Legislature(2007 - 2008)BARNES 124

04/10/2007 05:00 PM House ECONOMIC DEV., TRADE, AND TOURISM


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05:04:04 PM Start
05:04:24 PM HB217
05:43:49 PM Presentation: Alaska Works Partnership
06:27:21 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation by Alaska Works Partnership TELECONFERENCED
Inc.
+= HB 217 TOURISM DISCLOSURES AND NOTICES TELECONFERENCED
Heard & Held
                                                                                                                              
                    ALASKA STATE LEGISLATURE                                                                                  
 HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL                                                               
                       TRADE AND TOURISM                                                                                      
                         April 10, 2007                                                                                         
                           5:04 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Chair                                                                                               
Representative Carl Gatto                                                                                                       
Representative Kyle Johansen                                                                                                    
Representative Vic Kohring                                                                                                      
Representative Bob Lynn                                                                                                         
Representative Andrea Doll                                                                                                      
Representative Mike Doogan                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Representative Lindsey Holmes                                                                                                   
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
HOUSE BILL NO. 217                                                                                                              
"An  Act relating  to required  onboard disclosures  and displays                                                               
about   tours,   flight   seeing  operations,   other   shoreside                                                               
activities, and visitors bureaus;  and providing for an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
Presentation:  Alaska Works Partnership, Inc.                                                                                   
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
BILL: HB 217                                                                                                                  
SHORT TITLE: TOURISM DISCLOSURES AND NOTICES                                                                                    
SPONSOR(s): REPRESENTATIVE(s) HOLMES                                                                                            
                                                                                                                                
03/22/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/22/07       (H)       EDT, JUD                                                                                               
04/03/07       (H)       EDT AT 5:30 PM CAPITOL 106                                                                             
04/03/07       (H)       Heard & Held                                                                                           
04/03/07       (H)       MINUTE(EDT)                                                                                            
04/10/07       (H)       EDT AT 5:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RICHARD BENEVILLE, Owner                                                                                                        
Nome Discovery Tours;                                                                                                           
Member,                                                                                                                         
Nome Chamber of Commerce;                                                                                                       
Member, Board of Directors                                                                                                      
Alaska State Chamber of Commerce                                                                                                
Nome, Alaska                                                                                                                    
POSITION STATEMENT:  Testified during the hearing on HB 217.                                                                    
                                                                                                                                
STAN STEPHENS, President                                                                                                        
Stan Stephens Glacier & Wildlife Cruises                                                                                        
Valdez, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 217.                                                                            
                                                                                                                                
LOREN GERHARD, Vice President                                                                                                   
Marine Operations                                                                                                               
Four Seasons Tours                                                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 217.                                                                            
                                                                                                                                
ROBERT JACOBSEN, President                                                                                                      
Wings of Alaska and Wings Airlines                                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Testified during the hearing on HB 217.                                                                   
                                                                                                                                
MIKE ANDREWS, Director                                                                                                          
Alaska Works Partnership Inc.,                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Provided the presentation on Alaska Works                                                                 
Partnership, Inc.                                                                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR MARK NEUMAN called the  House Special Committee on Economic                                                             
Development, International Trade and  Tourism meeting to order at                                                               
5:04:04 PM.   Representatives Doll,  Doogan, Kohring,  Gatto, and                                                             
Neuman were present  at the call to order.   Representatives Lynn                                                               
and   Johansen  arrived   as  the   meeting   was  in   progress.                                                               
Representative Holmes was also in attendance.                                                                                   
                                                                                                                                
HB 217-TOURISM DISCLOSURES AND NOTICES                                                                                        
                                                                                                                                
5:04:24 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN announced that the  first order of business would be                                                               
HOUSE  BILL  NO.  217,  "An  Act  relating  to  required  onboard                                                               
disclosures and  displays about tours, flight  seeing operations,                                                               
other shoreside  activities, and visitors bureaus;  and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
CHAIR NEUMAN opened the hearing to public testimony on HB 217.                                                                  
                                                                                                                                
