB 229 STATE TRAINING & EMPLOYMENT PROGRAM
SENATOR TORGERSON brought SB 229 before the committee as the final
order of business. He noted there were three proposed amendments
before the committee for its consideration.
SENATOR RANDY PHILLIPS moved adoption of the following Amendment
No. 1:
Amendment No. 1
Page 4, line 17: Delete "may" and insert "shall"
Page 4, line 20: Delete "pilot project"
Page 4, line 21: Delete "If" and insert "When"
Page 5, line 5 - 6: Delete "a pilot project grant for a period of
up to two years" and insert "grants"
Page 5, line 7: Delete "an"
Page 5, line 8: Delete "training entity" and insert "training
entities. A training entity is eligible for a
grant under this section"
Page 5, line 16: Delete "pilot project"
REBECCA NANCE , Director, Employment Security Division, Department
of Labor, stated the department had no objection to the amendment.
SENATOR TORGERSON asked if there was objection to the adoption of
Amendment No. 1, and hearing none, he stated it was adopted.
Number 352
SENATOR RANDY PHILLIPS moved the adoption of the following
Amendment No. 2:
Amendment No. 2
Page 5, line 1: After "." insert: "The department shall give
preference to projects and services that train individuals in
industries identified in the resident hire report required under AS
36.10.130 as employing a disproportionate percentage of
nonresident individuals."
SENATOR TORGERSON explained the amendment directs the department to
put as a number one priority training people in Alaska to fill the
positions that are held by nonresident workers.
REBECCA NANCE stated the department wants to continue targeting
local hire.
Number 380
SENATOR TORGERSON asked if there was objection to the adoption of
Amendment No. 2, and hearing none, he stated it was adopted.
Number 385
SENATOR RANDY PHILLIPS moved adoption of the following Amendment
No. 3:
Amendment No. 3
Page 5, line 19: Delete "established for the council"
REBECCA NANCE stated the amendment was recommended by the
Department of Labor.
SENATOR TORGERSON asked if there was objection to the adoption of
Amendment No. 3, and hearing none, he stated it was adopted. He
also stated the three amendments would be incorporated into a
committee substitute, which brought the committee substitute before
the committee.
Number 400
SENATOR KELLY noted there were two different fiscal notes on the
legislation, and he asked what the differences were. SENATOR
TORGERSON responded that the original fiscal notes did not add up,
so corrected fiscal notes were requested.
SENATOR KELLY said we are talking about over $3 million being
allocated for the program, but grants in 1994 totaled just a little
over $1 million. He asked where the rest of the money is going.
MARK MICKELSON , Division of Community & Rural Development,
Department of Community & Regional Affairs, directed attention to
a "flow chart" which he said would hopefully provide a picture of
the method by which the STEP funds will flow within the state. He
said a series of new graphs has been provided to the committee
depicting how the 1995 funds were utilized at each of the SDA or
the private industry council levels. The listing originally
provided to the committee was a listing of the "larger grants" that
were let as a result of the competitive RFP process. The balance
of the true program funds, or grant funds that have gone on as
depicted in the new chart, is spent on eligible clients and on
eligible services. They are just done through a different process
in terms of how it is recorded.
SENATOR KELLY said it still doesn't show where the other $1.5
million is going. MR. MICKELSON said the funding is recorded, it
is tracked. A summary report is provided to the Department of Labor
every year identifying all the program activities. For example, if
someone went to a classroom training program at AVTEC or the
University of Alaska, etc., that has been recorded as an actual
expenditure. However, they do not have the records of the hundreds
of transactions of all those small vouchers. He said they are just
providing the straight tuition and the normal costs to send
somebody to one of those training programs.
SENATOR RANDY PHILLIPS observed that even though they may not
record it, they still must have some kind of accounting for those
small voucher transactions. MR. MICKELSON agreed that was correct.
He said for every individual who is served by this program, a file
is maintained that contains the full application, certification
that the information provided is true, eligibility verification,
etc., so that information does exist.
SENATOR KELLY commented there are a whole lot of individuals who
are paying their own tuition and their own transportation, and yet,
if some state employee graces you, then you get it for nothing.
