HOUSE LABOR AND COMMERCE STANDING COMMITTEE April 17, 1998 3:37 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative John Cowdery, Vice Chairman Representative Bill Hudson Representative Jerry Sanders Representative Joe Ryan Representative Tom Brice MEMBERS ABSENT Representative Gene Kubina COMMITTEE CALENDAR * HOUSE BILL 484 "An Act exempting services of certain sports officials at amateur sporting events from coverage under the Alaska Employment Security Act; and providing for an effective date." - MOVED HB 484 OUT OF COMMITTEE CS FOR SENATE BILL 334(FIN) "An Act relating to guidelines and standards for state training programs; relating to the Alaska Human Resource Investment Council (AHRIC); extending the termination date of the state training and employment program; and providing for an effective date." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HB 484 SHORT TITLE: UNEMPLOY EXEMPT AMATEUR SPORTS OFFICIAL SPONSOR(S): LABOR & COMMERCE BY REQUEST Jrn-Date Jrn-Page Action 4/09/98 2943 (H) READ THE FIRST TIME - REFERRAL(S) 4/09/98 2943 (H) LABOR & COMMERCE 4/17/98 (H) L&C AT 3:15 PM CAPITOL 17 BILL: SB 334 SHORT TITLE: STATE TRAINING PROGRAMS/HUMAN RES.COUNCIL SPONSOR(S): FINANCE Jrn-Date Jrn-Page Action 1/27/98 (H) MINUTE(FIN) 3/06/98 2770 (S) READ THE FIRST TIME - REFERRAL(S) 3/06/98 2770 (S) FINANCE 3/24/98 (S) FIN AT 9:00 AM SENATE FINANCE 532 3/27/98 (S) FIN AT 8:00 AM SENATE FINANCE 532 3/31/98 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/01/98 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/01/98 (S) RLS AT 12:10 PM FAHRENKAMP RM 203 4/01/98 (S) MINUTE(RLS) 4/01/98 3090 (S) FIN RPT CS 4DP 3NR NEW TITLE 4/01/98 3090 (S) DP: SHARP, PEARCE, PHILLIPS, TORGERSON; 4/01/98 3090 (S) NR: PARNELL, DONLEY, ADAMS 4/01/98 3090 (S) FISCAL NOTES TO CS 4/01/98 3090 (S) (DHSS, GOV, LABOR, DOE-3) 4/01/98 3090 (S) ZERO FISCAL NOTE TO CS (ADM) 4/02/98 3112 (S) ZERO FNS TO CS (DHSS/S.FIN, DOE/S.FIN-3) 4/02/98 3113 (S) RULES TO CALENDAR 4/2/98 4/02/98 3114 (S) READ THE SECOND TIME 4/02/98 3114 (S) FIN CS ADOPTED UNAN CONSENT 4/02/98 3114 (S) ADVANCED TO THIRD READING UNAN CONSENT 4/02/98 3114 (S) READ THE THIRD TIME CSSB 334(FIN) 4/02/98 3115 (S) PASSED Y17 N1 E2 4/02/98 3115 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 4/02/98 3115 (S) DUNCAN NOTICE OF RECONSIDERATION 4/03/98 3139 (S) RECONSIDERATION NOT TAKEN UP 4/03/98 3139 (S) TRANSMITTED TO (H) 4/06/98 2882 (H) READ THE FIRST TIME - REFERRAL(S) 4/06/98 2882 (H) LABOR & COMMERCE, FINANCE 4/17/98 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER DWIGHT PERKINS, Special Assistant Office of the Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Provided information on HB 484. REBECCA GAMEZ, Director Employment Security Division Department of Labor P.O. Box 25509 Juneau, Alaska 99802-5509 Telephone: (907) 465-2711 POSITION STATEMENT: Testified on HB 484. BOB WALKER, President Anchorage Softball Umpires' Association P.O. Box 210504 Anchorage, Alaska 99521 Telephone: (907) 694-5713 POSITION STATEMENT: Testified in support of HB 484. GARY MATTHEWS, Executive Director Alaska School Activities Association 4120 Laurel Street Anchorage, Alaska 99508 Telephone: not provided POSITION STATEMENT: Testified in support of HB 484. PATRICIA LILLIAN, Commissioner Alaska Amateur Softball Association 2850 Drake Drive Anchorage, Alaska 99508 Telephone: (907) 272-7683 POSITION STATEMENT: Testified in support of HB 484. JOHN RENN, Secretary/Treasurer Anchorage Football Association 7014 Saturn Circle Anchorage, Alaska 99504 Telephone: (907) 337-2605 POSITION STATEMENT: Testified in support of HB 484. JACK HEESCH, Representing Farthest North Umpire's Association P.O. Box 201608 Anchorage, Alaska 99520 Telephone: (907) 279-0478 POSITION STATEMENT: Available to answer question on HB 484. SENATOR JOHN TORGERSON Alaska State Legislature Capitol Building, Room 514 Juneau, Alaska 99801 Telephone: (907) 465-2828 POSITION STATEMENT: Provided information on SB 334. MIKE ANDREWS, Executive Director Alaska Human Resource Investment Council 3601 C Street, Suite 380 Anchorage, Alaska 99503 Telephone: (907) 269-7485 POSITION STATEMENT: Provided information on SB 334. MIKE McMULLEN, Personnel Manager Division of Personnel Department of Administration P.O. Box 110201 Juneau, Alaska 99811-0201 Telephone: (907) 465-4431 POSITION STATEMENT: Provided information on SB 334. BARBARA THOMPSON, Director Teaching and Learning Support Department of Education 801 West Tenth Street, Suite 200 Juneau, Alaska 99801 Telephone: (907) 465-8727 POSITION STATEMENT: Provided information on SB 334. KRYSTAL MURPHY, Legislative Administrative Assistant to Senator Torgerson Alaska State Legislature Capitol Building, Room 514 Juneau, Alaska 99801 Telephone: (907) 465-2828 POSITION STATEMENT: Testified on SB 334. KRAG JOHNSEN, Administrative Assistant to Senator Drue Pearce Alaska State Legislature Capitol Building, Room 518 Juneau, Alaska 99801 Telephone: (907) 465-6594 POSITION STATEMENT: Provided information on SB 334. ACTION NARRATIVE TAPE 98-47, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:37 p.m. Members present at the call to order were Representatives Rokeberg, Cowdery, Sanders and Ryan. Representatives Hudson and Brice arrived at 3:45 p.m. and 4:00 p.m. respectively. HB 484 - UNEMPLOY EXEMPT AMATEUR SPORTS OFFICIAL Number 0007 CHAIRMAN ROKEBERG announced HB 484, "An Act exempting services of certain sports officials at amateur sporting events from coverage under the Alaska Employment Security Act; and providing for an effective date," is before the committee. CHAIRMAN ROKEBERG said the Senate and a number of people, particularly the folks in Representative Vezey's office, asked the committee to introduce a House Labor and Commerce bill. He stated this legislation is intended to exempt unemployment compensation requirements for tax liabilities of amateur sports officials for nonprofit and certain schools and we are endeavoring to influence the United States Congress to pass legislation to accommodate. Number 0018 DWIGHT PERKINS, Special Assistant, Office of the Commissioner, Department of Labor, appeared before the committee. He said, "Speaking on behalf of HB 484, it does exempt certain sports officials in amateur sporting events from coverage of Employment Security Act. There was a concern brought to the department's attention about liability of an employer and the tax liability they owe in the event a sports official applies for unemployment compensation. It is known in the industry that these usually aren't full-time jobs, as most cases not even a supplemental income. The folks do it, a lot of them do it to be with their kids while they're at their soccer games or the baseball games and they're compensated a small amount of money - maybe $8 or $10 or $15 per sporting event. What brought this to the attention of the department was that there was a claim filed by an individual and when it was recognized that they did work for an organization to be a sports official, because of federal law, we, the department must collect those taxes." MR. PERKINS continued, "The department is neutral on this legislation, we don't have a real concern exempting the sport officials based on the information we have received. And it is noted, as you said Mr. Chairman, that all parties involved here should encourage the Congressional Delegation to try to get legislation that would exempt nonprofits from the FUT (Federal Unemployment Tax) Act. So with that, the department does not have a concern with this legislation." He added that program people from the department are present to answer technical questions. CHAIRMAN ROKEBERG asked, isn't the amount of monies and the amount of pay so small that this could create an Administrative burden for the department. MR. PERKINS reiterated, if this is the only employment that an individual has, they have more concerns about making daily living payments than they do collecting unemployment insurance. It probably would be of the lower tier if they did qualify just based on those wages and the time period that it takes to qualify for unemployment benefits. REPRESENTATIVE JOHN COWDERY asked what would be the cost of insurance if it's required. Number 0054 MR. PERKINS stated, "The problem is, is that the employment tax liability on the nonprofits, and if they are required to pay into the trust fund, the concern is, is that the youth organizations ... and adult programs that are out there, the user fees, if you will, or the cost to play baseball, or hockey or those kinds of sports, would have to cover this unemployment tax." He said that's not to say that it's a horrendous amount, but when nonprofits are trying to make it and provide youth activities, and trying to get by on the least amount of money to pay for the sports officials and keep the programs going, it is a large amount to them. He noted it does represent quite a bit of an increase to the programs to cover that cost. REPRESENTATIVE COWDERY agreed. He indicated that that's what we're trying to achieve and could defeat some of it if we didn't weigh this. MR. PERKINS said he believes Representative Cowdery's analysis is correct and that the fear is that some programs may end up not continuing because of the tax liability on them. He reiterated that it isn't a large amount, but when you put it in perspective of the program itself - if they're going to have to pay another $5 or $10 for entry fees as a participant, some parents might not be able to afford that. REPRESENTATIVE COWDERY mentioned he has sponsored youth hockey, basketball and baseball teams. He said, "It's not inexpensive for some parents, that have large families, to come up with the money but - so I think that I would be - agree that I don't think this is a wise decision to implement it - a requirement." Number 0082 CHAIRMAN ROKEBERG referenced a January 21, 1998, letter to Rebecca Gamez, Director, Employment Security Division, Department of Labor, from the U.S. Department of Labor. He read, "Your state law to include coverage of these services, referring to the officiating for governmental entities and certain nonprofit organizations, must cover that or you face the possibility of being found out of conformity with federal law. Such a finding would mean a significant loss of funds to the state and a loss of federal tax credits to the employers." He asked what does that mean. MR. PERKINS replied, "Pretty much as you stated, in that if we are not in compliance, when an individual files for an unemployment claim it is the duty of the department to find out what employers that individual worked for. Then it is also our duty to make sure that the tax liability has been paid. If it has not, it is our responsibility to make sure that it does get paid." CHAIRMAN ROKEBERG asked, "We're talking about matched money, or what are we talking about dollar-wise, what are we losing." MR. PERKINS deferred the question to Director Gamez. Number 0096 REBECCA GAMEZ, Director, Employment Security Division, Department of Labor, appeared before the committee on HB 484. She pointed out the division is fully federally funded. She said it would mean that upwards of about $17 million to $20 million would be in jeopardy. That's the entire Unemployment Insurance administrative funding amount, and that's what is used to operate the Unemployment Insurance program in the state. CHAIRMAN ROKEBERG commented, Mr. Perkins, the department's only neutral in this. He then called on Representative Ryan. Number 0102 REPRESENTATIVE JOE RYAN stated the effective date is conditioned upon the federal law being changed. He added that's a "what if scenario," and indicated he didn't know why the committee is wasting a lot of time. He asked the chairman if he wanted a motion to move HB 484. CHAIRMAN ROKEBERG mentioned a number of witnesses haven't shown up. Number 0106 BOB WALKER, President, Anchorage Softball Umpires' Association, testified via teleconference in support of HB 484. He said, "Let me say this, I have a girl's (indisc.) program here in Anchorage that is not a funded program through the school district. Any increase whatsoever that has to deal with the administrative costs of my association ... will put that program in a severe handicap. I mean, these young ladies are doing bake sales, carwashes, their parents are doing all kinds of things to try to come up with the necessary funding for that program. Anything that would impact this umpires' association would also have to be passed onto the user group and that in turn would cause these programs to stumble, and in some cases fail. I would appreciate your consideration on this." MR. WALKER continued, "We're all working people of my association, we have regular jobs, so we submit our 1099's, we pay our taxes. We do this - I can almost guarantee you to the man and woman for the sheer enjoyment of the program. Many of us are ex-ballplayers and athletes that just do this because we love to stay in the game. I, for example, I had my sister go through college on a fast-pitch scholarship. So these are things that are important to me as an individual and to my organization. We do this for the fun of it. No one is making any money at this. But I've talked to the CPA (certified public accountant) that does the taxes for our particular nonprofit association and to do the payroll, the payroll exemption, and all the deductions that would go with that, and then you'd - it's a possibility of being throwing into the federal income tax realm. We're looking at conservatively - we figure 20 percent increase in our operating costs to do this. Myself, and all the rest of my board, including the treasurer that takes care