Legislature(2005 - 2006)BELTZ 211
04/11/2006 01:30 PM LABOR & COMMERCE
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* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
1:53:20 PM SB 309-CONSTR. TRAINING GRANT;UNEMPLOYMENT COMP. CHAIR BUNDE announced CSSB 309(L&C), Version I, to be up for consideration. SENATOR GENE THERRIAULT, sponsor of SB 309, said that questions were generated at the last hearing about the limitations of the apprenticeship program and who sets them. He explained: Per the U.S. Department of Labor, nationally, there are 937 apprenticeship occupations approved. In Alaska there are 275 employer-sponsors with registered apprenticeship programs with 1,900 apprentices. There are 71 occupations in Alaska, which have apprentices. Eighty-five percent of the programs are non-union, single employers and 15 percent are union-joint apprenticeship training committee programs, which are JATC. Eighty-five percent of the total apprentices are in the union, JATCs. In 2003, the Alaska Legislature enacted a law requiring an individual to be in a registered apprenticeship program in order to obtain a training card for plumber, electrician and power-line occupations. This caused an increase in the programs and apprenticeships in those fields. SENATOR THERRIAULT said there were questions last time about incorporating a voucher program and he found that the state currently offers something fairly similar to a voucher program called the Individual Training Accounts (ATC). He explained that ATCs are established in a partnership consisting of the job center case manager, the worker and the trainer. The worker can freely choose between a union or non-union training provider and the subsidies that were paid over the last two fiscal years to employers totaled $330,000. He said that more questions were raised about other salaries and types of subsidies that exist under the STEP and other state programs, if any. 1:56:41 PM GREG O'CLARAY, Commissioner, Department of Labor and Workforce Development (DOLWD), explained that the state has many different programs - depending on the applicant. Employers can approach the DOLWD to offset some costs associated with the training of new workers - up to 50 percent of the wage over a defined period of time. The efficiencies of the employer go down when they spend time training new workers. CHAIR BUNDE said he heard questions about accountability and how the state knows funds are being used for their intended purposes. COMMISSION O'CLARAY responded that the funds are monitored very closely. In many cases, individuals have a case manager. The grant program has managers that monitor performance criteria. CHAIR BUNDE related other concerns that funds in this bill would not be distributed fairly between union and non-union entities. SENATOR THERRIAULT replied that he heard from the Associated Builders and Contractors of Alaska (ABC) that the problem was finding employers who were willing to actually take on a trainee who has lower productivity and who also detracts from an experienced worker while he is sharing his skills - although, he said, the state has some programs that help the employer with that salary. He asked the Department if the current system was at its capacity and he was told that those subsidies were limited by the overall annual training funds made available by the state, the lifetime limits and costs per participant, the limits set by federal regulations and the number of employers who are willing to share the on-the-job training type of agreement with an individual. He related that ABC said it was not really interested in being a grants recipient and would rather have the individual employer receive the money. Another question was brought up regarding whether individual contractors who belong to the ABC should be able to avail themselves of the department's funds and other support services for training directly without a union umbrella organization to apply for them. Senator Therriault found that they are currently able to do that. He said one of the criticisms is that the proposed program is run through a union umbrella organization, but yet the ABC didn't want to be a grant recipient, itself - and rather wanted the individual employer or worker to get assistance if they choose to do the training through some other mechanism. It appears that the voucher system was already in place, but he was open to discussing more funding. 2:01:56 PM SENATOR SEEKINS remarked that the apprentice-journeymen ratio used to be two journeymen to one apprentice and asked Commissioner O'Claray if that was still the case. COMMISSIONER O'CLARAY answered that the Federal Bureau of Apprenticeship Training adopted the ratio of one to one and one to three for each apprentice after the first apprentice until recently. He just received word that it was now approving apprenticeship ratios of one-to-one in all its pre-approved programs in Alaska - in recognition that more slots need to be opened. 2:03:43 PM SENATOR SEEKINS said he thought that was an improvement. He said the one-to-one apprenticeship program in the automotive industry at the University of Alaska had been very successful. 2:04:27 PM SENATOR THERRIAULT pointed out that if this funding mechanism were put in place, it would take pressure off the STEP program funding. He referenced an ABC suggestion to allocate 30 percent of the funds to pre-apprenticeship training in high schools where basic math and reading and writing skills were needed. ABC didn't want the money used for capital projects or to purchase capital equipment. However, the University would say it is not equipped to do some of the training where access to heavy equipment is needed and Senator Therriault agreed that there is probably a need to purchase some of that equipment. He thought the bill hit all the points between the interplay of the proposed program and the STEP program. CHAIR BUNDE cautioned that Department of Labor data indicated the smallest part of Alaska's population in the next 20 years is predicted to be the 30 to 50-year olds. The largest part will be zero to five and 50 to 85. 