Legislature(2007 - 2008)HOUSE FINANCE 519
05/07/2007 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB177 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 177 | ||
HOUSE FINANCE COMMITTEE
May 7, 2007
2:24 p.m.
CALL TO ORDER
Co-Chair Chenault called the House Finance Committee meeting
to order at 2:24:06 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Bill Thomas, Jr.
Representative Mary Nelson
MEMBERS ABSENT
Representative Richard Foster
ALSO PRESENT
Representative Mark Neuman; Nico Bus, Acting Director,
Division of Administrative Services, Department of Natural
Resources; Antony Scott, Commercial Analyst, Division of Oil
and Gas, Department of Natural Resources; Jerry Burnett,
Director, Division of Administrative Services, Department of
Revenue; Guy Bell, Assistant Commissioner, Department of
Labor and Workforce Development; Clark (Click) Bishop,
Commissioner, Department of Labor and Workforce Development
PRESENT VIA TELECONFERENCE
Robert Lang, University of Alaska, Anchorage; Jeffery
Callahan, Professor, Construction and Design Technology,
University of Alaska, Anchorage; Pat Pitney, Vice President,
Budget and Planning, University of Alaska, Anchorage; Jane
Gehler, University of Alaska, Anchorage
SUMMARY
HB 177 "An Act relating to the Alaska Gasline Inducement
Act; establishing the Alaska Gasline Inducement
Act matching contribution fund; providing for an
Alaska Gasline Inducement Act coordinator; making
conforming amendments; and providing for an
effective date."
CSHB 177 (RES) was heard and HELD in Committee for
further consideration.
2:25:36 PM
HOUSE BILL NO. 177
"An Act relating to the Alaska Gasline Inducement Act;
establishing the Alaska Gasline Inducement Act matching
contribution fund; providing for an Alaska Gasline
Inducement Act coordinator; making conforming
amendments; and providing for an effective date."
Co-Chair Chenault drew attention to zero fiscal note #1
prepared by Alaska Oil and Gas Conservation Commission
(AOGCC) for the Department of Administration. There were no
comments or questions regarding the fiscal note.
Representative Gara requested information about the AGIA
schedule for the week. Co-Chair Chenault discussed the
upcoming schedule.
2:27:49 PM
Co-Chair Chenault turned attention to zero fiscal note #2 by
the Department of Commerce, Community and Economic
Development. There were no comments or questions on this
fiscal note.
Co-Chair Chenault asked for discussion on fiscal note #3 by
the Department of Natural Resources.
NICO BUS, ACTING DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF NATURAL RESOURCES, explained that
fiscal note #3 requests $6,550.0 million, appropriated
earlier as a supplemental appropriation and contingent on
this legislation passing. Co-Chair Chenault requested a
breakdown of the $6,550.0 million. Mr. Bus drew attention
to the analysis at the bottom of the fiscal note.
2:30:41 PM
Representative Hawker spoke about a think tank which
analyzes the success or failure of a project. He opined
that in studying risk assessment, the sure route to failure
is to not dedicate enough funding up front. He thought $6.5
million might not be enough for such a large gas pipeline
project.
Mr. Bus related that fiscal note #4 has been replaced by a
new fiscal note by the Department of Natural Resources. He
explained that it went from $300,000 to a zero note with a
$500,000.0 million appropriation. The fiscal note prepared
by the governor's office will take care of the expense for a
state gas pipeline coordinator. Co-Chair Chenault
summarized that the fund was being moved from DNR to the
governor's office.
Representative Hawker maintained that the $500 million
fiscal note is an issue in the bill and should require more
discussion.
Co-Chair Chenault asked about page 2, the last line of the
fiscal note, which states that $300 million was appropriated
last year from the general fund to Alaska Housing Finance
Corporation for the purpose of funding capital projects. He
questioned where the other $200 million would come from.
Mr. Bus did not know.
Representative Crawford called the $500 million inducement
an investment for Alaska's future.
2:35:43 PM
Representative Gara thought the fiscal note should be an
indeterminate note. He recalled that the producers
testified that some of the $500 million inducement probably
would not be needed if the project proves successful. Co-
Chair Chenault said he understands the issue that the money
might not be needed.
Representative Hawker referred to last year's attempt at
negotiation and the cost to the state. He said he has yet
to see an analysis which he requested from DNR.
ANTONY SCOTT, COMMERCIAL ANALYST, DIVISION OF OIL AND GAS,
DEPARTMENT OF NATURAL RESOURCES, offered to provide the
analysis for Representative Hawker. He explained that the
analysis was done by the legislature's consultant EconOne
explaining the exact costs to the state from the previous
contract.