5:06:01 PM                                                                                                                    
                                                                                                                                
RICHARD BENEVILLE, owner  of Nome Discovery Tours,  member of the                                                               
Nome Chamber  of Commerce, and  board member of the  Alaska State                                                               
Chamber  of  Commerce,  expressed  his  belief  that  HB  217  is                                                               
punitive  to the  small business  owner  and to  the cruise  ship                                                               
companies.  He  added that the bill is against  fair play and the                                                               
spirit of  small business in Alaska.   He urged the  committee to                                                               
not support the [bill].                                                                                                         
                                                                                                                                
5:07:52 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN asked how the bill is anti-business.                                                                               
                                                                                                                                
MR. BENEVILLE stated  that he was looking at a  copy of the bill,                                                               
and noted  the language  regarding the disclosure  of fees.   Mr.                                                               
Beneville stated  his understanding of  the intent, but  that the                                                               
language  of  the  bill  is  counter  to  free  enterprise.    He                                                               
acknowledged that Nome  does not have the cruise  ship traffic of                                                               
Southeast.                                                                                                                      
                                                                                                                                
5:09:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  asked whether  Mr. Beneville  voted against                                                               
the Alaska Cruise Ship Initiative (initiative).                                                                                 
                                                                                                                                
5:09:32 PM                                                                                                                    
                                                                                                                                
MR. BENEVILLE answered yes.                                                                                                     
                                                                                                                                
5:09:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GATTO  opined   that,  after   passage  of   the                                                               
initiative, HB 217  was written to implement the  decision by the                                                               
voters.   The  initiative can  not be  repealed, it  can only  be                                                               
modified.                                                                                                                       
                                                                                                                                
5:10:17 PM                                                                                                                    
                                                                                                                                
MR. BENEVILLE  suggested that the  voters may have  been confused                                                               
by the wording of the initiative.                                                                                               
                                                                                                                                
5:10:40 PM                                                                                                                    
                                                                                                                                
STAN  STEPHENS,  president,  Stan  Stephens  Glacier  &  Wildlife                                                               
Cruises, expressed  his support of  HB 217.  Mr.  Stephens stated                                                               
that he  participated in the  advertising against  the initiative                                                               
and has  always supported small  business.   He said that  he saw                                                               
the initiative as  a grudge against the cruise  ship industry and                                                               
the disclosures  required by its  passage shut  down competition,                                                               
are  un-American, and  set  a  new precedent.    He concluded  by                                                               
saying that HB  217 will dissolve some of the  problems caused by                                                               
the initiative.                                                                                                                 
                                                                                                                                
5:13:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOLL asked whether  there should be any regulation                                                               
of cruise ship commission rates.                                                                                                
                                                                                                                                
5:13:30 PM                                                                                                                    
                                                                                                                                
MR.  STEPHENS expressed  his feeling  that there  is no  need for                                                               
regulation.  He said that he  would not want his business pricing                                                               
to be open to his competitors.                                                                                                  
                                                                                                                                
5:14:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOLL expressed her  impression that the initiative                                                               
was to  protect small  business and to  regulate the  cruise ship                                                               
industry.                                                                                                                       
                                                                                                                                
MR.  STEPHENS opined  that this  initiative hurts  small business                                                               
and  could have  an impact  to businesses  outside of  the cruise                                                               
ship industry.                                                                                                                  
                                                                                                                                
