Legislature(2017 - 2018)BARNES 124

03/10/2017 03:15 PM House LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
<Bill Hearing Canceled>
<Pending Referral>
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 2(MLV) Out of Committee
-- Public Testimony --
Moved HB 108 Out of Committee
-- Public Testimony --
Moved HB 141 Out of Committee
-- Public Testimony --
           HB 141-AK WORKFORCE INVESTMENT BOARD;FUNDS                                                                       
3:28:50 PM                                                                                                                    
CHAIR KITO  announced that  the next order  of business  would be                                                               
HOUSE BILL  NO. 141, "An  Act relating to allocations  of funding                                                               
for the Alaska  Workforce Investment Board; and  providing for an                                                               
effective date."                                                                                                                
3:29:29 PM                                                                                                                    
JON  DUFENDACH,  Treasurer,  Partners   for  Progress  in  Delta,                                                               
referred  to a  2/6/17 letter  directed to  Governor Bill  Walker                                                               
from  Commissioner  Heidi  Drygas, with  regard  to  non-resident                                                               
employment, and he read as follows:                                                                                             
     We know it's  not enough to encourage  Alaska hire only                                                                    
     on  state projects,  but we  have  looked for  creative                                                                    
     solutions    to    address    the   high    rates    of                                                                    
     residential/non-residential  hire in  other industries.                                                                    
     Administrative Order 278 is part  of that effort and it                                                                    
     incorporates  apprenticeship  targets  in oil  and  gas                                                                    
     projects.   Research shows  that apprenticeships  are a                                                                    
     powerful  tool  to  encourage  Alaska  hire  rates,  in                                                                    
     addition  to their  workforce development  benefits for                                                                    
MR. DUFENDACH  noted that  employment rates in  the area  of non-                                                               
residency  are  over 40  percent  in  the  oil industry,  and  25                                                               
percent in the  Operating Engineers Union.  He  said, "We operate                                                               
a  construction trade  academy here  in  Delta" in  an effort  to                                                               
train Alaskans and  offer access to jobs in  the construction and                                                               
oil  industries.   He offered  appreciation that  the Delta  Mine                                                               
Training Center  is now part  of the University of  Alaska system                                                               
and is  working with Partners  for Progress  in Delta.   He urged                                                               
the  committee  to consider  an  extension  of the  UA  Technical                                                               
Vocational  Education Program  (TVEP) and  to continue  providing                                                               
training for Alaska's young resident workers.                                                                                   
3:32:18 PM                                                                                                                    
DON ETHERIDGE,  Lobbyist, Alaska American Federation  of Laborers                                                               
-  Congress of  Industrial Organizations  (Alaska AFL-CIO),  said                                                               
the  Alaska  American  Federation   of  Laborers  -  Congress  of                                                               
Industrial Organizations  (Alaska AFL-CIO)  supports HB  141, and                                                               
advised  that  the  organization  funds its  own  training.    He                                                               
commented that when this program  first began, he worked with the                                                               
Alaska Works Partnership Program,  AFL-CIO, and several people to                                                               
put this  program "into business" and  they would like to  see it                                                               
continue.  He  remarked that the only benefit "we  get out of it"                                                               
is we  go out and  cherry pick some of  the top students  for its                                                               
apprenticeship  programs  which  has  furthered  these  students'                                                               
careers over  the years.   The main issue  is local hire,  and if                                                               
Alaska does not  have the people trained to take  the oil and gas                                                               
and  construction jobs,  then there  is no  argument when  people                                                               
start coming  in from  outside to  take the jobs.   The  goal, he                                                               
offered,  is to  train Alaskans  for these  jobs, and  the Alaska                                                               
AFL-CIO is in support of these programs.                                                                                        
3:33:56 PM                                                                                                                    
REPRESENTATIVE BIRCH  offered concern  that the dollars  come out                                                               
of  the unemployment  insurance slice  of an  existing employee's                                                               
pay, such  that a piece of  every hour of their  paycheck goes to                                                               
unemployment insurance.   He commented that it  appears these are                                                               
being syphoned off or reallocated  to this program, and asked how                                                               
that  benefits the  individual  whose paycheck  it  comes out  of                                                               