of most of our finances, are indeed volunteers. None of us get paid for doing this. So I'd appreciate your favorable consideration in this particular bill and hopefully the Congressional group in Washington, Senators Stevens and Murkowski, can help us get some federal legislation that will help us as well." Number 0128 GARY MATTHEWS, Executive Director, Alaska School Activities Association, testified via teleconference in support of HB 484. He said, "The Alaska School Activities Association is a private nonprofit corporation that has 195 high school members in Alaska. We speak for those schools plus over 800 amateur sports officials that we license throughout Alaska. We're speaking in favor of this legislation. There are thousands of amateur sports officials in Alaska. They for the most part work as a labor of love, they get very little compensation, and I would say nearly all of them, if not all - they don't rely on the money they're making from officiating to provide their livelihood, they all have to have some other type of occupation. They provide their own uniforms, their own shoes, and in many cases, their own training, they pay to be licensed, and they're putting out a lot of time and expenses just to be able to officiate." MR. MATTHEWS continued, "In many of the smaller communities in the state, the local schools, the local high schools and the local organizations find officials themselves. They arrange with the officials to officiate their contests. In a larger community, there are official associations like in Anchorage and Fairbanks, and so forth. They're informed just to schedule officials so that the schools have a satisfactory and easy way of making sure that people will show up to officiate their games. If it's determined that these officials are covered by unemployment compensation, the costs to the schools will be greatly increased and I know that there are many other organizations that are not schools within Alaska that share that same concern. It's crucial to the schools in the state to make sure this legislation is passed. We support the federal legislation and we support both the Senate and House bill that would exempt amateur sports officials from the requirements of the Unemployment Compensation Act." CHAIRMAN ROKEBERG asked for written testimony. MR. MATTHEWS mentioned he had already submitted correspondence. Number 0150 CHAIRMAN ROKEBERG asked Mr. Matthews, "In the high school athletic realm here, do the umpires you normally hire, or referees, are they considered not independent contractors, or is there other forms of compensation or (indisc.)." MR. MATTHEWS replied they consider them independent contractors. Number 0153 PATRICIA LILLIAN, Commissioner, Alaska Amateur Softball Association, testified in support of HB 484 via teleconference. She said, "We sanction about a thousand teams and roughly 300 umpires annually. I'm speaking in support of HB 484. Statewide programs provide recreational and adult and youth softball opportunities in at least 20 communities. Within these areas, many of the local associations are viable partners with municipalities and city governments for program development and facility improvements. I believe that the failure to provide relief for the amateur sports officials in the areas as unemployment tax will affectively increase costs for all these programs. Youth programs are especially vulnerable in today's economy with school budgets being reduced in almost all areas." MS. LILLIAN continued, "In 1989, the Alaska Legislature passed a bill that exempted amateur sports officials from the unemployment taxes but they were forced to rescind this same bill in 1990 when it was determined by Region X that Alaska was in a noncompliance posture. In 1994 the Alaska Legislature passed a bill that exempts amateur sports officials from Workers Compensation Insurance payments. It seems to me that the Alaska Legislature has clearly indicated their intent to exempt amateur sports officials from these various tax kinds of situations. I would urge you to continue with this intent by adoption of HB 484." Number 0171 JOHN RENN, Secretary/Treasurer, Anchorage Football Association, testified in support of HB 484 via teleconference. He said, "We officiate high school football in the Anchorage area and we also officiate youth football in Anchorage and the Mat-Su valley area. We are in total support of HB 484. Our organization ... is a nonprofit organization, therefore, all of our incoming fees go to the people who officiate the games. The compensation of the game fees are relatively low and each official himself must pay for his own uniform, his own equipment, his own travel to and from the game, must pay for his federal taxes, must pay his liability insurance and all his certification fees. So as a result, someone who officiates a two-hour youth game, after he pays his expenses, winds up with about 8 or 10 bucks in his pocket. So our officials are lucky if we keep 50 percent of the fees. Any additional costs, such as the unemployment insurance, or any other taxes or insurance, obviously are going to have to go back to the high schools or the youth activity groups we support. As I said, we are in total support of the bill, 484, and I would like to thank you for your time in allowing me to testify." Number 0184 JACK HEESCH, Representing Farthest North Umpire's Association, said he is available to answer questions. He believes members of the association are on line in Fairbanks and can speak themselves. CHAIRMAN ROKEBERG noted the monitors don't indicate a connection to Fairbanks. He said, "Mr. Heesch, you've reviewed this situation, do you know of what do other states do in terms of this issue. Have they - do you have any idea on that, or have you been able to research that?" JACK HEESCH responded, the state he is most familiar with is California. He directed the committee's attention to the "Referee Magazine," which discusses a situation similar to ours. He noted that California adopted similar legislation and believes they did it without worrying about the federal legislation. He reiterated that's his understanding of what happened in California. JACK HEESCH further explained, "The truth of the matter is, nationally this is a much discussed issue both in terms of unemployment compensation, worker's compensation and the federal income tax, along with I suppose state income tax is where they have it. In most cases, organizations have chosen to treat amateur sports officials as independent contractors and that essentially is how they've been treated here in the state of Alaska for at least as long as I've been involved with sports here. And it was only when someone actually filed a claim, that the case comes before the Department of Labor, and the Department of Labor of course if obliged to take action on it. Up until this time, essentially the organization has moved along believing that these guys and women are essentially independent contractors. And that's generally how it's treated nationally, this is not just a local issue, it truly is a national issue and we are of course pressing forward with Senators Murkowski and Stevens, and to the extent that we will, where we have national organizations, will be seeking their support from their delegations throughout the country. I hope I'm answering your question." Number 0205 CHAIRMAN ROKEBERG asked Mr. Heesch to provide the committee with additional information about what's happening in other states before the bill goes to the floor. JACK HEESCH stated he could do that. Number 0209 REPRESENTATIVE COWDERY made a motion to move HB 484 with individual recommendations. He indicated it didn't have a fiscal note. CHAIRMAN ROKEBERG asked if there were any objections, There being none, HB 484 moved from the House Labor and Commerce Standing Committee. CHAIRMAN ROKEBERG called a brief at ease at 3:58 p.m. CHAIRMAN ROKEBERG called the meeting back to order at 4:00 p.m. CHAIRMAN ROKEBERG noted HB 484 didn't have a fiscal note and asked Mr. Perkins to provide one. MR. PERKINS mentioned a zero fiscal note should have been provided. REPRESENTATIVE RYAN pointed out the fiscal note in the packet. Number 0222 REPRESENTATIVE COWDERY amended his motion to include the zero fiscal note. There being no objections HB 484 moved from the House Labor and Commerce Standing Committee. SB 334 - STATE TRAINING PROGRAMS/HUMAN RES.COUNCIL Number 0224 CHAIRMAN ROKEBERG announced CSSB 334(FIN), "An Act relating to guidelines and standards for state training programs; relating to the Alaska Human Resource Investment Council; extending the termination date of the state training and employment program; and providing for an effective date," is before the committee. Number 0226 SENATOR JOHN TORGERSON, Alaska State Legislature, appeared before the committee in support of SB 334. He said, "It's a good bill, I hope you vote for it. Mr. Chairman, the Co-Chair of Finance this summer created a new subcommittee of Finance. It basically spun- off all the programs that had to do with job training, job placements, employment placement, etcetera, and put it into one subcommittee. So it's the first time that the state - or somebody in the state would take a look at the programs across all the departmental responsibilities. When we started this, we found that we had training programs in I believe nine different departments under nine different commissions. In 1995 we created the Alaska Human Resource Investment Council, which was charged with looking after many of our training programs, which basically ended up being the federal programs and it was the thought of ... the Finance Committee that we should put all the training programs in the state underneath the auspice of this Human Resource Investment Council so you have one group that does - it looks after and makes recommendations." SENATOR TORGERSON further explained that through this process they determined that some programs needed to come directly under the supervision of this and other programs just needed to be assessed from time to time to see if their programs need to be moved underneath the entire performance measures and standards portion of the bill, or if they should be just left out there for assessment. He indicated there were several reasons for some of the decisions that were made, some of which had to do with jeopardizing federal funding, other programs such as the Police Academy and Fire Training Academy are mostly self-sustaining and they hire and place their own graduates and things of that nature and the oversight wasn't quite as demanding as some of the other programs we have. SENATOR TORGERSON mentioned he quickly wants to walk through a few sections of the bill and will address a couple of the amendments that the department would like to make. Number 0245 SENATOR TORGERSON pointed out the Human Resource Council existed of 26 members. He said, "We attempted to reduce that to 21 members by eliminating the five commissioners that are sitting on this and making those commissioners nonvoting members. We were supplied a letter after my deal with the director of Human Resources - if they could supply a letter from the federal government saying that we are jeopardizing federal funds by removing these positions that I would be glad to offer an amendment back to put these folks back in as full-voting members. They have supplied that letter but it was after the bill left our possession, so that would be the one amendment that I would recommend that this committee make is to reinstate on page 1, those commissions, that would be subsection (2)." The commissioners of Commerce and Economic Development, Community and Regional Affairs, Education, Health and Social Services, and Labor, or each respective commissioner's designee; CHAIRMAN ROKEBERG asked him to supply a copy of that letter. SENATOR TORGERSON said they amended the section that relates to compensation of board members. This would allow non-governmental employees to receive per diem and travel allowances since they currently aren't allowed to receive any funds and that in a way jeopardized private industry and private folks showing up at the meetings. Especially a small business person because they would lose money in trying to make this committee work. Senator Torgerson reiterated that they made an amendment which allows per diem for those members. Sec. 44.19.622. Compensation. Members of the Alaska Human Resource Investment Council listed in or appointed under AS 44.19.620(a), including a designee of a member attending in place of the member, serve without compensation but are entitled to per diem and travel expenses authorized by law for boards and commissions under AS 39.20.180. Nonvoting members of the council appointed under AS 44.19.620(b) serve without compensation and are not entitled to per diem and travel expenses. A commissioner appointed under AS 44.19.620(c) or the commissioner's designee is entitled to per diem and travel expenses as a state employee. Number 0260 SENATOR TORGERSON indicated Section 6, page 3, is one of the more important sections of the bill. He said what we're asking is that the Human Resource Council, the chair and the vice-chair be made up of members that are appointed from private business and industry. Over a period of time, the chairman and vice-chairman and the immediate past chairman would be from industry and business and not from, let's say a bureaucrat somewhere, it would be from the private sector. Sec. 44.19.623. Officers. The Alaska Human Resources Investment Council shall elect a chair and a vice-chair from among the members listed in or appointed under AS 44.19.620(a)(4) [AS 