2:39:47 PM
Representative Gara commented that an analysis of the $10
billion in under taxation was summarized in a Petroleum News
article. He said he also requested information from DNR, as
well, regarding taxes relative to the world average.
Co-Chair Chenault turned attention to fiscal note #5.
JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF REVENUE, explained that the FY 07
and FY 08 costs were funded in SB 82. The costs shown are
on-going for FY 09 and beyond for consulting services and
additional internal development of economists.
Representative Gara brought up the problem of attracting
qualified applicants. Mr. Burnett noted that the fiscal
note would allow for the hiring of a couple economists at a
market-based salary, but it does not address any global
issues.
Co-Chair Chenault asked when the two positions would end.
Mr. Burnett said that discussion would take place next
session during budget procedures. Co-Chair Chenault asked
about the hiring of legal help and whether the Department of
Law would also be requesting money. Mr. Burnett responded
that the money is so that DOR can work through the Attorney
General's office to hire legal help. He did not anticipate
additional external costs.
2:44:37 PM
Co-Chair Chenault brought up fiscal note #6 by the Office of
the Governor. He noted that the position count was not
filled out on the fiscal note.
Mr. Bus reported that three full-time positions are listed
in the analysis section.
2:45:46 PM
Co-Chair Chenault turned to fiscal note #7 by the Department
of Labor and Workforce Development.
CLARK (CLICK) BISHOP, COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, explained that the fiscal note is in
response to Sec. 43.90.470 in the AGIA bill. He offered to
meet one-on-one with the committee members.
GUY BELL, ASSISTANT COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, reported that there is a section of
HB 177 that requires the development of a pipeline
employment plan and training program. The multi-year fiscal
note addresses that requirement. The years after year one
will be subject to the plan itself. He noted that the
department has worked with the university on the fiscal
note. The first piece of the FY 08 request of $6.500
million is for $4.1 million for the completion of the
pipeline training center in Fairbanks. This would be a
grant to the Alaska Works Partnership to build a facility in
Fairbanks. It is estimated that up to 13,000 Alaskans would
be trained.
Representative Gara asked why Fairbanks was selected for the
site. Commissioner Bishop explained that Fairbanks was
chosen because of location, acreage, and equipment assets.
Representative Gara wanted assurance that most of the labor
pool is from that area. Commissioner Bishop said he would
have better figures later on. He opined that Fairbanks is
the best place and the most cost effective site.
Representative Gara pointed out that many would not be from
the area. He wondered about stipends to help people
relocate there. Commissioner Bishop said in the past, room
and board has been provided. Representative Gara summarized
that he wants the most people possible trained.
2:53:52 PM
Vice Chair Stoltze thought it was a political decision to
locate the center in Fairbanks. Commissioner Bishop offered
to meet with Vice-Chair Stoltz for further discussion.
Representative Crawford related that there is a need for 600
ironworkers each year. The plan is to train 13,000
construction workers, 8,000 for the pipeline. He related
the history of employing pipeline workers. He noted the
time it takes to train workers. He wondered to what level
the workers would be trained.
Commissioner Bishop envisioned that there would a number of
apprentices and a number of journey persons to be trained.
He expected the number of workers trained to be less than
are actually needed. He said he wanted to do further
research to find out how many are really needed. He thought
it might take another year to get those numbers. He stated
that he intends to provide a better job of training than has
happened in the past. Representative Crawford hoped that
things improve next time around. He shared his experience
with the type of training needed.
3:03:14 PM
Commissioner Bishop agreed with Representative Crawford's
comments. He speculated on possible training ideas.
Representative Thomas thought that by the time the pipeline
was done, the trained workers would already be employed
otherwise. He expressed frustration with those who are
trained but have no job experience. He thought that current
pipeline maintenance workers would be ready to retire soon.
Commissioner Bishop agreed. He reported that 90 percent of
workers trained in Fairbanks got jobs. He shared his
experience with training and job placement. He maintained
that resident hire on the North Slope could be improved.
Representative Thomas suggested leaving off the word
"trades" in describing training so that it includes non-
union workers. He related a personal experience about the
difficulty of getting into a union. Commissioner Bishop
said that his daughter was not accepted into a union
program.
3:11:37 PM
Co-Chair Meyer wondered if the training should start in 2008
or be delayed until the producer is known. He thought the
producers could train their own workforce. He suggested
holding off on the training if the route goes through
Canada, due to conflicts in international training
requirements. He wondered if there was coordination of all
the various training programs.
Mr. Bell addressed the first question regarding who trains
and delivers the work force. The Department of Labor
believes that it is the state's job to invest in the
training program. Whether it is a Canadian/Alaskan project
or not, Alaskan workers would still be needed. There is
funding built in for a more comprehensive training program.