ostensibly for unemployment insurance.                                                                                          
MR. ETHERIDGE  suggested that  when looking at  the issue  as per                                                               
person, "it  doesn't."  Although,  he explained, it is  still not                                                               
causing  harm either  because the  program  is solvent  and if  a                                                               
person is  out of  work they  can draw  unemployment funds.   His                                                               
view, he  advised, is that  it saves  the overall fund  money, to                                                               
leave it  out there  for other  people to  use without  having to                                                               
increase it, if  the unemployed people get enough  training to go                                                               
to work.   Also,  he explained,  in the event  the person  has an                                                               
opportunity to go  to work and not draw  unemployment, that saves                                                               
money, and  "they" don't have to  increase the rates later  on in                                                               
order to make the program solvent.                                                                                              
3:35:48 PM                                                                                                                    
REPRESENTATIVE BIRCH pointed  out that it appears  $12 million is                                                               
coming out  of the  paychecks of  working Alaskans  identified as                                                               
unemployment  insurance.    Therefore,  he said,  there's  a  $12                                                               
million slice of unemployment insurance  basically going to train                                                               
someone else,  and he said,  "we're trying to figure  out whether                                                               
that could  be increased, decreased, put  into vocational schools                                                               
in the school  district, and so forth."  It  appears, he said, to                                                               
not be a  truthful representation to the  working individual when                                                               
they think they  are paying unemployment insurance  and, in fact,                                                               
$12 million  is being redirected.   He pointed out that  there is                                                               
no question  it is for a  worthy purpose, but money  is taken out                                                               
of a  working person's pocket  to train someone else  to possibly                                                               
come in and take their job, for instance.                                                                                       
3:36:50 PM                                                                                                                    
MR.  ETHERIDGE  responded  that most  of  the  individuals  going                                                               
through [TVEP programs] have paid  into the funds and are reusing                                                               
some of their own  funds in many cases.  He  commented that it is                                                               
probably  not absolutely  fair that  it  only goes  to these  few                                                               
programs,  but those  are the  programs  "we picked  out when  we                                                               
first started it."   Initially, he said, there were  only four to                                                               
five programs and with each  allocation "the pie got smaller" for                                                               
each  group.   Speaking  as  someone  who has  paid  unemployment                                                               
insurance all of his life, he  said that he does not begrudge any                                                               
of that money  training someone else to further  their career and                                                               
enhance local hire in Alaska.   He stressed that if the state has                                                               
to spend  a bit of  money to train  these people so  Alaskans are                                                               
able to get those jobs, "I think we need to do it."                                                                             
3:38:42 PM                                                                                                                    
GRETA SCHUERCH, Liaison, Governmental  and External Affairs, NANA                                                               
Regional Corporation,  advised that  the UA  Technical Vocational                                                               
Education  Program  (TVEP) has  served  as  an essential  funding                                                               
source to the  Alaska Technical Center based in  Kotzebue, and it                                                               
serves as  a catalyst for  individuals to develop  various career                                                               
tracks.    The   Alaska  Technical  Center  (ATC)   is  an  adult                                                               
vocational and technical school  for all Alaskans, she described,                                                               
which  has been  an essential  player in  the advancement  of the                                                               
collective workforce development efforts  within the region.  She                                                               
commented  that  it benefits  employers,  such  as the  Northwest                                                               
Arctic Borough  School District,  NANA Regional  Corporation, and                                                               
the Red  Dog Mine through  core programs, and it  includes tracks                                                               
and business  technology, health occupations,  construction trade                                                               
technology,  culinary  arts,  process technology,  and  offers  a                                                               
variety of  short courses  meeting the  needs of  local employers                                                               
and business  partners.   In 2016,  she offered,  696 individuals                                                               
graduated, and  81 percent of  whom are currently employed.   The                                                               