5:15:09 PM                                                                                                                    
                                                                                                                                
LOREN GERHARD, vice president of  Marine Operations, Four Seasons                                                               
Tours,  informed the  committee that  Four Seasons  Tours employs                                                               
about 70  workers in  the summer, and  contributes $1  million to                                                               
the local  economy.  His business  sells its tours on  the cruise                                                               
ships and to do so must  meet standards of quality and of volume.                                                               
He stressed that  his company uses invoices  to transfer payments                                                               
and  that transactions  are monitored  by taxing  agencies.   Mr.                                                               
Gerhard  said that  his negotiations  with the  cruise ships  are                                                               
private,  as   are  most   negotiations  between   retailers  and                                                               
wholesalers.   He expressed  his belief that  there are  no other                                                               
businesses,  outside  of  tours  sold  on  the  ships,  that  are                                                               
required to disclose wholesale prices.   To be fair, he said, all                                                               
commissions  for travel  agents  should also  be  disclosed.   He                                                               
opined  that the  initiative  was  about the  head  tax, and  the                                                               
voters  were unaware  of this  provision.   Mr. Gerhard  told the                                                               
committee  that he  supports HB  217  because it  reveals that  a                                                               
commission is  paid, but will  not disclose the  wholesale price.                                                               
He concluded  by saying  that the  legislature has  the authority                                                               
and responsibility to modify the initiative.                                                                                    
                                                                                                                                
5:19:54 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN  asked  whether  Mr.  Gerhard  would  describe  his                                                               
business as a wholesale provider to the cruise ship industry.                                                                   
                                                                                                                                
5:20:17 PM                                                                                                                    
                                                                                                                                
MR. GERHARD  answered yes.  In  response to a question,  he noted                                                               
that there is no commitment from  the ship to a specific level of                                                               
volume.   The  commission  is negotiated  periodically  and is  a                                                               
routine  business decision  that balances  a lower  profit margin                                                               
with a level of potential volume.                                                                                               
                                                                                                                                
5:21:08 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN  asked  whether  a  new  competitor  has  an  equal                                                               
opportunity to  approach the cruise  industry about  sales aboard                                                               
the ships.                                                                                                                      
                                                                                                                                
5:21:51 PM                                                                                                                    
                                                                                                                                
MR. GERHARD  responded yes.   However, the cruise  ship companies                                                               
will  decide what  activities to  offer to  their passengers  and                                                               
cannot  offer every  vendor.    He opined  that  if the  industry                                                               
discloses  the  availability  of other  shoreside  vendors,  that                                                               
disclosure  should satisfy  the  intent of  the  initiative.   In                                                               
addition, the tours offered on the  ship are a better product for                                                               
the passengers.                                                                                                                 
                                                                                                                                
5:23:02 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN asked  whether there is a high  level of competition                                                               
between on-shore tour operators for  a sales arrangement with the                                                               
cruise lines.                                                                                                                   
                                                                                                                                
5:23:32 PM                                                                                                                    
                                                                                                                                
MR. GERHARD replied that the  strong competition is the reason he                                                               
does not want to disclose his wholesale price.                                                                                  
                                                                                                                                
5:23:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOLL asked whether Mr.  Gerhard has an interest in                                                               
knowing what  discount rates  his competitors  pay to  the cruise                                                               
lines.                                                                                                                          
                                                                                                                                
5:24:09 PM                                                                                                                    
                                                                                                                                
MR. GERHARD assured the committee  that he would be interested in                                                               
the information; however, the state  government does not have the                                                               
right to require this information to be made public.                                                                            
                                                                                                                                
5:25:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN remarked:                                                                                                 
                                                                                                                                
     We had  an election  in which  the voters  decided that                                                                    
     this should  be done.  ... Apparently, if  I understand                                                                    
     your argument  correctly, you don't like  that they did                                                                    
     that, you don't think it's  fair that they did that and                                                                    
     you think  that we ought  to do something  that changes                                                                    
     what they  approved, under the theory  that they didn't                                                                    
     really understand what they were doing....                                                                                 
                                                                                                                                
5:26:19 PM                                                                                                                    
                                                                                                                                
MR.  GERHARD acknowledged  that the  initiative has  passed, even                                                               
though  tour  operators tried  to  inform  the public  about  the                                                               
disclosure measure.   He expressed his belief that  the intent of                                                               
the voters is met by HB 217.                                                                                                    
                                                                                                                                