This is a capital appropriation so work can begin
immediately before the contract is entered into. Basic
training can occur and specialized workers can be delivered
to the sites. He maintained that training should begin now
to meet the current and future demand.
3:17:32 PM
Co-Chair Meyer recalled past "social impact" problems
related to so many pipeline workers employed on the
pipeline. He wondered if anyone was considering that aspect
of a gas pipeline project. Commissioner Bishop replied that
he has asked that question, but needs to follow up on it.
Mr. Bell showed a graph that reflects a spike in employment
during the first pipeline project and maintained that the
same spike would not happen this time.
Co-Chair Meyer requested information about Canadian hiring
requirements. Commissioner Bishop said he does not have
that information yet.
Co-Chair Chenault asked if it was Alaskan workers who made
up the spike. Mr. Bell replied that the spike depicts the
total construction employment, both Alaskan and non-Alaskan.
He said that the permanent fund statistics could provide
information about how many of the workers were Alaskans.
Commissioner Bishop informed the committed that 43 percent
were Alaska hire.
3:21:30 PM
Representative Gara asked if Commissioner Galvin was
committed to the Fairbanks training center location.
Commissioner Bishop replied that there are five components;
Fairbanks is only one. There will also be regional training
centers, high school programs, university systems, and
others.
Representative Gara recalled last year's discussion on
Alaska hire. He thought there would be a "boom/bust"
economy unless there is Alaskan hire. He wanted assurance
that the maximum number of people would use the Fairbanks
facility. He argued for relocating that center.
Commissioner Bishop had no further comment.
Co-Chair Chenault commented that the training center is only
one aspect of the training program.
Representative Thomas noted that vocational technical
programs need to start at the high school level. Mr. Bell
replied that there is funding for regional training centers
in the state. There are some really good models shared by
secondary and post-secondary students.
3:27:28 PM
Mr. Bell returned to the analysis of fiscal note #7. He
pointed out that there is a need for detailed planning and
to look at workforce strategies, training facilities
assessments, methods to improve Alaska hire, evaluation of
what should be included in RFP's, and other activities
overseen by the commissioner. There needs to be a skills
gap analysis and improvements made to the web-based labor
exchange system. There is an investment for direct training
and for engineering and construction management programs at
the University of Alaska.
Representative Kelly asked if there are Alaskans to fill the
jobs and if the training would be timed based on need. Mr.
Bell reported that the skills gap analysis would be done to
determine what is needed. Alaska's unemployment rate is
higher than the national average by 2%.
Representative Kelly asked about the breakdown between union
and non-union. Mr. Bell promised to provide data.
3:34:21 PM
PAT PITNEY, VICE PRESIDENT, BUDGET AND PLANNING, UNIVERSITY
OF ALASKA, ANCHORAGE, noted that the university would
provide training for the engineering program expansion at
the University of Anchorage. Juneau entry level students
would be able to transfer to Anchorage and Fairbanks. The
intent is to train individuals for jobs beyond the
construction of the gas pipeline.
In response to a question by Representative Kelly, Ms.
Pitney noted that their engineering programs are bursting at
the seams. There are nearly 140 applicants for the current
fiscal year. There is a higher response rate by the under-
employed as well as from high school students and transfers.
Construction management is industry led. As a state, there
are plenty of people looking for the right jobs. The
availability of training programs at the right locations is
the issue.
3:38:49 PM
ROBERT LANG, UNIVERSITY OF ALASKA, ANCHORAGE, noted that he
was available for questions.
JANE GEHLER, UNIVERSITY OF ALASKA, ANCHORAGE, reported that
between 50 - 70 graduates a year would be reached by the
programs over the next two years.
JEFFERY CALLAHAN, PROFESSOR, CONSTRUCTION AND DESIGN
TECHNOLOGY, UNIVERSITY OF ALASKA, ANCHORAGE, related that
the construction management program is a relatively new
degree program. He observed that there is movement out of
the trades into management positions.
3:40:57 PM
Mr. Bell concluded discussion of fiscal note #7 by stating
that a purchase of a rock drill would enhance training
delivery in Anchorage at the Alaska Laborers Training
School.
Mr. Bell noted that the out years are somewhat speculative.
It would involve more intense review in investment in
training infrastructure, direct training program
development, and continuation of the university's
engineering and construction management programs. The
estimation is in broad strokes. Co-Chair Chenault requested
that the department return to the committee if the pipeline
is not funded. Mr. Bell said they would.
CSHB 177 (RES) was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 3:43 PM.
| Document Name | Date/Time | Subjects |
|---|