TVEP  has had  a tremendous  positive impact  statewide, and  she                                                               
pointed to  the Youth Learning  Center in Bethel, which  serves a                                                               
key role  in the  dental health  aide therapy  program benefiting                                                               
all  areas of  the  state through  its  rigorous dental  training                                                               
program,  and whose  graduates provide  mid-level dental  care in                                                               
small  rural communities  throughout Alaska.   The  NANA Regional                                                               
Corporation shareholders also benefit  from other programs funded                                                               
through TVEP  at the  University of  Alaska, the  Galena Interior                                                               
Learning  Academy, Alaska  Vocational Technical  Center, and  the                                                               
INANA Regional Corporation appreciates                                                                                          
the   legislature's  continued   support  for   secondary,  post-                                                               
secondary, and adult education that  prepares Alaskans for future                                                               
jobs in Alaska, she said.                                                                                                       
3:41:28 PM                                                                                                                    
CHAIR KITO, after  ascertaining no one wished  to testify, closed                                                               
public testimony on HB 141.                                                                                                     
3:42:02 PM                                                                                                                    
PALOMA   HARBOUR,   Director,   Central   Office,   Division   of                                                               
Administrative Services, said she was available for questions.                                                                  
REPRESENTATIVE  SULLIVAN-LEONARD asked  Ms.  Harbour whether  the                                                               
funding dispersed from 2000 to present was $142.5 million.                                                                      
MS. HARBOUR responded  that the cumulative total  through FY 2017                                                               
was $142.5 million.                                                                                                             
3:42:51 PM                                                                                                                    
REPRESENTATIVE SULLIVAN-LEONARD asked the  amount of dollars, per                                                               
employee, which has been paid into the system from 2000 to 2016.                                                                
MS.  HARBOUR advised  that she  did not  have that  analysis with                                                               
her,  but the  Research and  Analysis Section  of the  department                                                               
calculates  the total  number of  employees in  Alaska, how  many                                                               
employees are  resident/non-resident, and she  could go  back and                                                               
prepare that analysis.                                                                                                          
3:43:44 PM                                                                                                                    
REPRESENTATIVE SULLIVAN-LEONARD noted that  she was looking for a                                                               
ball park figure.   She asked whether other pieces  are taken out                                                               
of unemployment insurance for government funding.                                                                               
MS.  HARBOUR answered  that the  department  funds two  different                                                               
programs: the State Training and  Employment Program (STEP) which                                                               
performs  competitive  workforce   development  grants;  and  the                                                               
Technical and  Vocational Education program is  designated to the                                                               
recipients in statute.                                                                                                          
REPRESENTATIVE SULLIVAN-LEONARD explained that  she would like to                                                               
know  whether   additional  money  is  taken   from  unemployment                                                               
insurance that would go toward these types of grants.                                                                           
MS. HARBOUR  reiterated that the  STEP and TVEP programs  are the                                                               
two  programs   that  come  out  of   employee  contributions  to                                                               
unemployment insurance.   She referred  to the  previous response                                                               
she provided to  Chair Kito's office and explained  that it shows                                                               
the employee's  contribution to unemployment insurance,  the STEP                                                               
and TVEP  contribution, how much  money is deposited into  the UI                                                               
Trust Fund,  and how much  money is  deposited into the  STEP and                                                               
TVEP accounts.                                                                                                                  
3:45:15 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  asked whether the other  49 states have                                                               
technical  training assistance  for these  two programs,  such as                                                               
MS.  HARBOUR  responded there  are  other  funding mechanisms  in                                                               
other  states  for  training,  but they  do  not  originate  from                                                               
employee contributions  to unemployment  insurance.   Alaska, New                                                               
Jersey,  and  Pennsylvania, are  the  only  three states  in  the                                                               
nation  that  collect  employee  contributions  for  unemployment                                                               
insurance, and New Jersey and  Pennsylvania do not have a similar                                                               