5:27:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN asked:                                                                                                    
                                                                                                                                
     Don't we  have to assume  that the voters  knew exactly                                                                    
     what they were doing and  voted to do this on purpose?"                                                                    
     ... If we did that, don't  we have to assume that their                                                                    
     intent was  to do  just this,  to require  exactly what                                                                    
     the initiative says it requires?                                                                                           
                                                                                                                                
5:27:40 PM                                                                                                                    
                                                                                                                                
MR. GERHARD remarked:                                                                                                           
                                                                                                                                
     I think that the intent  is, is to describe to tourists                                                                    
     that the relationship with  these cruise ship companies                                                                    
     involves  a commission.   I  have no  problem admitting                                                                    
     that.   But for me  to have  to provide my  precise ...                                                                    
     wholesale prices, it's overreach, is what it is.                                                                           
                                                                                                                                
5:28:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN said:                                                                                                     
                                                                                                                                
     This is  not, in my view,  a particularly discretionary                                                                    
     matter for  us. ...  I don't think  that we  can assume                                                                    
     that we know why they did  it, or what parts of it they                                                                    
     were voting  on, or  what parts of  it they  didn't pay                                                                    
     any attention to.  ... I just want  everybody who wants                                                                    
     to make  this argument  to the committee  to understand                                                                    
     what it is they're asking us to do here.                                                                                   
                                                                                                                                
5:29:30 PM                                                                                                                    
                                                                                                                                
MR. GERHARD  expressed his understanding  that the change  can be                                                               
made through the  Legislative Legal and Research  division of the                                                               
Legislative Affairs Agency.                                                                                                     
                                                                                                                                
5:30:04 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN observed that it  is the legislature's job to review                                                               
the initiative; in fact, subtle changes  have been made to the 90                                                               
Day Session Initiative.                                                                                                         
                                                                                                                                
5:30:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO   recalled  that   the  Gas   Reserves  Tax                                                               
Initiative  failed and  inquired whether  it was  appropriate for                                                               
the legislature to repeal the initiative  and impose the tax.  He                                                               
inquired also  whether the  legislature should  alter the  90 Day                                                               
Session Initiative.  He then said:                                                                                              
                                                                                                                                
     Should we go to this bill,  in front of us, and say the                                                                    
     public probably  wasn't aware of what  they were voting                                                                    
     on for the  head tax.  What they were  really voting on                                                                    
     was  part  four,  which was  the  information  that  is                                                                    
     supposed to  be revealed.  ... I  don't want  to simply                                                                    
     object to the people's wishes  out of hand and say, and                                                                    
     support essentially  what your testimony was,  was that                                                                    
     people may  have erred, in  not understanding  what was                                                                    
     there. ... I  don't know how I could  possibly sit here                                                                    
     and say they  didn't know. ... What I  will do, though,                                                                    
     and  I'm in  favor of  the bill  myself, is  to say,  I                                                                    
     think what we  can do to make this  somewhat easier for                                                                    
     businessmen, ... but not to repeal it.                                                                                     
                                                                                                                                
                                                                                                                                
5:33:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN stated that Sec.  1 of the bill includes what                                                               
the voters  approved and expands  to include  another alternative                                                               
disclosure.  He indicated his support of the bill at this time.                                                                 
                                                                                                                                