44.19.620(a) WHO ARE FROM THE PRIVATE SECTOR. THEY SHALL ALSO ELECT A VICE-CHAIR]. The chair and vice-chair serve in their positions at the pleasure of the council. SENATOR TORGERSON continued, "Then we go on to actually put in statute four permanent standing committees for this council. These standing committees came right out of their bylaws, or something ... currently existing and we just adopted the language of their bylaws. And then we said that the chairman of these standing committees must be from the private sector." SENATOR TORGERSON referred to Section 8(c) stating the executive committee is made up of the three officers, the chair, the vice- chair and the past chair and the four chairmen of the standing committees. He said, "It is our intent that this committee - the Human Resource Committee -- made up of folks from the business and industry and private sector. This way we're assured of that." Number 0273 SENATOR TORGERSON said, next we go on and put performance measures in the bill - that they must evaluate the programs. He referred to page 6, line 19, subparagraph 8. He said we call for administrative costs not to exceed 15 percent, or if federal law has lesser cap, then it could be a lesser number. It also calls for a report to the legislature and evaluation of the programs by the 30th day of the session and identifies ways for the agencies to consolidate and collaborate with each other to save costs. (8) adopt regulations that set standards for the percentage of a grant that may be used for administrative costs; the regulations must clearly identify and distinguish between expenses that may be included in administrative costs and those that may not be included in administrative costs; the percentage allowed for administrative costs may not exceed the lesser of 15 percent or the amount permitted under the requirements of a federal program, if applicable; (9) report annually to the legislature, by the 30th day of the regular legislative session, on the performance and evaluation of training programs in the state subject to review under (f) of this section; and (10) identify ways for agencies operating programs subject to oversight by the council to share resources, instructors, and curricula through collaboration with other public and private entities to increase training opportunities and reduce costs; SENATOR TORGERSON explained Section 10 [page 7, beginning on line 3]. He explained that it provides for the oversight of the council itself and adopts measures that they are to use to evaluate the programs. Number 0280 SENATOR TORGERSON said, "Page 8, subparagraph (f), starting on line 9 are the programs we are asking to be included underneath the direct oversight of the AHRIC (Alaska Human Resource Investment Council committee) - I'll let you read them for yourself. These, we feel are most directly related in that the Human Resource Council should look at these programs and use the performance measures that are laid out earlier in the bill to make sure that they (indisc.) in those programs." SENATOR TORGERSON referred to page 9, Section (G). He said we talk about the other programs that we wish the council to assess the programs and make recommendations to the legislature and the governor as to whether or not they'd have these programs move into subsection (f), performance in other measures. Senator Torgerson said, "And again ... most of these are programs that AHRIC should take a look at but a lot of them are self-directed such as the Police Academy. And again, you can read that list for yourself. Some of them are not very big programs as far as money is concerned and others have their own direction. And a couple of them are federal programs, which did indeed -- if we were to provide oversight and caps as we wanted to do, would jeopardize our federal funding for it." SENATOR TORGERSON referred to subsection (h), page 10. He said, "The University of Alaska asked to come underneath this program so we did include them in here - just asking that they would file a report using the same measures that are in this bill for their training programs. ... The university would then supply us with a list of how they were measuring-up with their training programs as to what we're trying to do with this bill." Number 0294 SENATOR TORGERSON referred to the handouts provided by the Administration. He said he reviewed the amendments and believes the one amendment that would replace the commissioners needs to be adopted so we don't jeopardize funding of the JTPA (Job Training Partnership Act) program and other federal programs. SENATOR TORGERSON said he reviewed the amendments with his staff and the staff of Senator Pearce and agreed with the first one, which related to the commissioners, and disagreed with the rest as not being something we need to worry about. Senator Torgerson referred to the last section regarding RSA's (reimbursable services agreement) and interagency agreements. He said, "What we did as a funding source for this bill is put in that they may RSA money from the departments - that AHRIC's responsible for oversight of .75 percent, or three-quarters of 1 percent fee would go to AHRIC for the payment for their duties for the oversight and that generates somewhere around $600,000. ... OMB (Office of Management and Budget) is currently working with Senator Pearce's staff and ours on what this number might be. And it maybe that we have to amend that up to 1 percent, which they're talking about here, but I have not seen enough information to suggest that that amendment take place at this time so I'm not recommending that that happen." SENATOR TORGERSON referred to Section 9, Additional Programs for Evaluation. He said, "The other amendments that I would like to mention particularly are from the Department of Education. I did supply the committee a memo on those three amendments - I believe they had a separate letter somewhere. ... It starts with Section 9(f)(3) the department non public schools function, and then it goes onto Section 10(g)(7) and (h). ... The major area of contention was that we are jeopardizing federal funding by having the Vocational Rehabilitation under the oversight of the AHRIC committee and that's just not true. It was under jeopardy when we had it under section (f), and they did have a letter that we required them to produce under section (f) - and after we read the letter we agreed that they could not qualify or it could jeopardize federal funding if we added additional performance measures so we moved them out of there under the section that this calls for an assessment and evaluation by the AHRIC committee. ... That's no more than you and I getting public information and looking at it. This doesn't jeopardize any federal law. It may if ... recommendations come out of there, later on, but just the AHRIC committee looking at it, it can't jeopardize anything. SENATOR TORGERSON concluded it may seem like a complicated bill, but the intent is really to bring all these training programs under one umbrella, to get somebody to start looking after these things, make this council run by private industry. They're hiring the people, so we wanted them to provide the oversight for that training and that's really the intent of the bill, and it makes itself pay for itself by assessing the programs at (indisc.) fee. Number 0334 REPRESENTATIVE RYAN referred to page 3, Section 6, "shall elect a chair and a vice-chair from among the members listed in or appointed under AS 44.19.620(a) who are from the private sector..." He asked Senator Torgerson if he had an objection to one of the members being from industry and the other general business so you won't have both members from the same business. SENATOR TORGERSON directed the members to page 2, subparagraph (4). He noted seats are not stipulated in this bill - like oil company versus some other company. If it's the fear of the committee that it could be overloaded in one direction or the other, he wouldn't mind it being more directed. He said it might narrow the pool down to where it would be a little difficult, but we'd have to look at that. (4) four representatives of business and industry, with at least one representative from the private industry councils appointed under 29 U.S.C.1512 and subject to reconstitution under 29 U.S.C. 1515; REPRESENTATIVE RYAN explained it was brought to his attention because someone had asked him to make sure the composition of the board was more uniform and everybody's interest was represented. He referred to page 10, line 28 regarding the University of Alaska. He asked how much will that cost and where will the funds come from. Number 0349 SENATOR TORGERSON replied we're actually assuming the university is going to do this out of the goodness of their heart, we're not paying them to do this. He further stated, "Wendy and folks from the university - Ms. Redman came to us and said basically that they like the performance measures. They are the recipients of some of this money for training - this total budget is $93.8 million if you throw it all in the hat, we're not talking just nickel and dime stuff. The university, by direct grants only, gets a couple million dollars of this, so they're a small player that way. But a lot of people that receive direct, like JTPA where they write the individual check, they'll end up somewhere in the system. It's just felt important that - part of this is tracking that we're going to start doing. We're going to make a deal with the Department of Labor to start tracking these folks a year after they're finished working so we can see what job their doing, how much money they're making and other things which have been really lacking in a lot of these other things. And the university, I believe that some of this stuff would be beneficial to them also. So they wanted to evaluate this - but it wasn't our intent to give them any big chunk of money to do that." CHAIRMAN ROKEBERG asked for clarification of the total scope of funding. He also asked if that includes federal and state funds. SENATOR TORGERSON reiterated it's $93.8 million from all sources. CHAIRMAN ROKEBERG asked if that includes sections (f) and (g). SENATOR TORGERSON replied yes. CHAIRMAN ROKEBERG asked if also included section (h), the university. Number 0362 SENATOR TORGERSON replied, "Actually no - not the university. It would as far as the university might be the recipient of some of the grant money directly, but it's not to show a double-dip. They're more of a provider and so we're not counting the schools that actually receive the money, this is the program that disburse the money or grant the money." CHAIRMAN ROKEBERG noted for the record that Representatives Hudson and Brice are present. Number 0367 SENATOR TORGERSON further commented on Representative Ryan's question regarding targeting. He said, "In a way I'd like to see this try to work with directing this right now to where we are instead of directing it farther into seats. But, again, if it's the will of the committee to do that, I won't try to block it but this is such an improvement of what we were. And, I also had a lot of complaints, of several people in my district that served on the JTPA Board, when they get together - there wasn't the right people making the decisions and it's the hope that by getting business and industry actually running it and private industry being the rest of the executive committee, that it'll change the philosophy, it will take time to do that. And I'm not sure that actually going in and targeting the seats to certain industry, more so than this, would target it any better. But I'll leave that up to your discretion." SENATOR TORGERSON indicated that he had to return to the Senate Finance Committee and noted Krystal Murphy and Krag Johnsen will be able to answer questions. CHAIRMAN ROKEBERG mentioned that he has a feeling that is going to be testimony that Senator Torgerson may want to rebut later. He said he thinks one of the most controversial parts of this is the provision for the overhead, the .75 percent grants and the fact that there may be some problems with the 20 percent as the allocated area. SENATOR TORGERSON indicated he wasn't sure of the 20 percent. CHAIRMAN ROKEBERG stated there is a cap. SENATOR TORGERSON commented 15 percent cap. CHAIRMAN ROKEBERG indicated there's a feeling that, with the added problems in terms of the assessment and evaluation standards, that this will increase the overhead and also duplicate in a sense some of the federal requirements for evaluation and assessment that occur now but they won't necessarily be parallel, therefore raises the cost of the burden up to as much as 20 percent from 15 percent. Number 0389 SENATOR TORGERSON stated, "If this raises administrative costs, we better find a whole entire resource investment council, that's how I'd look at it there's no way this can raise costs. There was some criticism that said the federal government says we can spend 20 and the state saying you can spend 15, but there's no where in federal law does it say you must spend 20 percent on admin. It says not to exceed, and words of that effect, it doesn't say you must spend 20 percent. I don't know of any federal law that tells you your administrations got to be at a certain level, it just tells you, you can't exceed that. As far as the 1 percent versus 3/4 of 1 percent, that's really not a controversy, we don't - AHRIC has no funding sources. This human resource's council only has the source that we give it and what we're asking is that it be an assessment on the programs. So, if through fiscal notes, negotiations, and whatever else, we determine that 3/4 of 1 percent is