program for training out of that funding.                                                                                       
3:45:58 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  asked for clarification that  there are                                                               
only  three  states  in  the  union  requiring  the  employee  to                                                               
contribute to unemployment insurance.                                                                                           
MS. HARBOUR answered that Representative Josephson was correct.                                                                 
REPRESENTATIVE JOSEPHSON  said, notwithstanding Alaska  being one                                                               
of  the  three  states,  Alaska has  low  unemployment  insurance                                                               
benefits relative to sister-state Washington State.                                                                             
MS. HARBOUR responded, "Correct," and  she opined that Alaska has                                                               
a 30  percent wage replacement  rate in its  maximum unemployment                                                               
insurance payment  to Alaskans,  but she did  not have  the exact                                                               
figure with her today.                                                                                                          
REPRESENTATIVE JOSEPHSON  asked whether  she knew the  30 percent                                                               
number to be lower than the mean.                                                                                               
MS. HARBOUR  responded "Yes," and  she said  she did not  want to                                                               
misspeak because she is not  an expert on unemployment insurance,                                                               
but opined that  Alaska is on the very bottom  in states' maximum                                                               
weekly benefit payments.                                                                                                        
3:47:09 PM                                                                                                                    
REPRESENTATIVE  KNOPP  asked  how   Alaska  compares  as  far  as                                                               
contributions rates to the other states.                                                                                        
MS. HARBOUR  asked whether Representative Knopp  was asking about                                                               
the employer and employee contribution rates.                                                                                   
REPRESENTATIVE  KNOPP  referred to  the  percentages  "we pay  on                                                               
payroll," and asked  how Alaska compares to  other states because                                                               
obviously less benefits are received  under a claim.  He inquired                                                               
as  to  how  Alaska  stands  as far  as  the  contribution  rates                                                               
compared to the other states with revenue versus expenditure.                                                                   
MS. HARBOUR answered that she could  speak to TVEP, but she could                                                               
not speak to the unemployment  insurance program, and she did not                                                               
know the answer to that question.                                                                                               
REPRESENTATIVE KNOPP reiterated his  request for the unemployment                                                               
rates,  employee/employer  total   contribution  rates,  and  how                                                               
Alaska compares  to the other  states.  Obviously,  he commented,                                                               
Alaska is  substantially low in  the benefits section.   He asked                                                               
how Alaska rates in terms of contribution.                                                                                      
MS. HARBOUR said she would look  into the contribution rates.  In                                                               
response  to Representative  Josephson, she  said she  received a                                                               
message  that Alaska  is 39th  in the  United States  per maximum                                                               
weekly benefits.                                                                                                                
3:48:52 PM                                                                                                                    
REPRESENTATIVE  WOOL surmised  that Alaska  is one  of the  three                                                               
states wherein the employee pays  into the unemployment insurance                                                               
contribution,  and  asked  whether   the  other  states  are  all                                                               
employer only.                                                                                                                  
MS. HARBOUR  said that Representative  Wool was correct,  for all                                                               
of the other states it is solely employer contributions.                                                                        
3:49:22 PM                                                                                                                    
REPRESENTATIVE  BIRCH  referred  to  STEP  and  TVEP,  and  asked                                                               
whether STEP  is the  same dollar magnitude,  for example,  if it                                                               
was   $142   million    for   employee   unemployment   insurance                                                               
contributions going to TVEP, and  whether it was roughly the same                                                               
for STEP.                                                                                                                       
MS.  HARBOUR answered  that she  did not  run those  numbers, but                                                               
opined that  it is less.   The  STEP contribution is  0.1 percent                                                               
and TVEP is 0.16 percent, possibly two-thirds, she said.                                                                        
3:50:37 PM                                                                                                                    
REPRESENTATIVE  ZACH   FANSLER,  Alaska  State   Legislature,  in                                                               