5:34:46 PM                                                                                                                    
                                                                                                                                
ROBERT  JACOBSEN,   president  of  Wings  of   Alaska  and  Wings                                                               
Airlines, informed the committee that  his small airline began to                                                               
sell tours  on board the  ships 25 years  ago.  Last  year, Wings                                                               
flew 80,000  passengers on excursions.   He expressed  his belief                                                               
that  initiatives should  be about  a single  issue and  that the                                                               
lieutenant  governor made  a mistake  by  sanctioning the  Alaska                                                               
Cruise Ship Initiative.   If the initiative  concerned one issue,                                                               
there would  be no  doubt about  the intent of  the voters.   Mr.                                                               
Jacobsen  said that  competition is  open to  new operators.   In                                                               
fact, one  marine tour company  began operations five  years ago,                                                               
and it  was able to establish  sales on the cruise  ships without                                                               
any problem.   He said  that HB 217 refers  to his business  as a                                                               
"paid promotion" and that is  an inaccurate representation of his                                                               
airline.  He remarked:                                                                                                          
                                                                                                                                
     But,  if we're  going  to  say that  ...  [in HB  217],                                                                    
     "other  alternatives  may  be   available  at  a  lower                                                                    
     price," then I suggest that  we also say that "they are                                                                    
     also available  at a  higher price,  and they  are also                                                                    
     available at lesser quality,  they're also available by                                                                    
     fly-by-nights"  ... How  far do  we go  there, when  we                                                                    
     start saying  that they're available at  a lower price?                                                                    
     ...                                                                                                                        
                                                                                                                                
5:39:24 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN  stated that  the language  in the  bill is  just to                                                               
inform the passengers about alternatives.                                                                                       
                                                                                                                                
5:39:36 PM                                                                                                                    
                                                                                                                                
MR.  JACOBSEN agreed  that alternatives  are great;  however, the                                                               
alternatives must be qualified with more information.                                                                           
                                                                                                                                
5:39:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  stated his belief that  on-shore tours have                                                               
no opportunity  to compete  with the  tours sold  on ships.   The                                                               
motivation  for  this  part  of  the  initiative  is  that  other                                                               
businesses can not  get to the passengers to  market their tours.                                                               
He said this raises the question  of whether the cruise ships own                                                               
the port or whether there is a free market.                                                                                     
                                                                                                                                
5:41:52 PM                                                                                                                    
                                                                                                                                
MR.  JACOBSEN replied  that the  alternatives referred  to should                                                               
include:   higher value, lesser  value, lesser quality,  and fly-                                                               
by-nights.                                                                                                                      
                                                                                                                                
5:42:41 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN announced that public  testimony was closed for this                                                               
meeting and that the sponsor  will present a committee substitute                                                               
at the meeting scheduled for April 17, 2007.                                                                                    
                                                                                                                                
[HB 217 was held in committee]                                                                                                  
                                                                                                                                
^Presentation:  Alaska Works Partnership                                                                                      
                                                                                                                                
CHAIR NEUMAN announced that the  final order of business would be                                                               
a presentation by the Alaska Works Partnership.                                                                                 
                                                                                                                                
5:43:49 PM                                                                                                                    
                                                                                                                                
MIKE ANDREWS,  Director of Alaska  Works Partnership  Inc. (AWP),                                                               
informed  the  committee  that  AWP is  a  consortium  of  Alaska                                                               
building trades  unions and their  apprenticeship programs.   Its                                                               
focus  is on  the construction  industry and  on moving  Alaskans                                                               
into jobs  in the  construction industry.   He presented  a video                                                               
depicting scenes from AWP's training  program for future pipeline                                                               
workers.  Mr.  Andrews stated that the pipeline  program was also                                                               
supported  by the  pipeline unions,  the North  Slope Contractors                                                               
Association, and the  Department of Labor (DOL),  and has trained                                                               
297 apprentices with an employment rate of 95 percent.                                                                          
                                                                                                                                
5:51:01 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS continued  to say that the Denali  Commission and the                                                               
U. S.  Department of  Labor provided  major funding  to establish                                                               
the AWP in 2000.  The  Trade Apprentices program accepts 50 to 60                                                               
applicants per year and the  Technical Trade courses are paid for                                                               
by  the private  sector.   The  Building  Maintenance and  Repair                                                               
Apprenticeship  program  has  built  over 350  homes  in  Western                                                               
Alaska  and  has provided  labor  to  work on  schools,  clinics,                                                               
roads, and safe water projects for nine major employers.                                                                        
                                                                                                                                