2:07:43 PM SENATOR SEEKINS asked if language could be added to direct the money to the DOLWD for a grant to AWP or another organization determined by the commissioner to be able to provide similar training - still meeting stringent requirements. SENATOR THERRIAULT replied he was open to that concept and added that the University of Alaska supported the bill. 2:10:19 PM WENDY REDMAN, Vice President, University Relations, Statewide of Alaska University System, said she has the vocation and work training programs under her aegis. The University initiated a statewide forum with both the construction and oil and gas industries to try and get a handle on where the jobs were over the course of the next decade. She said, "So, I have a really good and scary understanding of the incredible needs that we have to do job training in the state." MS. REDMAN said that Alaska Works is a very valuable partner for the University and that it didn't have a lot of capacity particularly in the construction area - Juneau has a small construction technology program and a small one runs in rural Alaska. Some training is done in Fairbanks through the Hutchison Career Center in collaboration with the unions. Faculty is shared back and forth and union or non-union has never been an issue. The University can't function that way. Alaska Works has helped the University write a grant for development of construction training in rural Alaska that it has pulled out of, but the program has continued to be successful. She emphasized the need the state has to make an investment in this kind of training and strongly felt that the funding needed to go through the formal apprenticeship-training program. She hoped that ABC would do more training because funding could be tripled and it still would not be enough to meet the need a gas line would create. She said the construction industry alone is down about 3,000 workers from what it needs and a big block right now is in the capacity of the apprenticeship programs. MS. REDMAN said she was sensitive to the input problem. People come out of high school or drop out thinking they can get into an apprenticeship program, but it takes higher qualifications to get into most of the apprenticeship programs than it does to get into the University. It is an open admission institution and the Plumbers and Pipefitters require college algebra and would like people to have calculus, too. The University has been working with the schools and others to get funding for the Youth Initiative and she has put in place a program called Preparation for the Trades. The construction math program is particularly popular right now and that provides remedial work to get people ready to go into the trades. She concluded: So, anything we can put into the high schools to elevate the level of academic expertise that the kids have coming out so that they are ready to go into these jobs will be money well spent, as well. I strongly support it; I recognize some of the concerns that you were talking about earlier, but I think there are other options to deal with alternative training, the salary subsidies - that was the first time I'd heard about that today - CHAIR BUNDE noted there were no questions of Ms. Redman and began taking other testimony. 2:14:37 PM REBECCA LOGAN, President, Associated Builders and Contractors of Alaska (ABC), opposed SB 309. She said that most of the training for Alaska's workforce is done outside of the federally registered apprenticeship programs and those are the programs that are getting all the funding, but can't meet the demand. On the issue of Alaska Works being the organization that receives the money, it is a union-funded program and she has a problem with that and felt the bill provided ample opportunity to divide the money in a fair way. 2:16:41 PM CHAIR BUNDE asked if Senator Therriault was accurate in saying that ABC didn't want to set up a competing organization to Alaska Works. MS. LOGAN replied that it is more accurate to say that ABC would be interested in being a conduit for giving money to employers who are interested in training. 2:17:13 PM SENATOR BEN STEVENS asked if any of the ABC programs participate in the STEP program at this point. MS. LOGAN answered that ABC applied once, but was denied. She informed them that last year the STEP program had $1.2 million available to the construction industry for training and $1.1 million of it went to union apprenticeship programs with the remainder going to an independent employer and to NIT. SENATOR BEN STEVENS asked if she knew of nonunion training programs receiving public funds. MS. LOGAN replied no even though ABC runs a federally registered apprenticeship program in ten different trades. Its biggest push was in the electrical and mechanical trades because of the legal requirement for a fitness card, which the employers pay for. She was not aware of another nonunion program in the construction industry that received funds for apprenticeships. 