not enough, then it would be my intent to amend that figure to the right amount." SENATOR TORGERSON continued, "We want them to go out and perform these measures, we want them to assess these programs, and we want them to come back with their recommendations on how to make this thing work and that's going to cost some money. We want this tracked through the Department of Labor, and we want - the Department of Labor doesn't do that for free, they have time and computers, and everything. We want to not short-fund anybody we want to pay for that. But instead of coming in with a general fund appropriation for that, we're assessing the programs for which in some degree should lesson the administrative burden of these other programs once they start relying upon the AHRIC committee and executive committee and Mr. Andrews himself to start proving oversight for these. As you might guess, that some of these programs don't want to be looked at. So you have that entity too, and you have that part of the - whatever that mixes in with this." TAPE 98-47, SIDE B Number 0001 CHAIRMAN ROKEBERG "...this legislature about results-based budgeting and having performance and standards, of which are measurable." SENATOR TORGERSON replied, "Good point. That's actually what caused us to go this far - as we were working through performance- based budgeting. We have still a lawsuit out with our intent language in the legislature, when we make an appropriation we put an intent on there that it would be, if something happened, that you don't spend the money until this particular legislative intent is carried out. In recent Administrations, as well as this one, the intent language had been vetoed and they kept the money. So, my opinion has been a lot of this performance-based things we're doing doesn't get us anywhere, not if you can veto out the performance-based and keep the money. By putting this in statute, it's like etching it in stone, they will follow these guidelines and it is a direct result of the performance-based. But again, because of this, it goes through so many departments and so many programs, it makes it easier to do this all by legislation instead of what we were doing with performance-based." CHAIRMAN ROKEBERG asked if "administrative expenses" should be defined, or did the Senate Finance Committee take that issue up. Number 0013 SENATOR TORGERSON indicated the Senate Finance Committee looked at it. He said he thinks they asked the council to define it and asked it to be uniform across programs. He referred to page 6, line 19. (8) adopt regulations that set standards for the percentage of a grant that may be used for administrative costs; the regulations must clearly identify and distinguish between expenses that may be included in administrative costs and those that may not be included in administrative costs; SENATOR TORGERSON stated, "There are a lot of programs that we're talking about. ... About 40, so you are going to have a substantial difference in how these 40 programs look at each other. But, again, it's the intent to let AHRIC - the executive director and committee look at some kind of uniform rule across all of these programs, keeping in mind that some they won't be able to because of the federal guidelines to them, but that's why we left if pretty open. So I don't think that there's any criticism due because of the language we have in defining administration." CHAIRMAN ROKEBERG asked, "On the section (g) groups, where you have the assessment, no funding or transfer of any of those program funds into the council here to undertake the assessments, so how do you perceive the scope of that assessment and the funding of it." SENATOR TORGERSON stated, "We actually started out with this particular segment, paying a little bit to the AHRIC committee also. It's envisioned that most of these will be a one-time assessment, and we envisioned that this will come through just a fiscal note that we get from them to cover that. I believe it was ... included in the fiscal note as a $40,000. ... Many of these, as I said before, take the Correctional Academy or the Police Academy. I would doubt very seriously if the AHRIC committee would even visit that program. I would guess they'll take a look at their annual report, make a report similar - something saying that they have a 99 percent hire factor. They basically interview and the people in there have a high success rate because they train their own people, and on, and on, and on, and there really isn't a need for oversight. And once they do that, there isn't a need to go back and do that every year, so I would imagine that that would happen." Number 0042 REPRESENTATIVE RYAN mentioned a concern that was brought to his attention. He said you have a maximum of two meetings a year. SENATOR TORGERSON replied yes. REPRESENTATIVE RYAN said they wondered if that could be change to a minimum. SENATOR TORGERSON mentioned that's been brought up. He said, "Actually the entire council's 26 members, and when they get together as 26, they don't get anything done anyway. We did not restrict the subcommittee's meeting - or the amount of times the subcommittee could meet, or the executive committee. It's the intent that this large group get together twice a year, set the policy for the council and then they can adjust that policy at their next meeting which is every 6 months. I guess there might be some criticism there, right now ... this new program is being thought about - that maybe they should meet a little bit more - with the standards that we're trying put on them and the new direction, they might take more direction of that whole council. But even that, after sitting through a meeting, I would say that they'd be better off meeting once a year." Number 0055 REPRESENTATIVE BILL HUDSON referred to the amendments that Senator Torgerson exclusively supported. He asked if the Senator would like the committee to offer those amendments. CHAIRMAN ROKEBERG noted Senator Torgerson supported only one. He said he would like to take more testimony. SENATOR TORGERSON noted the amendment he supports add the commissioners back in. REPRESENTATIVE HUDSON implied that would be two. He referred to Section 1, page 1, line 9, 21 members to 26. Representative Hudson said, "I thought I heard you say you wanted to boost that back up because of the information you'd received." SENATOR TORGERSON replied yes. REPRESENTATIVE HUDSON referred to the first amendment. SENATOR TORGERSON said that's the same thing. He referred to page 1, line 11, the section that is being deleted, and then renumber the sections. He also made reference to the letter stipulating that we are jeopardizing federal funds. SENATOR TORGERSON commented the committee has received the letter. Number 0082 MIKE ANDREWS, Executive Director, Alaska Human Resource Investment Council, appeared before the committee to testify on SB 334. He said, "We've worked very closely with Senators Torgerson and Pearce and with the Senate Finance Subcommittee for Human Resources and the Senate Finance Committee and all of our program partners to work on this legislation. Certainly we were quite surprised at the width and breadth of it ... we have made some improvements and I'd like to have the opportunity to talk about some more ways to improved the program. We have the ability to have 26 members, we're at about 21 because we use cross-representation. And on that committee we have the lieutenant governor, five commissioners and 50 percent of our council are from the private sector. And I just wanted to clear this up, we have private sector representatives, and inside of that there are four specific representatives from business and industry. The private sector really means 'nongovernment employee' on there, so we are mostly a volunteer group that helps assist the State in coordinating and planning the human resource investment system. Right now there are 17 programs under the Alaska Human Resource Investment Council. We created a consolidation report on the human resource programs and we've listed that at a $64 million investment - primarily 80 percent federal, 20 percent state. This bill would add another 23 programs in two different sections of the bill and that would bring it up to the Senator's number of around $93 million." MR. ANDREWS stated, "And certainly the council agrees with the intent that there needs to be improved coordination, cooperation, collaboration and maybe consolidation between some of these programs and that's sort of our charge to look at. The reason I made this list for you, and I do have to make a correction to it, in the middle section (f), it doesn't include the 'Alaska Professional Development Institute'... What this bill asks us to do is take a look at 23 more programs, four of those would be inserted into an evaluation section which means we would apply the accountability measures and the five performance measures to those programs and do an evaluation." MR. ANDREWS continued, "In section (g), which is really the assessment, I think the Senator had it pretty correctly. Our view is to sort of take a look, as others have, as what is the mission, who you serve, what's your funding, what's your legal authority, who to report to, and how do you work with other programs. So we would be charged under this legislation to present that report as part of our annual report in the first 30 days of each session so that legislators could look at both program performance and any other programs that need to possibly come under oversight. And that would provide guidance to the legislature in terms of budget issues and program improvements. It's sort of how the bill works." MR. ANDREWS continued, "I would like to take the opportunity to express on behalf of the council that we have met and we have a consensus opinion. Right now our view is, is that there are some good things in this legislation and there's some things that are not so good and we would like to have an opportunity to try to fix some of those if we could. I don't know if this will work for you, but we'll just take a look at the sheet that follows the listing of the programs. And again, I just wanted to give you a picture of how wide this bill reaches. But if we could look through the suggestions, ... we have settled the issue as commissioners as nonvoting members, Senate Finance has agreed, and you've accepted that today. We appreciate that that any member that asks to sit on one of these councils should have the right to vote, and federal authority says that they should." MR. ANDREWS concluded, "The council has many issues and part of the concern is we have been working for two years, we've been operating for two years, we've been meeting between four and five times a year because this is a very complex and a very rapidly moving environment when you talk about workforce development. You know we have welfare reform now, we're trying to implement one-stop job centers, we're trying to implement performance measures on the basic programs. So, the council feels that it must have the ability to meet as necessary and primarily because it is a point of contact for business and industry and community-based groups to come and speak with council members, and to learn about the programs that we're looking at, but also to bring their needs to us. And we feel that limiting us to just two meetings a year might restrict the ability of the public to meet with us and for us to stay on top of these ever changing issues. Right now Congress is looking at federal block grants, consolidating over 100 employment job training programs into one block grant to states and that would mean that everything would be consolidated and I think the council, facing that possibility, would feel very uncomfortable only meeting twice a year trying to understand our revolution in job training programs." Number 0132 CHAIRMAN ROKEBERG asked how often does the council meet. MR. ANDREWS replied the council currently meets about four to five times a year. He indicated that it's within their budget, but the council calls meetings as necessary and they have called these meetings to stay on top of the issues. Number 0134 REPRESENTATIVE TOM BRICE asked what is the cost per meeting. MR. ANDREWS pointed out most of the meetings are held in Anchorage, it's running approximately $3,000 a meeting, when a meeting was held in Juneau, it cost $5,000. He indicated meetings aren't a budget-buster for them. Inside of that, the council has wrestled for some time with the issue of what's 'private sector' and what's 'business and industry.' And of course the (indisc.) allows that the chair will come from the private sector. Mr. Andrews said, "And so we've wrestled with this as a council, in terms of 'should we elect someone from specifically business and industries, or can it be just from private sector,' and we have had some controversy on the council. The council feels that we need business and industry leadership, but it's unfair to those other private sector members who may be committed, have the talent, have the ability and we think it would be more preferable if you said the chair or vice chair would be from business and industry and the other seat would be from private sector. It's the will of the legislature on that, but that's our opinion." Number 0149 MR. ANDREWS directed the members to page 4, Section 7(b), Executive & Standing Committees. He said, "We appreciate that the Senators have looked at our bylaws and found them to be very descriptive and fitting toward what the intent is. And we feel good about that too, but in this dynamic changing environment it's very difficult when you put a committee's title