5:53:08 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN  asked  whether reductions  in  federal  and  state                                                               
funding will affect AWP.                                                                                                        
                                                                                                                                
5:53:13 PM                                                                                                                    
                                                                                                                                
MR.  ANDREWS expressed  his  hope that  federal  and state  funds                                                               
will continue  to support the  State Training  Employment Program                                                               
(STEP)  and the  Technical Vocational  Education Program  (TVEP).                                                               
The AWP  will continue  to provide training  with the  support of                                                               
the industry.   Mr. Andrews continued his  presentation by noting                                                               
that the  award winning Women  in the Trades program  was created                                                               
in  2003  to   increase  the  percentage  of   women  working  in                                                               
construction.    Forty  applicants  have  been  accepted  in  the                                                               
program.  The  Helmets to Hardhats (H2H) program  is conducted in                                                               
partnership with the U. S.  Department of the Army, Department of                                                               
Defense,  the  National  Building Construction  Trades,  and  the                                                               
national  H2H   organization.    In  2006,   37  H2H  apprentices                                                               
participated in  training with additional support  from the state                                                               
for  job placement  for  veterans.   Mr.  Andrews  said that  the                                                               
Pipeline  Training program  has resulted  in high  employment for                                                               
graduates.    This program  received  $1.5  million for  pipeline                                                               
training equipment and $3 million  for construction of a pipeline                                                               
training  facility  from  the  state.    The  Fairbanks  training                                                               
facility will also receive $3  million of federal funds dedicated                                                               
by the Alaska Natural Gas Pipeline Act of 2005.                                                                                 
                                                                                                                                
5:56:33 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN asked  how interested  businesses  contact AWP  for                                                               
information about training programs.                                                                                            
                                                                                                                                
5:56:54 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS replied  that employers that are  committed to hiring                                                               
trainees can  contact his  office.   The AWP  will then  look for                                                               
resources and other  interested parties in the  same community to                                                               
explore the feasibility of a training course or academy.                                                                        
                                                                                                                                
5:57:22 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN  suggested  that   committee  members  contact  Mr.                                                               
Andrews for further information.                                                                                                
                                                                                                                                
5:57:40 PM                                                                                                                    
                                                                                                                                
MR.  ANDREWS called  the committee's  attention  to the  pipeline                                                               
training facility to be built  Fairbanks.  Design and engineering                                                               
plans are  underway; however, he  estimated that $3  million will                                                               
be  needed  to  complete  the  facility.    In  addition,  mobile                                                               
Construction Academies  provide intensive training for  150 youth                                                               
aged 17 to  24 years, in conjunction with  nine school districts.                                                               
He  added  that  the  emphasis  on  math  at  the  academies  has                                                               
increased math scores  for participating students.   In 2006, the                                                               
state  funded a  $1  million  grant for  the  development of  the                                                               
Anchorage  Construction Academy  which opened  in October,  2006.                                                               
This  project  was  completed  through  a  partnership  with  the                                                               
Associated   General   Contractors,  Anchorage   Home   Builders,                                                               
Anchorage School District,  and others.  Mr.  Andrews stated that                                                               
after  school classes  are held  at  the King  Career Center  and                                                               
evening classes are  held for adults.  Seven  hundred high school                                                               
students  and one  hundred and  fifty  adults have  participated.                                                               
The AWP  is planning  to expand  the mobile  vocational education                                                               
program  to   the  regions  of  Mat-Su,   Kenai,  Fairbanks,  and                                                               
Southeast.   In  conclusion, Mr.  Andrews  said that  the AWP  is                                                               
working  to  close  the  construction skills  gap  with  a  cost-                                                               
effective  and   efficient  system  that  is   supported  by  the                                                               
construction industry.                                                                                                          
                                                                                                                                
