Legislature(2005 - 2006)BELTZ 211

04/11/2006 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
Heard & Held
Board of Chiropractic Examiners
Jeffrey Garness
Bills Previously Heard/Scheduled
Including But Not Limited to:
Heard & Held
Moved CSSB 312(L&C) Out of Committee
Moved CSSB 309(L&C) Out of Committee
1:53:20 PM                                                                                                                    
        SB 309-CONSTR. TRAINING GRANT;UNEMPLOYMENT COMP.                                                                    
CHAIR  BUNDE announced  CSSB 309(L&C),  Version I,  to be  up for                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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.                                                                       

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