and all of its duties in statute. That removes the flexibility of a board to really operate and I would say that we don't know of any other board, we've not researched this, but we don't know of any other board in the state that has restrictions on how many times they can meet, who can be its officers, and that its committees will do just these set things. Now we agree, and this - we've only asked for some changes, that those duties and responsibilities should be kept in the bill. We intend to do those things, but we would like to say, let's have four standing committees, but we don't want to name those because - let the council work that out among itself. And so we would like to see you consider that as well. But we don't oppose at all handling those responsibilities that they've outlined." REPRESENTATIVE RYAN said he is concerned with the composition of the committees if they're not composed of council members. He commented that $93 million is a lot of money, and indicated certain groups gravitate toward those kinds of monies, government agencies, certain special interest groups, and so forth, and would have their own agenda. Perhaps everything won't be the way it would have been had the council members themselves, who would be under more public scrutiny, doing the actual work. Representative Ryan noted he would like to make sure there is oversight. Number 0170 MR. ANDREWS explained that it doesn't change who sits on the committees and noted the committee members are members of the council. He stressed that they need the flexibility to name the name of the committee and redirect the committee now and then so that they can improve and this makes it a little bit too concrete for an operating council. He reiterated that they don't see any corporate board operating this way and hoped that they would have that flexibility. CHAIRMAN ROKEBERG said, "In your list of amendments, you have this reflects current law, is this particular subsection 7(b) - as found in your recommended amendment..." MR. ANDREWS interjected that current law allows them to have four standing committees and the chair of the council to appoint chairs to those committees and to operate and create bylaws, and they've done that. He said this new legislation basically takes what they've done in their bylaws and puts it into the legislation. CHAIRMAN ROKEBERG asked are you enabled by your bylaws or any other authorization to have non-council members serve on the special or subcommittees. Number 0182 MR. ANDREWS replied that they are, there is a provision in this legislation and existing, where they are allowed to, when necessary, to create ad-hoc or special committees to involve others. He commented that's not the issue though. CHAIRMAN ROKEBERG commented that we're talking about the four standing committees in terms of the bill. MR. ANDREWS responded those are council members that already sit. He reiterated, when the chair appoints those committees they would like to have the flexibility to say what those committees' names are and what they're going to do - the new legislation lists that in concrete. And, what they have worked out with Senators Pearce and Torgerson's office, is the council has no objection to the list of responsibilities. Mr. Andrews said we fell that is our responsibility and those were set in terms of their discussions and their goals. It's just the council thinks it's a little much to have committees named in legislation. Number 0192 MR. ANDREWS indicated there is a concern with the administrative costs. He said, "What programs reported to Senate Finance, was that on the state funded level, they could meet the 15 percent cap as long as there were some opportunities to determine what administrative costs are. And the problem with all these programs, there are no common definitions, and no common data elements, and that's one of the jobs of this council, so we have said that we need to regulatory flexibility to work with programs because the federal programs will list very specifically what can be spent on administration and they will allow, in some cases 20 percent and in some cases 5 percent. And what we're asking here is that you just remove the word 'the lesser of' because the federal programs that allow, let's say the Joint Training Partnership Act job training programs to exist, have already said that they can spend that money on those issues that they define as administration. Where this creates a problem is at the local level where people receive services through the service-delivery area and private industry councils. As the money passes through the state system, less money will go to the customer - to serve the customer through the private industry councils. And so what our private industry councils and our service providers need is the flexibility to at least spend the federal money in the way the federal authorities have said that they can spend it in. And as you can see, as they begin to assist us with performance measures and reporting out, there will be some additional costs, and we just want to hold those programs. The problem is because they have agreed to work with us on these performance measures and be held accountable." Number 0210 REPRESENTATIVE BRICE asked, "What kind of workload increase - is it expected, are these folks expected to carry out to evaluate the attainment of these standards and the creation of these standards?" MR. ANDREWS responded, "In general, because were dealing with so many different programs, the federal (indisc.) of some of these programs have already given a list of things that are required. Some of the accountability and performance measures that we're including are not required at this time. So for them to comply they would have to be able to gather that data from the clients and from the program providers. But what we've done for efficiency here is try to centralize that data through research and analysis and hold that cost down. It is very hard for programs to determine what these costs might be until we really see which programs are in the evaluation side and which are in the assessment side." REPRESENTATIVE BRICE reiterated, for some of these programs, where there are no evaluation standards that are required by federal law, we're going to have to make up those standards and develop that. MR. ANDREWS replied that's correct, however, many of these programs have been training this way and some have them already. He said, "We just have to see how this all sifts out before some programs know what those costs are. We don't think it's a budget-buster, but the programs have a different opinion." REPRESENTATIVE HUDSON asked what is the highest level of administrative costs. Number 0225 MR. ANDREWS said he thinks the highest for federal programs is approximately 20 percent. REPRESENTATIVE HUDSON asked, is it up to 20 percent, is that sort of a norm for programs. MR. ANDREWS said he can't speak specifically for programs. He indicated federal JTPA programs do allow up to 20 percent for that. Adult Basic Education is at 5 percent, so some programs are capped lower. He reiterated that we should allow whatever the federal cap is because the federal government is paying for that to be allowed. CHAIRMAN ROKEBERG referred to a letter from the Mat-Su Private Industry Council. He asked Mr. Andrews to comment on the mandate or the allowance by the Congress in 1992. 1992 congress substantially amended the JTPA requiring additional monitoring and performance standards in recognition of additional administrative costs associated with this monitoring they raised the administration cost limit from 15 to 20 percent. My experience is that with the programs is that 20 percent so much more realistic than 15. MR. ANDREWS stated the Job Training Partnership Act has been reformed a couple of times and primarily because these are investments. In the legislation from Congress, these are workforces - human investments, they have said we need to have an idea of what our performance is and eventually our return on investments. In 1992 they asked the Job Training Partnership Act programs to gather more information in terms of services that folks have received - wages coming in - wages when they're hired after the training treatment, any gains in skills or knowledge or certifications, how are they doing six months later so you could see what the outcomes were. That's part of the reason why JTPA was amended to allow these programs to operate. MR. ANDREWS stated that the other issue is ... the money comes from the federal government and passes through a state agency, and then is passed down to the local level. By the time it's passed down to the local level it's less money for programs and so they have allowed at the local level, a little bit more for administration so that you can operate. He said, "Under this legislation, in my view, is that, for instance the Fairbanks Area Private Industry Council will not be able to operate because if you cap federal funds, they just won't have the money to go out and do the services that they provide in their community. So this is why it's a real concern. No one's resisting the 15 percent on state funding and we're going to be watching that. If this bill passes, we'll certainly be watching it. But the issue at the local level, is this is really going to constrict those federal programs. I think it's simple to take out the word 'lesser'. Everyone will try to achieve maximum efficiency on administration." Number 0254 CHAIRMAN ROKEBERG asked Mr. Andrews if he was suggesting that 15 percent also applies to federal funding. MR. ANDREWS stated it's the lesser of it. He said he thinks the intent was that - they recognized that some programs are held at a lower level and didn't want to see that jump up. Mr. Andrews said, "And we can appreciate that. What we're concerned about are the ones that are allowed more - that is about $9 million that comes before the JTPA program in the state. When you cut that administrative opportunity down at the local level it hurts them. So if you took out the word lesser, we meet the federal standards but we still hold state funds at the cap and the 5 percent the ABE (Adult Basic Education) or Voc. Ed. (vocational education) is already allowed - is all they're allowed." REPRESENTATIVE RYAN indicated they did the same thing in tracking 10 to 12 years ago. When he was on the Prime Ministry Council, it was a new thing, they were going to find out the results and so forth. He noted the Senator said he wants these evaluated and it would be a one-time cost. He asked is this a periodic evaluation, had the council looked at that. MR. ANDREWS replied the JTPA programs, from the time Representative Ryan sat the council up to today, have always tracked those performance measures. They have always been mandated by Congress to gather information. They've been very professional at it and know how to do that so it's not a new thing, it's just that they are trying to say - there's some rethinking here that perhaps some of the performance measures didn't capture the right information that we need to find out what the value is on these programs on the public investment. MR. ANDREWS said evaluating programs to performance measures and accountability measures do cost some money. The assessment side of the isle, which in their view is more like an evaluation light, you're really trying to find out basic research information is less expensive. In their fiscal note, based on the current legislation, they thought that assessment for the 19 programs would be approximately $50,000. Mr. Andrews said they think it could be less if they could work out some of the things in SB 334. ... The value of that is, is that you would have the information during the session to determine whether you want to do anything with those additional programs. Number 0276 REPRESENTATIVE RYAN asked Mr. Andrews if he has prepared a "what is" if he were to get his amendments (indisc.) to lower the fiscal note. MR. ANDREWS replied no, but they are currently working on that with programs and the Office of Management and Budget because they do have a lot of concerns with the assessment fee scenario but they do appreciate the fact that Senate Finance wants to make sure the council and the Department of Labor are paid adequately to do the work and the evaluation. So they are trying to work this out internally and hopefully will have it solved by the time the bill reaches the House Finance Standing Committee. CHAIRMAN ROKEBERG referred to the program's list. He asked if the list was complete. MR. ANDREWS replied they are for the most part a listing of programs that they already provide oversight for. He said, "There are, I believe five additional programs in there. What gets a little confusing is, for instance in section (f), ... Alaska Career Information System, that's really not a program, that's information for career councilors and for students and for adults to choose careers. But it's reflected back over on the first column under the Alaska Occupation Information Coordinating Council. We already provide oversight to this program, but I think it was the intent of Senate Finance to make sure that there was more in-depth monitoring of the program. Again, it's more of an information source and it's already under our oversight. The one thing again that I didn't list there in the new bill is the Alaska Professional Development Institute which is really a professional development for existing workers within the state system, etcetera." CHAIRMAN ROKEBERG asked Mr. Andrews if he wanted to go over the Department of Education and the rest of the amendments on the list. Number 0294 MR. ANDREWS stated they support the Department of Education in their amendments that he has listed. However, there is a great concern that they don't mix apples and oranges, AHRIC does not provide oversight to institutions such as the University of Alaska - there's a Board of Regents, to the state school system - there's a state Board of Education - and our local school boards. He said they want to make it clear that what they are primarily focusing on is where these job training related dollars are spent on clients. He said that's what they want to be evaluating. And some of those services are provided by Alaska Vocational Technical Center and the Kotzebue Technical Center. He added that this brings clarification that helps keep the relationship straight between the state's educational system and what AHRIC's oversight responsibilities are. Amendments for Senate Bill 334 Commissioners as Non-voting Members: Section 1.