MR. MICKELSON responded they are trying to make the program
accessible and available where people would normally go for
assistance for employment, for unemployment insurance. He conceded
they perhaps could do a better job at making the service better
known to everyone. He also clarified that tuition at the
University of Alaska is an allowable expense if it is compatible
with someone's career goals. He added that they do not allow
people to pursue long-term educational goals just for the sake of
going to school. The program is focused on reattachment to the
labor force.
SENATOR KELLY asked if they would send any of their clients out of
state for training. MR. MICKELSON answered that's generally not
the case, but it would be possible if a very specialized training
course or program was not available in the state of Alaska.
However, the individual still must meet all the criteria.
SENATOR KELLY asked if there is a parallel with the STEP program
and the training provisions contained in the welfare reform
legislation. SENATOR TORGERSON said he has discussed this with
Mike Andrews of the Alaska Human Resource Investment Council and
this does not parallel the welfare reform legislation, although the
welfare reform creates another training program. The STEP program
is driven by employee contributions so it's really not general fund
money.
TAPE 96-10, SIDE B
Number 001
After brief discussion on how the employer/employee contributions
are calculated, SENATOR TORGERSON invited Chris Miller to the table
to explain the process.
Number 060
CHRIS MILLER , Chief, Research Analysis Section, Department of
Labor, explained that when they calculate the UI tax rate, the
total contribution is separated at an 82 percent contribution from
the employer and 18 percent from the employee. The tax rate is
determined by multiplying the 82 percent times what they call their
average benefit cost rate. The same thing is then done for the
employee. He added it is possible that the employee tax will vary,
but it varies only slightly over time. The last time the employee
tax rate changed was in 1991 when it dropped to 0.5 percent. The
0.5 percent is on the wages earned up to the taxable wage base,
which is currently at $24,400.
To clarify the process, Mr. Miller said, as an example, for the
current year the maximum an employee would pay, based on the
taxable wage base of $24,400, would be $122, and the average an
employer would pay, discounting the varying rates they have, would
be $529 for a maximum.
SENATOR KELLY asked, if he, as an employer, is paying 2.17 percent
for domestic help, what's the highest rate somebody is paying and
how much that employee is paying. MR. MILLER responded the highest
rate is 5.4 percent for the employer and the employee is still at
0.5 percent. He also clarified for Senator Kelly that the
employers at the 5.4 percent rate are penalty employers. These are
employers who have not met various reporting requirements, or for
other reasons they are paying a penalty rate.
Number 215
SENATOR KELLY commented that the program is quickly becoming a
funding mechanism, with DOL, DCRA and AHRIC getting parts of the
pot. He asked if any of the numbers go through the budget process.
ARBE WILLIAMS , Director, Administrative Services, Department of
Labor, replied they do and they are listed in various places in the
Department of Labor budget. SENATOR KELLY asked why they are
asking for more money this year. MS. WILLIAMS said the difference
between the total grant amount is what they estimate will be
collected from one-tenth of employees' salaries.
SENATOR KELLY wondered who is getting this money because he doesn't
know anybody who his benefiting from this program. MARK MICKELSON
related that the system is capable, in the future, of providing a
lot of information on where individuals are being served, what they
are enrolled in, etc., if that kind of information is desired. He
added there are over 6,000 Alaskans who are very pleased this
program has been in place. He has seen a lot of good things done
with the program, and he believes they can provide the kind of
accountability and information that would give assurance that this
program is well designed in intention.
Number 320
SENATOR TORGERSON asked about the possibility of finding a cap so
that no more than a certain amount of money is taken out for
administration. He said it is an employee giving money and it is
funding other segments of government. MS. WILLIAMS spoke to
reorganization efforts that are going on in the Employment Security
Division, and she said they are well aware of the fact
administratively, at all levels, that if they are not efficient, it
costs their programs.
Number 358
SENATOR TORGERSON stated he was going to hold SB 229, and he
requested that the department provide more detail on where this
money goes to balance the $3.6 million figure. He also believes it
is a good idea to look at the possibility of a cap to limit the
amount of overhead for the program.
There being no further business to come before the committee, the
meeting was adjourned at 2:55 p.m.
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