Legislature(1995 - 1996)
02/07/1996 02:35 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 229 STATE TRAINING & EMPLOYMENT PROGRAM SENATOR TORGERSON brought SB 229 before the committee as the first order of business. Number 010 REBECCA NANCE , Director, Employment Security Division, Department of Labor, explained that the State Training & Employment Program (STEP) has been in the pilot stage for about six years, and SB 229 will make it a permanent program. Ms. Nance presented a brief a section by section analysis as follows: Section 1 follows through on legislative findings that recommend that a state training program is needed to provide a trained Alaska work force and to reduce the claims for unemployment insurance benefits. Section 2 codifies the temporary program into a new eight-section chapter which are: AS 23.23.010 creates the STEP program on a permanent basis and it uses primarily the original language from the pilot legislation that started in 1989. AS 23.23.020 establishes the employment assistance and training account in the general fund, so, basically, general fund monies aren't used. There are funds earmarked from the employee contribution of the UI (Unemployment Insurance) tax, and the Legislature would appropriate the funds that have already been designated for this express purpose. AS 23.23.030 provides the funding mechanism for the program. One-tenth of one percent of the employee contribution to the Unemployment Insurance Fund would be what is used for this. The most any employee would pay for this program would be roughly $24 after they've maxed out on their base wages. AS 23.23.040 allows for the flexibility of the program that federal programs aren't able to address. Any Alaskan who is currently on unemployment insurance, or has been a past recipient, or might be a recipient would be eligible under STEP. AS 23.23.050 defines the services that the grantees must deliver. They must provide one or more of the services listed. AS 23.23.060 defines the duties of the department in awarding grants to the Alaska Human Resource Investment Council. The Council was created by the Legislature in the 1995 session and it consolidates the employment and training programs in the state. It also addresses the administration of the council and the employment and training programs and provides that the council may award grants to other entities. AS 23.23.070 sets out the duties of the Alaska Human Resources Investment Council in awarding STEP grants and it insures that the program will not compete with or displace other training programs or training money. AS 23.23.900 defines the terms used in the chapter. Section 3 provides for the effective date of the legislation. Ms. Nance said STEP has been a flexible program that is paid for and utilized by Alaska workers, it stabilizes employment in the state and keeps Alaskans trained and ready to work in Alaska. She urged the committee's support of the legislation. Number 125 SENATOR TORGERSON asked for examples of pilot projects that might be administered by the council. Responding to Senator Torgerson's inquiry, MARK NICHOLSON , Program Coordinator, Department of Community & Regional Affairs, said in his role as program coordinator, he has been responsible for a combination of both federal and STEP state supported activity. He said he could provide a comprehensive list of the actual training and the jobs placed, but he pointed out that one area in which they feel they've really made some strides in promoting Alaskan hire has to do with training in the fisheries. He said they have provided assistance for a variety of different occupations and training, focusing the training on where there are Alaskan jobs. SENATOR TORGERSON asked for a description of "administrative entities of the sub-state service delivery areas." MARK NICHOLSON explained that under the Job Training Partnership Act three sub- state areas were created that met the criteria set forth in the federal legislation for purposes of local administration of employment training programs under the Job Training Partnership Act. Those service delivery areas are Alaska Statewide, the Anchorage/MatSu Consortium and the Fairbanks Private Industry Council. Number 130 SENATOR KELLY referred to a table on funding allocations and expenditures for the STEP program for fiscal years 1990 through 1994, and he asked why it cost $283,445 to cover the cost of funding collection when all they need to do is get a check from the unemployment pool. PAUL ENGELMAN , Research Economist, Department of Labor, said the dollar amount was a negotiation between the department and feds, but his understanding is that because the program is funded out of the state's portion, the department was held responsible for the entire cost of collecting that money. He added that he would get information on that figure. SENATOR KELLY asked how many state employees were working directly in this program. REBECCA NANCE responded that no one is fully funded by this, but they have one person in the technical unit and the program manager for employment services who work on the program, as well as whatever research analysis needs to be done on it. SENATOR KELLY said he was interested in understanding the cash flow and the how the money flows through the Department of Labor to whoever puts it into the training cycle. REBECCA NANCE said she would supply that information to Senator Kelly and the committee. She noted that the $283,000 figure has been reduced by approximately $75,000, which was put back into the UI trust fund. She also noted she had provided a list of contractors and their award amounts from program years 1990 through 1994. MARK NICHOLSON related that for the service delivery component, the three sub-state areas are allowed 12 percent for administrative overhead, so approximately 88 percent is directed towards client services with the grants that are made available. In his department STEP supports one full position, as well as a small portion of a few other people who are involved. He also noted that they believe that Congress will pass a new federal block grant for states' unemployment training. Number 300 SENATOR TORGERSON said that SB 206 (Welfare Reform) is also in the Community & Regional Affairs Committee, and a lot of that is dedicating large amounts of money into employment types of programs, and he asked how that interacts with the STEP program. MARK NICHOLSON responded that the current system tries to work in sync with respect to some of the different federal programs. There are different eligibility and different criteria with respect to the type of people they are trying to serve. The STEP legislation does not focus on economically disadvantaged; it is a little different target and it fits in nicely in terms of eligibility and outreach. The federal resources currently serve about four to five percent of the potentially eligible clients. He added that whatever happens with the welfare reform legislation, he thinks it will be important to work with the systems and the people that are familiar with employment training. SENATOR TORGERSON pointed out that there are many departments that are having economic development programs with the same goal to put people to work. However, last year the Alaska Human Resource Investment Council was created combining a lot of these things so that the council would be able to take this responsibility, but now we're doing other things with it through department programs, he observed. Number 435 SENATOR KELLY asked if trainees in programs get an advanced unemployment insurance benefit while they are doing the training. REBECCA NANCE answered that that was separate and they would have to meet eligibility on their own. She did note that some grantees provide room and board as part of their training programs. SENATOR KELLY also asked if there were any significant changes between the existing STEP program and this legislation that makes it a permanent program. REBECCA NANCE replied that the only significant change is the area relating to the Alaska Job Training Council, which sunsetted December 31, 1995. Number 450 DAVID STONE , President, Council of Alaska Producers, said their membership consists of all of the major hard rock mining companies actively doing business in Alaska, and he expressed the mining industry's support for the permanent reauthorization of the STEP program. He said the program is and has been business friendly and business accessible. It is more flexible and has less restrictions than most job training programs primarily due to the fact that the program is designed and administered by Alaskans. He added that STEP has already trained Alaskans and resulted in jobs in the mining industry, as well as it has helped workers who have lost their jobs. The members of the Council of Alaska Producers view STEP as a true partnership between the state of Alaska and industry, and they encourage its passage. Number 475 SENATOR TORGERSON stated SB 229 would be held so that the department could respond to questions that had been raised during the hearing.