(a)(2) do not delete. Refers to Commissioners as members Section 2.(c) delete. Refers to Commissioners as not voting members Section 5. Line 16. Delete reference to non-voting members Council Issues: Election of Officers Section 6. Delete whole section. Refers to council officers elected from business & industry representative only. The AHRIC recommends that the language state: The Chair or Vice-Chair must be elected from Business & Industry representatives under AS44.19.620(a)(4). Meetings: Section 7. Delete section (a). The council recommends not limiting council to only 2 meetings annually. Executive Standing Committees: Section 7(b) The council shall establish an executive committee and four permanent standing committees. The council may establish additional standing committees and special committees or subcommittees, not necessarily consisting of council members, to advise and assist the council in carrying out its functions. Delete all other language. (This reflects current law) Section 8. Delete line 22(d) "The assessment and evaluation" ... New language: Committees shall Delete (d)(4), (e), (e)(3) Delete "work with all other committees on"... Add "Develop a....." (e)(4) Delete (f) Delete, (f)(3), (g) This allows 4 standing committees with no name, but assures they perform the duties lined out. This holds the council responsible for assuring compliance, but allow flexibility in committee design to be more effective. Administrative Costs: Section 9. (b)(8). Line 23. Delete [lesser]. Federal programs will not allow the state to restrict approved federal administration costs. The state funded programs and state contribution to funds would be capped at 15 %. Some federal programs only allow 5%. This language would not allow programs to go above the cap. Additional Programs for Evaluation: Section 9. (f)(1). Delete whole clause. Refers to Alaska Professional Development Institute. Section 9. (f)(3). Add in the Department of Education or operated by the department, the non public school portions of the following programs: Programs Added for Assessment: Section 10(g). Add in line 14: of this section, to the extent it does not jeopardize federal funding: Section 10(g)(7). Delete "in the Department of Education: Vocational Rehabilitation client services and special work projects" Section 10(h), line 28. Add The University of Alaska, Alaska Vocational Technical Center, and Kotzebue Technical Center.... Management Assessment Fee: Section 10(m). Add For purposes of this section, annual operating budget (1) means a program's annual budget less any funds which are specified by the state or federal governments as pass through funds to local education agencies. Note: Section 10(j). We would like to keep open the possibility of developing a fiscal note among affected programs using budgeted RSA's under inter-agency agreements in lieu of the .75 of 1% management assessment fee. Program Definitions: Section 10 (should this be Section 11?). Add (3) For purposes of this section, "oversight" refers to directly planning with programs, monitoring, evaluating and assessing programs for performance, and reporting to the Governor, Legislature and the public. Number 0303 MR. ANDREWS referred to Section 10 - programs added for assessment. He said they would like to see a section added to the extent that it does not jeopardize federal funding - to help the Department of [Education, Alaska] Vocational Rehabilitation with client services because that is a great concern of theirs, they already have a Governor's Council for Vocational Rehabilitation. Mr. Andrews said of course, he agrees with them, we don't want to hurt federal funding. They support that. MR. ANDREWS referred to Section 10(h) line 28, where the University of Alaska has come into this legislation. He said they think that's a great sign that they would be involved. The university wants to report the information to the AHRIC, and AHRIC will report that the legislature. It will basically be based on the model set up by the Alaska Department of Labor, Research and Analysis - they work in cooperation. Mr. Andrews stated, "We feel that it's important that Alaska Vocational Technical Center and the Kotzebue Technical Center have the same ability because there's a difference between people who are enrolling in programs because they want to be there and they want to go into a career area. And there are those that are being told as part of their case management that we have some money for you, we think you should go to this school, and we want to monitor how you do. So we think that it's only fair that any institution is able to provide that information as long as they set up the methodology and that reduces the ability to duplicate that effort and it does still provide the information for the legislature and for the council." Number 0313 MR. ANDREWS addressed the management assessment fee. He said, "This is another area that we're just trying to clarify what right now is sort of ambiguous to programs is when we talked about numbers like $64 million and $90 million. That's a big chunk of money to assess when only let's say parts of that are really involved in the programs that we're talking about here. So we're trying to clarify, and again, trying to reduce the, let's say the damaged to programs at times of shrinking budgets and..." CHAIRMAN ROKEBERG interjected, "How much are the pass through funds, do you have any idea?" MR. ANDREWS deferred to the Department of Education. MR. ANDREWS noted they are trying to work this out internally so that they can come up with a fiscal note rather than an assessment fee with assurances that the Department of Labor and the council will be funded to perform the job that the legislature has asked the people to do under this. He concluded that the legislature might consider the council's issues about how it operates and how it can be effective -- the additional work that is involved with the addition of programs. Mr. Andrews stressed that no one opposes the measures for accountability and performance, everybody is agreement that that's the right way to go. Number 0329 MIKE McMULLEN, Personnel Manager, Division of Personnel, Department of Administration, appeared before the committee to testify on SB 334, and speaking for the Alaska Professional Development Institute (APDI) division which is a function of his division. CHAIRMAN ROKEBERG asked Mr. McMullen why APDI should be deleted. MR. McMULLEN explained the APDI is fundamentally different from the other kinds of programs listed in subsection (f) of the bill. The Alaska Professional Development Institute is primarily aimed at maintaining and upgrading the skills of state employees. He said, "We are more akin to training programs that you find at any large company or organization such as BP (British Petroleum) ... or Bank of America, or some place else. We're there to train primarily our own people for the needs of, us as an employer, we're not there to provide training in reading, writing, mathematic skills for workforce-readiness. We're not there for job skills of cleanliness, promptness, those sorts of things to work-readiness that other programs are providing. We're not there retraining people facing layoffs to get them to be tooled for other jobs with other employers. We teach classes that are in some cases so unique to the state situation that no one else would be interested, including things like teaching how to use AKSAS (Alaska State Accounting System) which is the state's accounting system, "GENEVA" which is the reporting stuff on the state's system, it's all just unique - state. If there's any program in the bill that we're most akin too, is like the Correctional Academy. Correctional Academy is training state employees, who are (indisc.) correctional officers in their basic training. We are training state employees, not in their initial training, but in upgrading primarily. And I guess if we can't convince you all to take us out of the bill entirely, moving us from section (f) to section (g) makes a whole lot more sense. We're not opposed to being assessed, I think if we are assessed, I will say that AHRIC doesn't need to review us. Alaska Human Resource Investment Council has themselves, in the private industry orientation, indicated not interested in supervisory managing this program. And I think those are all good reasons to take us out of the bill in an outright fashion." CHAIRMAN ROKEBERG mentioned the technical suggestions. Number 0353 MR. McMULLEN referred the amendment on commissioners. He said there are more sections implicated then identified. Sections 1-5 all have been changed because of the changing commissioners and so, if they're reversing them and giving them the voting membership, there's some change in each of those sections that would need to be corrected. CHAIRMAN ROKEBERG requested that information be provided to the committee members. MR. McMULLEN continued, "...If we were going to remain in, if I sort of had a sense of where the committee might go, I might be able to avoid that. If AHRIC is going to supervise the APDI, the Commissioner of Administration should have an equal seat on AHRIC with other commissions who have programs being managed by AHRIC. So, if APDI is to stay in the Commissioner of Administration should be added to the list of commissioners who have seats. The funding mechanism definitely needs some work. Our concern is that the APDI budget is in interagency receipts primarily 5/6 of it, 1/6 is in interagency program receipts. In both cases the receipts authorized are ahead of what we're actually receiving and to be assessed on the full budget or authorization is going to be a bigger hit to our budget than budget on just what we actually get in revenues and from which we would be able to pay the fee." CHAIRMAN ROKEBERG asked for a brief at ease at 4:08 p.m. TAPE 98-48, SIDE A CHAIRMAN ROKEBERG called the meeting back to order at 4:09 p.m. [TESTIMONY BEGINS AT 0005] Number 0005 BARBARA THOMPSON, Director, Teaching and Learning Support, Department of Education, said, "...In school to work are released in grants. In Adult Basic Education, at least 97 percent of the funds are released in grants, and in Vocational Education, the federal Vocational Education funds, at least 82 percent are released in direct grants to educational entities." CHAIRMAN ROKEBERG asked if 100 percent of those amounts would be subject to the assessment. MS. THOMPSON responded, "We're not quite sure what it means, but we thought that the language that we suggested would be a clarifying attempt at defining what operating budget really means." She said they did not believe that it was the intent of the bill, or the assessment, to assess programs and actually eat into the costs of the funds that are currently going out to service providers. CHAIRMAN ROKEBERG referred to Section 9, line 25. He read: (3) in the Department of Education or operated by the department: CHAIRMAN ROKEBERG asked Ms. Thompson if she wanted to add the "non public school portions of the following programs," - with the intention, what would that do. MS. THOMPSON said the wanted to clearly show that the K-12 portions of School to Work, or Vocational Education, were not to be evaluated using performance measures that relate to specific employment training or job placement because they're talking about public school programs with public school students. CHAIRMAN ROKEBERG referred to Section 10, subsection(g)(7), delete: in the Department of Education: vocational rehabilitation client services and special work projects; CHAIRMAN ROKEBERG asked what's the rationale behind that. Number 0025 MS. THOMPSON said, "We do believe, by moving Voc. Rehab. to section (g), that their funding is not necessarily jeopardized any further as Senator Torgerson said earlier. If they're going to be assessed, and if they were ever then assessed and moved to section (f), their funding would be jeopardized. So we don't see why they should be assessed if they could never be moved to the other section." CHAIRMAN ROKEBERG indicated it was fear. He asked is the University of Alaska-Anchorage that (indisc.) as the Alaska Voc. Tech., or is that the University of Alaska-Anchorage amendment. MS. THOMPSON asked which. CHAIRMAN ROKEBERG acknowledged Representative Ryan. REPRESENTATIVE RYAN referred to Ms. Thompson's statement, "public school is difficult to try to assess it on their accomplishments." He noted the King Career Center in his district brags on how their programs are structured to put these kids to work and they're doing a great job. He asked how are they different from what she described because they're a public school. MS. THOMPSON replied the King Career Center does have very special aspects to it that would allow some of the performance measures to apply. Many of the programs though, in Vocational Education in general in schools, are not job-specific training - they would not necessarily lead to immediate employment. She said the King Career Center is a wonderful example of the kind of vocational education we want to see in the state. But the performance measures, as they stand, would not render any truly valuable information at this point in time for a lot of the K-12 programs. CHAIRMAN ROKEBERG referred to subsection (G), Alaska Vocational Technical Center, page 9, line 1. He asked, "Is that under the auspices of the University of Alaska and the Kotzebue Center. You wanted those - I take it, deleted from (g) and moved to (h), is that correct. That's what the Andrews amendment (indisc.)