6:02:09 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN observed  that the  state  Department of  Education                                                               
(DOE) has  established benchmarks  for core  subjects.   He asked                                                               
whether  AWP and  the  industry can  support  youth programs  and                                                               
connect  on-the-job training  with  school  benchmarks for  grade                                                               
level achievement.   In  this way,  private industry  can provide                                                               
students with training  that will also qualify  as credits toward                                                               
graduation.                                                                                                                     
                                                                                                                                
6:04:21 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS  replied that each  school district is  different and                                                               
state and  federal standards, coupled  with limited  funding, can                                                               
restrict possible training opportunities.   Schools, he said, are                                                               
supportive of  AWP programs that  do not take  school instruction                                                               
time  or increase  planning responsibilities  for teachers.   The                                                               
AWP programs  provide an instructional  kit and  create solutions                                                               
for  schools  that  wish  to  increase  vocation  training.    He                                                               
stressed that legislators need to  bring back vocational training                                                               
in schools  to utilize applied  math skills and to  increase high                                                               
school  graduation rates.   Studies  have  shown that  vocational                                                               
education  will  increase  math   and  science  scores  and  keep                                                               
students in school.                                                                                                             
                                                                                                                                
6:07:16 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN opined  that applied math is more  appealing to many                                                               
students.                                                                                                                       
                                                                                                                                
6:07:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN asked  how an  initial contact,  such as                                                               
the one made by the  Ketchikan Homebuilders Association, would be                                                               
addressed.                                                                                                                      
                                                                                                                                
6:08:26 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS responded that the  AWP will encourage the company to                                                               
talk with  the high school  and college, and  related industries,                                                               
to begin a  dialog and to search for the  resources and talent in                                                               
the  community.    Local  and   regional  business  leaders  will                                                               
determine  the   future  need  for   skilled  workers   in  their                                                               
community, based  on planned future  projects.  He  stressed that                                                               
many different occupations  have a need for  workers with similar                                                               
skills, such  as welding.   The best  training will  teach skills                                                               
that  can  be  adapted  to  meet   the  needs  of  a  variety  of                                                               
construction businesses.   The AWP  requires that  the businesses                                                               
in the communities it serves will be ready to hire the trainees.                                                                
                                                                                                                                
6:10:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  noted that  the local community  must be                                                               
part of the initial process.                                                                                                    
                                                                                                                                
6:11:16 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS added  that the AWP periodically has  money for rural                                                               
training dollars from the Denali Commission.                                                                                    
                                                                                                                                
6:12:17 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN  asked  how  a large  industry,  such  as  Northrop                                                               
Grumman    Corporation,   can    be   involved    in   developing                                                               
apprenticeship programs.                                                                                                        
                                                                                                                                
6:12:49 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS  answered that the state  administration must provide                                                               
for workforce development.  Many  large corporations want workers                                                               
with  basic skills  and math  abilities and  they will  teach the                                                               
technical skills as on-the-job training.   He said that the world                                                               
of work  requires highly  technical skills  and other  states are                                                               
providing  education  at  the  13th  and  14th  year  to  prepare                                                               
students for employment.                                                                                                        
                                                                                                                                
6:14:32 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN asked what can be done at the high school level.                                                                   
                                                                                                                                
6:14:48 PM                                                                                                                    
                                                                                                                                
MR.  ANDREWS  reiterated  that  an investment  by  the  state  in                                                               
vocational education  is needed.   He relayed that,  before 1985,                                                               
Alaska  had  high levels  of  vocational  education in  the  high                                                               
schools  and high  graduation rates,  also.   As the  funding for                                                               
education was  decreased and  vocational programs  and facilities                                                               
were eliminated, graduation rates declined.                                                                                     
                                                                                                                                