response  to Representative  Knopp,  said that  a quick  internet                                                               
search   indicated   Pennsylvania  employees   contributes   0.07                                                               
percent,  and  New  Jersey employees  contribute  0.3825  percent                                                               
according to the 2016 Fast Wage and Tax Facts.                                                                                  
3:51:26 PM                                                                                                                    
REPRESENTATIVE  KNOPP   asked  what   Alaska's  employee/employer                                                               
combined contribution rate is.                                                                                                  
REPRESENTATIVE   FANSLER  replied   that   the  Alaska   employee                                                               
contribution  is 0.5  percent, and  the employer  contribution is                                                               
1.01 percent.                                                                                                                   
3:52:31 PM                                                                                                                    
REPRESENTATIVE   JOSEPHSON   commented   that  he   agrees   with                                                               
Representative Birch  and said  the line item  on a  paycheck has                                                               
the unemployment  insurance, and it  should say "UI,  TVEP STEP."                                                               
That would  be truth in  description, he  described, but it  is a                                                               
policy  call about  whether, why,  or  how much  to fund  through                                                               
this.   This legislation is  about something quite  different, he                                                               
related  that it  is about  extending  a program  that does  many                                                               
things besides  TVEP.  He noted  that he does not  have children,                                                               
but  as part  of  the  social compact,  he  invests  some of  his                                                               
property taxes in public schools,  police officers, and so forth,                                                               
"and I  am okay  with that."   This  is the  way the  world often                                                               
works, and he described it as a sharing of responsibility.                                                                      
3:54:08 PM                                                                                                                    
REPRESENTATIVE STUTES offered that she  is in full support of the                                                               
bill  and  opined  that  the committee  members  have  paid  into                                                               
unemployment insurance as an employee  or employer.  She said she                                                               
is happy  to know that  at least some of  that money is  going to                                                               
retrain  people that  she  could possibly  use  in her  business.                                                               
Alaska  is "pulling  up  the rear"  in  trained individuals,  and                                                               
vocational   training   particularly,   such  as   plumbers,   or                                                               
refrigeration operators  for the  seafood processing  plants, she                                                               
3:55:19 PM                                                                                                                    
REPRESENTATIVE KNOPP related that he  is also a fan of vocational                                                               
training,  especially because  Alaska is  large and  diverse, and                                                               
the local  communities decide which  type of  vocational training                                                               
best  suits  its needs  geographically.    He  said he  does  not                                                               
disagree  with Representative  Birch  and  the funding  mechanism                                                               
could be debated  at another time, but in some  manner it will be                                                               
funded and right now he doesn't see a better option.                                                                            
3:56:01 PM                                                                                                                    
REPRESENTATIVE WOOL moved to report  HB 141, labeled 30-LS0551\A,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying  fiscal notes.   There  being no  objection, HB  141                                                               
passed from the House Labor and Commerce Standing Committee.                                                                    

Document Name Date/Time Subjects
HB141 Supporting Documents-DOLWD response and flow chart 3.8.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 141
CSHB132 (TRA) Fiscal Note-DCCED-DOI 3.8.17.PDF HL&C 3/10/2017 3:15:00 PM
HB 132
CSHB132 (TRA) ver J Explanation of Changes.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
CSHB132 (TRA) Fiscal Note-DOLWD-WC 3.8.17.PDF HL&C 3/10/2017 3:15:00 PM
HB 132
CSHB132 (TRA) ver J Sectional Analysis.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Sponsor Statement 3.8.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Insurance White Paper for Rideshare Drivers 3.8.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Letters of Opposition 3.9.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Letters of Support 3.8.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Lyft Economic Impact Report 3.8.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Ridesharing Key Benefits 3.8.17.png HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents Index 3.9.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Lyft Information 3.8.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Portland Bureau of Transportation Report 3.8.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Legal Opinion 3.7.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB108 Supporting Documents-Letters of Support 3.9.17.pdf HL&C 3/10/2017 3:15:00 PM
HB141 Supporting Documents-Letters of Support 3.9.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 141
HB108 Supporting Documents Index 3.10.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 108
HB108 Supporting Documents-Letters of Support 3.10.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 108
HB132 Supporting Documents - Safety with Uber 3.10.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132
HB132 Supporting Documents - Uber 101 3.10.17.pdf HL&C 3/10/2017 3:15:00 PM
HB 132