." Number 0050 MR. ANDREWS directed the committee member's attention to Section 10, subsection (h), page 10, lines 28-31. He said, "I think you're referring to is we have offered that ... where the University of Alaska will be performing an evaluation and reporting to us. We feel that it's fair that the Alaska Vocational Technical Center and the Kotzebue Technical Centers are allowed to do that as well because they are schools - they are institutions, but what we want to make sure is that we get the information. This relates to reducing the cost to those schools and what we're mostly concerned about is the right information." CHAIRMAN ROKEBERG said as he understands it, they would stay in section (f) and would also be added to (h). MR. ANDREWS replied no, we're not saying move those. What we're saying is, where the university has language, we think that those two programs should be included in the university's language. CHAIRMAN ROKEBERG reiterated they would stay in section (f) and would also be added to (h). MR. ANDREWS replied yes, they're listed there in terms of - allowed to do their evaluations and report to them in the second part. He noted they are not asking to move the programs. REPRESENTATIVE HUDSON asked if the Alaska Vocational Technical Center is the Seward Skill Center. MS. THOMPSON replied yes it is. CHAIRMAN ROKEBERG commented that it's under the Department of Education. He noted that it's not his intention to move the bill today. He indicated they could adopt an amendment. CHAIRMAN ROKEBERG referred to the AHRIC amendments. He asked what's the Senate's position on this. Number 0083 KRYSTAL MURPHY, Legislative Administrative Assistant to Senator Torgerson, Alaska State Legislature appeared before the committee on behalf of Senator Torgerson. She said, "Basically, I think Senator Torgerson's main heartburn is that this is a very large group to meet - 26 members trying to come up and actually have a consensus. And I think it was also our thought that right now an executive committee exists within the council that does a lot of meeting and they bring policy-decisions to the council as a whole where decisions are made. By giving a lot of flexibility within this legislation for that committee to continue to meet and bring recommendations to the full committee twice a year was sufficient. And so we didn't think it was necessary to expend unnecessary funds for them to meet more than twice a year." REPRESENTATIVE HUDSON said he presumed this committee would be able to meet by telephone in some instances and even written communications. MS. MURPHY agreed. CHAIRMAN ROKEBERG stated, "But it seems to me that there is an executive committee actually running things, and therefore it may not be able to really represent the cross-section that the original council, and even this bill - you know, reinforce it so that - from a policy standpoint (indisc.). I appreciate the cost, but we've heard testimony that it's not a major thing and that also they could use telecommunication so I'm not (indisc.). You might ask how important it is if we moved it up to say three or something." Number 0099 KRAG JOHNSEN, Administrative Assistant to Senator Drue Pearce, Alaska State Legislature appeared before the committee on behalf of Senator Pearce and the Senate Finance Committee. He said he believes the intent of the legislation was to bring the executive committee to an empowered executive committee. They would do a lot of the daily business of the full committee and that's also where the changes to the private industry took place. We put more private industry folks on there and they guide that executive committee. CHAIRMAN ROKEBERG noted, even in the private sector, most corporations or groups have quarterly meetings to set policy and let the executive carry that out. REPRESENTATIVE COWDERY said, as he understands it, anything major would have to be taken to the full committee. MR. JOHNSEN deferred to Mr. Andrews. MR. ANDREWS responded, currently this is how the council operates. He noted they have an executive committee that meets quite regularly, but all policy decisions or actions must be then given to the council. They must be informed of the actions and those issues that need to be voted upon, is held for their meetings. He mentioned they can meet with video conferences and telephonically to hold costs down. He noted that this does create sort of a vacuum in terms of the executive committee leadership that doesn't extend into, for example input from the University of Alaska or input from some other program directors. Mr. Andrews said, "That may be valuable, but what we're doing now is we're informing everybody of our decisions and then we're voting on those things that are important and are functioning pretty well as is." REPRESENTATIVE COWDERY asked if there are a lot of policy changes. Number 0125 MR. ANDREWS replied, "No, we aren't setting a lot of policy but there are a lot of responsibilities to do direct planning with programs, to review programs, again we have 17 programs under us and so it's not -- we can hold some of our policy decisions for let's say semiannual meetings. What we lose in the meantime though is that internal information and exchange of information between council members. But when we do have to make a decision we can call a special - these are all public meetings - we can call a special meeting and handle it by teleconference when it's something very important." CHAIRMAN ROKEBERG indicated this would restrict the council the way it's drafted. MR. ANDREWS replied yes it would. He said he didn't think the council would disagree if it only had to meet twice a year ... except for the business itself, particularly right now because it takes more than that. Mr. Andrews stated, "We just feel that, to set in concrete, two meetings a year really may drop some council members' commitment to it, some involvement in it when they're only getting together twice a year." REPRESENTATIVE RYAN mentioned one of the criticisms he heard a couple years ago, when it was created, was that 25 members make it unwieldy, it was very difficult for them to accomplish (indisc.-- noise) but that work has been done and it's getting better. He asked how did it wind up that there had to be 25 members. MR. ANDREWS said, "Three councils, with 39 people, were combined to get to 26 people. And then there are the federal requirements. What we've done, and we agree within the bill, is allow the cross- member representation, so that really we can function with about 21 members. That's a savings. People can represent not only the private sector but also other things." Number 0148 CHAIRMAN ROKEBERG mentioned he was on the subcommittee and believes Representative Brice was also at the birth of AHRIC. He asked Ms. Murphy, "Did the Senate, in its deliberations, take up this problem of perhaps special meeting calling and so forth or any ability -- and some flexibility at all. Did they discuss that?" MS. MURPHY replied, at this point we have not but I can... CHAIRMAN ROKEBERG interjected, "I mean, when their deliberations -- did you when you were drafting the bill consider that." MS. MURPHY replied, no we did not. CHAIRMAN ROKEBERG suggested Ms. Murphy consider that. He said, "The administrative cost -- the recommendation of the lesser of, because of the federal caps being variable, and the fact that some may be 5 and some may be 20 percent, is that true in terms of what you're able to find out. I mean that's a verifiable thing." MS. MURPHY responded in the affirmative. CHAIRMAN ROKEBERG asked if it was the Senate's desire to put a cap on all funding - administrative cost levels - why they chose that one. Number 0157 MR. JOHNSEN said, "Maybe I'm missing something on this amendment, but the 15 percent - those are across the board for all federal and state funds. So the way JTPA is set up now, (indisc.) goes up to 20 percent administrative cap. What this would do in essence, and discussions have been between Senator Torgerson and the department, would bring that down to 15 percent which is the direction that I believe - when JTPA had reauthorization - that we were looking at before anyway. So as far as the federal programs that allow 5 percent and 10 percent, we don't have any control over bringing that administrative rate up. That will still stand at 5 and 10 percent." CHAIRMAN ROKEBERG referred to a letter from Lawrence Hartig, Vice- Chair, Anchorage/Mat-Su Private Industry Council. He noted prior testimony indicated that Fairbanks may have a higher proportional need for that. He asked Mr. Johnsen if he took that into account. MR. JOHNSEN said he believes Senator Torgerson talked with the Department of Labor and maybe they can speak to that. They did take that into account, especially with the JTPA, the 15 to 20 percent and with these new requirements and assessment fees - how that would affect their budget. CHAIRMAN ROKEBERG asked Mr. Andrews how much of the allowable -- is that just the JTPA that has the 20 percent. Number 0172 MR. ANDREWS stated the only one he knows of that exceeds the 15 percent is the JTPA. CHAIRMAN ROKEBERG asked how much money is that on the annual budget. MR. ANDREWS replied he doesn't know what that is. He noted there's approximately $9 million that comes in for the programs, 20 percent of that is $1.8 million. CHAIRMAN ROKEBERG referred to the Alaska Professional Development Institute. He said he doesn't know why it's in the bill. MR. JOHNSEN said he thinks the intent of the legislation was to get a broad scope of all training programs in the state. When they looked at the oversight, in which programs the AHRIC should have oversight on, automatically the committee and Senator Torgerson felt that Professional Development definitely falls into the category of (indisc.--noise). CHAIRMAN ROKEBERG interjected, they're guilty by their title. MR. JOHNSEN continued, of needing oversight and performance measures. CHAIRMAN ROKEBERG asked Mr. Johnsen if he was aware that the funds were all interagency funds. MR. JOHNSEN noted they were aware of that. CHAIRMAN ROKEBERG commented, in other words this could come out of the Office of the Governor. He added that moving subsection (g) would be appropriate. MR. JOHNSEN mentioned it has been brought to their attention and it could be brought back to Senator Torgerson and the committee to get their views. CHAIRMAN ROKEBERG said, "From my understanding of it - the program, it seems to make more sense. He referred to Section 10(g), line 14, which adds the following language: to the extent it does not to jeopardize federal funding: CHAIRMAN ROKEBERG asked Mr. Johnsen if he has a problem with that. He indicated it doesn't seem to be negative. Number 0193 MS. MURPHY stated that she didn't think they wouldn't have any problem with adding that language to clarify because it's not their intent to jeopardize federal funding. However, they would object to the second section of deleting DEVR (Department of Education: Vocational Rehabilitation) totally from this legislation. CHAIRMAN ROKEBERG said he wasn't sure he entirely understands Section 10(h,) line 28, which adds: The University of Alaska, Alaska Vocational Technical Center, and Kotzebue Technical Center MS. MURPHY commented that she doesn't understand that either. CHAIRMAN ROKEBERG asked Mr. Andrews to address that. MR. ANDREWS reiterated the Department of Education and others have agreed with the amendments. He said it can stay in the section that would be assessed. Mr. Andrews explained what they are saying is that the institutions already perform an evaluation for their oversight boards, like Board of Regents, like the Advisory Council for AV Tech. and the school district in Kotzebue. He further explained as long as they gather the information, that's required under subsection (f), and report that to them that they should be allowed to do that. REPRESENTATIVE RYAN said, I wonder if they have the same area of expertise that the university would have as far as their evaluation ability. MR. ANDREWS noted that they would have to be evaluated in (f) anyway. REPRESENTATIVE RYAN asked if they can do the job as well as the University of Alaska. MR. ANDREWS commented that he's not sure he understands. Number 0213 REPRESENTATIVE BRICE referred to a comment that was made earlier making this cover as broad a spectrum (indisc.) state training programs as possible. He asked if they looked into the Social Worker Academy, through the Department of Health and Social Services, Foster Care Training, those types of... CHAIRMAN ROKEBERG commented, you mean we missed some more. REPRESENTATIVE BRICE stated, "I guess my question is, is we've got all this other stuff, and you're talking about training. I was wondering - and we're talking about inmate programs and Corrections. I mean, my question was, you guys were the ones that