6:15:41 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN  observed that rural  areas have  difficulty meeting                                                               
the requirements for core subjects  mandated by the No Child Left                                                               
Behind Act  of 2002.   Staffing highly qualified  status teachers                                                               
in  small schools  is costing  school districts  additional funds                                                               
for core  subjects and  will also  keep vocational  programs from                                                               
being re-instated.                                                                                                              
                                                                                                                                
6:16:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN asked  about  the  attitude that  school                                                               
districts hold toward vocational education.                                                                                     
                                                                                                                                
6:17:35 PM                                                                                                                    
                                                                                                                                
MR.  ANDREWS responded  that school  districts are  becoming more                                                               
interested in vocational education but  do not have the resources                                                               
necessary  to provide  it.    Again, when  the  AWP is  providing                                                               
instructors  and  after  school  programs,  they  are  very  well                                                               
received.                                                                                                                       
                                                                                                                                
6:18:29 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN   observed  that   special  needs   and  vocational                                                               
education is funded from the same budget.                                                                                       
                                                                                                                                
6:19:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOLL stated  that  the University  of Alaska  has                                                               
apprentice programs and is well  connected with the high schools.                                                               
She suggested that there is a  need for more cooperation with the                                                               
university.                                                                                                                     
                                                                                                                                
6:19:47 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS affirmed  that the AWP does work  with the University                                                               
of Alaska  and with the  Technical Education Center  in Kotzebue.                                                               
He pointed out that there  are many opportunities for students to                                                               
obtain  dual credits  for  high school  and  college.   Industry,                                                               
labor,  and  education  partnerships   are  vital  for  workforce                                                               
development.                                                                                                                    
                                                                                                                                
6:20:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO observed  that  the new  Mat-Su Career  and                                                               
Technical High School experienced a disappointing enrollment.                                                                   
                                                                                                                                
6:21:12 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS  informed the committee  that the  school experienced                                                               
problems  attracting   students  from  their  home   schools  and                                                               
providing  transportation   for  students  from   throughout  the                                                               
district.   The  AWP  is  interested in  using  the facility  for                                                               
training adults  during evening hours  and will be  assisting the                                                               
school district with new ideas.                                                                                                 
                                                                                                                                
6:22:08 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN   opined  that  the  new   program  teaches  skills                                                               
beginning in  9th grade  and perhaps  a student  is too  young to                                                               
identify his or her interests.                                                                                                  
                                                                                                                                
6:22:55 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS clarified  that the Mat-Su Career  and Technical High                                                               
School is incorporating standard  academic courses with technical                                                               
education and will be opening soon.                                                                                             
                                                                                                                                
6:23:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO opined  that  students are  often loyal  to                                                               
their neighborhood schools.                                                                                                     
                                                                                                                                
6:23:57 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS added that sports were  not offered at the new school                                                               
and that transportation a big problem.   He noted that funds were                                                               
available to  bus Anchorage  students to  the King  Career Center                                                               
and enrollment there is very high.                                                                                              
                                                                                                                                
6:24:47 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN asked  how  much  money is  needed  to be  directed                                                               
toward vocational education.                                                                                                    
                                                                                                                                
6:25:12 PM                                                                                                                    
                                                                                                                                
MR. ANDREWS answered that in  the private sector the construction                                                               
trade and  union apprenticeship  programs are  funded at  the $10                                                               
million level  to train 1,600  apprentices and  3,000 journeymen.                                                               
The return  on investment  for vocational  training is  very high                                                               
based on private  sector investment, and investment  by the state                                                               
will entice industry to participate at even higher levels.                                                                      
                                                                                                                                
6:26:47 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN  suggested  that   committee  members  contact  Mr.                                                               
Andrews  for  ideas  about  educational  opportunities  in  their                                                               
districts.                                                                                                                      
                                                                                                                                
6:27:21 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special  Committee on  Economic Development,  International Trade                                                               
and Tourism meeting was adjourned at 6:27 p.m.                                                                                  

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