2:18:37 PM DICK CATTANACH, Associated General Contractors (AGC), supported SB 309 saying AGC has long recognized the significant labor shortage facing the state and that half the trade workers would be lost over the next decade. This comes at a time when fewer people are choosing to enter the construction industry. All kinds of strategies are being tried to appeal to the younger workers. Many kids leave high school and they are ill prepared to be apprentices because they don't have the basic skills. When he went to school, a student would go through a shop class and schools would provide a basic feeding ground into construction. That isn't available because schools have backed away from shop classes and students don't have the skills to qualify getting into an apprenticeship program. The problem is bigger than industry can deal with on its own. CHAIR BUNDE remarked that he thought he shared a goal with Mr. Cattanach of recognizing and promoting the dignity of working with one's hands. They have both found perhaps a basic lack of interest in work ethic. MR. CATTANACH related how a survey of Fairbanks students from ages 17 to 25 that indicated a lot of people knew about construction trades, but because the work was too hard, they were going to get a job in the government. Construction represents about 6 percent of the Alaska workforce and it has to capture over 20 percent of the high school graduates. "It's a severe labor problem and it's not just construction; it's everybody. We need a trained workforce and this is a good first step." 2:24:04 PM SENATOR BEN STEVENS asked him to explain the public policy of local hire that prevents importation of workers that he referred to earlier. MR. CATTANACH answered that the Administration has a policy of Alaskan jobs for Alaskans and it will fine employers who exceed 10 percent nonresident hire. Construction companies are forced to file certified payrolls and his members get fined regularly for not meeting those goals. Between 16 and 20 percent of AGC's workforce is from outside are currently violating public policy. CHAIR BUNDE asked if being in Alaska one month would qualify someone as a resident. MR. CATTANACH replied that the state uses the definition of qualifying for a Permanent Fund dividend. SENATOR BEN STEVENS asked if Mr. Cattanach mentioned that Alaska Works Partnership trades focuses on vocations that incorporate 6 percent of the Alaskan workforce. MR. CATTANACH indicated that was correct. SENATOR BEN STEVENS said that the Unemployment Insurance (UI) payment applies to 100 percent of the workforce. MR. CATTANACH replied that is correct, but what is missing in his comments is that the Workforce Development Board and the Department of Labor have identified construction as the number- one priority for the state. Construction and health care are the two greatest needs the state has in the next decade. "We need to do something for both of those areas if we are going to be able to deal with it." He elaborated that when Alaska built the oil pipeline, it was able to import a lot of workers. The wages and hours were attractive enough to attract a lot of people. Now, construction labor is short nationwide and it will be harder to import workers. 2:27:41 PM SENATOR SEEKINS proposed an amendment on page 2, line 12, to delete "successor" and on page 2, lines 12 and 13 to delete "the principal purpose which is providing" and insert "the commissioner has determined is able to successfully provide" after "nonprofit corporation". SENATOR ELLIS objected saying the system works fine now and the change didn't seem necessary. SENATOR SEEKINS replied that he supported the bill's objective of training people to fill open jobs and he agreed that the current system was working. His intent was to allow other organizations to be able to set up a similar system to have the ability to produce the same kind of results and leave that discretion up to the commissioner. SENATOR ELLIS asked what qualifications the commissioner would use to make such a determination. SENATOR SEEKINS remembered back when he was in the construction trade and had a journeyman's card in the carpenter's union and was a certified mill rate welder, he had to meet standards of performance and needed to take tests on book learning and had to perform to a particular skill level. He thought the commissioner could successfully quantify similar standards. SENATOR ELLIS asked if the commissioner would have to determine a new organization to be equal to the existing Alaska Works partnership in terms of performance, standards and expertise. SENATOR SEEKINS replied yes. SENATOR THERRIAULT commented that in reality Alaska Works is probably going to be the odds-on favorite, but if another group could meet the same standards, not precluding them from the get- go was acceptable to him. As long as it could promise to meet the same objectives and live by Subsection (e) and deliver the product each year, it would be eligible. CHAIR BUNDE asked if the language was permissive. SENATOR THERRIAULT replied that it was permissive, but Alaska Works has already been doing it for a number of years and would be the odds-on favorite for a majority of the funds. 2:33:36 PM CHAIR BUNDE called for a vote on Amendment 1. Senators Ellis and Davis voted nay; Senators Ben Stevens and Seekins and Chair Bunde voted yea; so, Amendment 1 was adopted. 2:34:07 PM SENATOR SEEKINS moved to report CSSB 309(L&C) from committee with individual recommendations. 2:34:35 PM SENATOR BEN STEVENS objected to say he agreed with the vision of more individuals being trained in the trades in anticipation of the project that is mentioned on page 2, lines 15 and 16, but from testimony on other pieces of legislation that have come through the committee, he found it odd that those entities that were trying to set up a training program for future jobs were not promoting the project that creates the future jobs. He wanted to see the representatives of the trade unions come forward and say they support the construction of the gas pipeline in order for him to support this bill - especially if they would be using funds that are generated from other workers across the state. He summarized: If there is a "no" decision on the pipeline, there is going to be no need for this program - at the level that they are talking about - granted we all understand there's a need for the aging workforce.... With that, Mr. Chairman, I'll remove my objection. Senators Davis, Seekins, Ellis, Ben Stevens and Chair Bunde voted yea; and CSSB 309(L&C) was reported from committee.