said it was supposed to be comprehensive. And I'm wondering what about all the various training within [Department of] Health and Social Services, what their thoughts were." MR. JOHNSEN explained our Legislative Finance Division went through and pulled every component related to employment training and that was put into this bill. REPRESENTATIVE BRICE mentioned they missed a couple. MR. JOHNSEN reiterated, they missed a couple. MR. ANDREWS said, "On that section, where there's confusion, I just spoke with the Department of Education and they don't necessarily see the need to have that - Section 10(h), line 28, included there, so if it is confusing, drop that." Number 0229 CHAIRMAN ROKEBERG referred to the Management Assessment Fee. He said, "My last question on the management assessment fees, about the pass through - apparently that's pretty substantial amount of money and I guess you earlier answered that. The why not was that that is part the whole program and you programmed that into your fiscal notes and the amount of dollars needed to do the evaluations and assessments, is that correct." MS. MURPHY replied, "Correct, if we didn't count these pass through monies, the amount of money that would be received from DOE (Department of Education) would probably be next to nothing. And probably could not justify the amount of the evaluation that would have to be done." CHAIRMAN ROKEBERG said the rationale is that these particular programs need an evaluation assessment just like everything else does. MS. MURPHY responded, "Correct, it was our intent by assessing this same fee to all programs that we have an adequate amount of money to do what was needed in order to do the purview needed on all of these programs. But, by eliminating pass through funds, I don't think it would - it would not be enough money." MR. JOHNSEN reiterated we are working with our Legislative Finance Division, with the Office of Management and Budget, and with Mr. Andrews of AHRIC to look at some of these assessment fees and to figure out the best structure. He said he thinks the goal and the intent is to get to an AHRIC that will have the funding necessary to get the job done that we put into legislation. However we get there I think is... CHAIRMAN ROKEBERG said the bill has one more stop, doesn't it. MS. MURPHY replied House Finance Committee. Number 0245 REPRESENTATIVE RYAN stated, "On this assessment, the Senator said there was some - perhaps going to take one time and others would be continuing because this was an ongoing (indisc.--paper noise) a dynamic thing. What criteria - what are you going to do once you get back the assessments, what do you use for a benchmark to say these guys are doing a job, or perhaps need improvement, or however. You're going to do this assessment, get this work back, how are we going to quantify it." MR. JOHNSEN noted that report would be presented to the legislature and to the governor. He said he believes it would be your job to look at what benchmarks, you would have the data, you would have the numbers, and then to set policy from there. But what would be the criterion of the various performance measures where that performance is (indisc.)... REPRESENTATIVE RYAN interjected, what you're basically trying to do is implement a quality control, a quality insurance program. And having the information is only the first step, you should have a program that would be ongoing they could (indisc.--fading). MS. MURPHY agreed. CHAIRMAN ROKEBERG referred to the program definition. He indicated that it doesn't seem to be bad unless there is some hidden meaning. MR. JOHNSEN said it's just a bit redundant. He said he believes that's what the legislation does. If you look at it, it monitors, it evaluates and assesses the programs that are listed throughout this legislation and that's... CHAIRMAN ROKEBERG interjected, is there a reporting requirement. MR. JOHNSEN replied yes. So further defining oversight, if you'd... CHAIRMAN ROKEBERG interjected, we don't want to add more words to our heavy laws. He referred to Representative Ryan's remarks regarding membership and said he wasn't sure that business, industry, and private sector mix. He asked Mr. Andrews, "Is there some fluidity there, you could have one or four or something of the private sector or business people so that it accounts for some turn over, is that right." Number 0264 MR. ANDREWS replied, "We have the majority, or 50 percent of the council now is from the private sector which is non-governmental employees. There is a specific designation inside of that group that is business and industry representatives, and that delineates between community-based organizations organizing with - and others. There is a revolving - in law there's the ability for, as members leave others come on and fill those designated seats, and we have the turnover. But, just for clarification, the council has struggled with this issue, I mean what's private sector and what's business and industry and we've been trying to work out that tension at the council level. The council does not oppose private sector leadership of the council. That's not the case, it's just that they feel that we should, as a council, be allowed some flexibility that not ... because of what you'll have, is every elected official eventually will be based from business and industry, from a segment of only 4 representatives on the council and they feel that that may reduce the ability of the council to find a leadership and the commitment that it needs to improve. They agree that one should be from business and industry, absolutely, and the other from private sector." CHAIRMAN ROKEBERG stated, "I think there's been a controversy before, but what private sector and so forth means because there's nonprofits that tend to be quasi bureaucratic or -- I don't want to mean (indisc.) but they come from that rather than actual and private business here so. Can you tell us presently on existing council, just as a baseline here, of those private sector industry people how many come from nonprofit organizations?" MR. ANDREWS indicated that at least half come from nonprofit organizations. CHAIRMAN ROKEBERG said, so if we're going to make any distinctions here we should probably make it between private - nonprofit and profit - (indisc.) to the other things. He asked Representative Ryan if this makes sense. REPRESENTATIVE RYAN replied a portion of this amendment says we delete all other language, starts out... Number 0281 CHAIRMAN ROKEBERG interjected, we get to make our own amendments. REPRESENTATIVE RYAN suggested one of them would be industry and the other could be a private, not necessarily reflecting industry - similar to what Mr. Andrews was talking about. CHAIRMAN ROKEBERG mentioned it kind of goes along with the distinction he was making about private and nonprofit. REPRESENTATIVE RYAN said he was originally thinking of industry being very large corporations versus the average guy that owns a shoe store or a gas station - a small business guy. And that we should have one of each represented so that both sectors would have some input - so you would have a different perspective and not get it loaded up with two small business guys or two large business guys being the chair and the vice-chair. CHAIRMAN ROKEBERG asked Representative Ryan if he has a term that he would like to suggest. REPRESENTATIVE RYAN indicated Senator Torgerson didn't seem to object right on the surface. He said he would be more comfortable to let the Senator mull that over for a day or so. Number 0292 REPRESENTATIVE BRICE suggested a potential amendment might be: shall elect either a chair or a vice-chair from the representatives of business and industry REPRESENTATIVE BRICE explained that would give that flexibility that one or the other can. He said we have also enumerated Alaska Native organizations, community-based organizations, and organized labor. There's a lot of other folks out there who are not necessarily governmental, who might fit well to provide a very symbiotic chair/vice-chair relationship there. REPRESENTATIVE COWDERY asked, "Is organized nonprofit or profit (Indisc.) profits." CHAIRMAN ROKEBERG interjected, "How about nongovernmental. I mean you could both of them could be -it's right here, this bill reads basically business industry from both of them." REPRESENTATIVE BRICE commented, that's right. CHAIRMAN ROKEBERG suggested excluding "government." Number 0303 MR. JOHNSEN pointed out that was looked at in the original legislation. He said, "What we were trying to do was provide the leadership for the committee to be from business and industry. I think that was Senator Torgerson's direction was that business and industry lead this council. And so you take out the business and industry, those key words, like on page 2, line 5, that's the four people were talking about, the four representatives of business and industry. Those are the ones that we want leading the council because that's where the rubber meets the road, those are the people who are providing the jobs to the people who were trained." (4) [(5)] four representatives of business and industry, with at least one representative from the private industry councils appointed under 29 U.S.C. 1512 and subject to reconstitution under 29 U.S.C. 1515; CHAIRMAN ROKEBERG said he doesn't have a problem with that. However, he is not sure that's the thrust that Representative Ryan was getting at. REPRESENTATIVE RYAN commented we have business and industry. He said he thought we would have small business and big business so you could have a perspective. REPRESENTATIVE BRICE said, when we take a look at the standing committees -- let's make the assumption we've got four business and industry appointees here. Two of them take up the duties of chair and vice-chair that leaves two others to fulfill the roles on the permanent standing committees of assessment and evaluation, policy and planning, employment placement and workforce readiness. Representative Brice stated, "Three of those four standing committees, Mr. Chair, I would suggest - would have dramatic need of having been business and industry representation." CHAIRMAN ROKEBERG suggested increasing the number, from four-up, and decreasing the others. REPRESENTATIVE BRICE said we could, or just increase the four-up. CHAIRMAN ROKEBERG commented we had this discussion three years ago didn't we. REPRESENTATIVE BRICE agreed. MR. ANDREWS made a distinction. He said this is what they've struggled with at the council. For example, in Bethel the largest employer is Yukon-Kuskowim Health Corporation which represents the medical industry. It's also a not-for-profit. He mentioned they deal with this all the time. CHAIRMAN ROKEBERG said, "One thing I would like to see is that - a for group of business and industry, stipulate profit for profit or something, not just..." REPRESENTATIVE RYAN mentioned the Providence Health System is a not-for-profit and it's the second or third largest employer in the state. Number 0321 MR. JOHNSEN suggested Mr. Andrews make a clarification. He said, "I think that those four people are - when you said that half of the representatives on the council, you meant the other folks too. Those four are true business and industry now, and on the AHRIC is that correct. I mean for profit businessmen." CHAIRMAN ROKEBERG commented, "Well you just contradicted yourself, you said the health care industry, they represent that." MR. ANDREWS pointed out, in terms of leadership at the council level, they are struggling with that. He presented another example saying, "Right now we have the oil industry represented - actually now something happened a person changed jobs and now we have two oil industry representatives, and we have the Anchorage Telephone Utility which is a government owned industry-based for profit company." CHAIRMAN ROKEBERG commented, not too long though. REPRESENTATIVE BRICE added, it is now. MR. ANDREWS continued, "So ... this is the attention - when we start to ask this when we have, let's say some real qualified leadership from ATU (Alaska Telephone Utility). If we say not a government-based corporation then we spend our three hours doing what we're doing here." CHAIRMAN ROKEBERG indicated this would be a real contribution in this bill if some of these definitions are a little clearer. It would actually help the appointment and the direction because this is the same discussion we had three years ago when it was put together and... REPRESENTATIVE BRICE added, it was a fight. CHAIRMAN ROKEBERG stated, all you've done is change the numbers, you haven't changed the definitions. He indicated that might help and commented on Representative Ryan's and his points. He suggested Mr. Andrews might go back to the Ouija board because we want to move this bill on Monday. MR. JOHNSEN noted the original version had 8 people on the council. He reiterated that they've tried to make some changes. He said it's difficult to come up with those definitions and it's difficult to take people off the board with the federal requirements and it's... CHAIRMAN ROKEBERG interjected, and if you get down to one, it's hard to take a half a person. He stated, "The federal requirements perception, the -- in regard to the -- oh, the makeup of the council. The federal requirements, the makeup of the council." MS. MURPHY pointed out JTPA has set a lot of the standards as far as the makeup of this council. CHAIRMAN ROKEBERG asked Ms. Murphy, "Will you provide the committee with." MS. MURPHY replied yes. [SB 334 WAS HEARD AND HELD] ADJOURNMENT Number 0343 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing Committee at 5:49 p.m.