Legislature(1995 - 1996)

02/07/1996 02:35 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                  
 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                
 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                   
  AS 23.23.050 defines the services that the grantees must                     
  deliver.  They must provide one or more of the services                      
  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                 
 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            
  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              
 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.                                                                  

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