Legislature(2013 - 2014)BARNES 124
03/03/2014 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Presentation: "effects of the Lng Project on Employment in Alaska" by Commissioner Dianne Blumer. | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 3, 2014
3:24 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Lora Reinbold, Vice Chair
Representative Mike Chenault
Representative Charisse Millett
Representative Andy Josephson
MEMBERS ABSENT
Representative Bob Herron
Representative Dan Saddler
Representative Craig Johnson
COMMITTEE CALENDAR
PRESENTATION: "EFFECTS OF THE LNG PROJECT ON EMPLOYMENT IN
ALASKA" BY COMMISSIONER DIANNE BLUMER.
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DIANNE BLUMER, Commissioner
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Provided a presentation on the effects of
the LNG Project on employment in Alaska.
WANETTA AYERS, Director
Division of Business Partnership
Department of Labor & Workforce Development
Anchorage, Alaska
POSITION STATEMENT: Presented a presentation on the effects of
the Alaska LNG Project on employment in Alaska.
ACTION NARRATIVE
3:24:33 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:24 p.m. Representatives
Millett, Josephson, Reinbold, Chenault, and Olson were present
at the call to order.
^Presentation: "Effects of the LNG Project on Employment in
Alaska" by Commissioner Dianne Blumer.
Presentation: "Effects of the LNG Project on Employment in
Alaska" by Commissioner Dianne Blumer
3:24:40 PM
CHAIR OLSON announced that the only order of business would be a
Presentation: "Effects of the LNG Project on Employment in
Alaska" by Commissioner Dianne Blumer.
3:25:01 PM
DIANNE BLUMER, Commissioner, Department of Labor & Workforce
Development (DLWD), offered to provide a quick presentation on
developing a qualified workforce, especially in light of some of
the big projects in Alaska. She indicated she would cover the
oil and gas component, and Wanetta Ayers will discuss developing
the workforce overall. The Alaska statutes require the
department to provide the state's oil and gas training plan.
She indicated that it is necessary to work with industry in
order to be cohesive and successful. The first plan was
developed in 2008 for the Alaska Gasline Inducement Act (AGIA),
which became the oil and gas sector workforce development plan.
While the original 111 occupations identified in the workforce
development plan represent a good start, the department decided
it needed to hone in on the high-need occupational industries.
She clarified that other industries are not less important but
the department's focus is on oil and gas.
3:26:35 PM
COMMISSIONER BLUMER said the industry steering committee met
throughout the summer of 2013 and has continued to provide
comment and guidance as it works on a draft plan. The
department has vetted the draft plan with key industry
associations, labor unions, apprentice-training trusts, and
other organizations and has solicited additional comments. She
said the department believes it has done a good job marketing
the plan and soliciting input from all of the stakeholders. The
plan was presented to the Alaska Workforce Development
Investment Board (AWIB) and will be presented again to the board
in its final form. The draft document was distributed to
industry participants on February 21, 2014, for an informal 30-
day public comment period, and DLWD will review comments and
seek additional review by the industry steering committee prior
to completing the plan by the end of March 2014. The plan
identifies 61 occupations across five oil and gas industry
priority career clusters, including natural resources, architect
and construction, manufacturing, science, technology,
engineering, math (STEM), transportation logistics, and
distribution.
3:28:10 PM
COMMISSIONER BLUMER said the draft plan recommends an industry
alliance to lead the implementation of the plan, developing its
outreach efforts to educate students about oil and gas careers,
and development of curriculum at the secondary and post-
secondary levels for each of the five priority clusters and
monitoring major projects to determine the best timing for
training initiatives. She noted the difficulty in putting
together a plan prior to the beginning of the project, although
DLWD has done so and has developed a timeline for training.
3:29:08 PM
WANETTA AYERS, Director, Division of Business Partnership,
Department of Labor & Workforce Development, said she understood
the committee's interest in how the state is preparing for major
economic opportunities under consideration this legislative
session. She has approached this from the employers' standpoint
of workforce availability and preparedness. She explained that
workforce development is about anticipating employers' needs and
figuring out how to fine tune the education and training systems
to deliver that well-qualified workforce.
3:29:56 PM
MS. AYERS turned to a slide entitled, "Got Talent?" Many
employers find that even if they have qualified candidates, the
candidates have numerous options, some of which are global.
This puts talent in the driver's seat with respect to choices in
the workplace and this impacts Alaska. She said that Mark
Lautman's article, When the Boomers Bail, identifies trends and
global forces that will impact workforce availability and
preparedness in the coming decades. This means the availability
of a qualified workforce will be the defining factor for
economic success in the future.
3:30:49 PM
MS. AYERS suggested that one in five jobs in Alaska require a
college degree [slide 3], and about 60 percent of all jobs in
the next decade will require more than a high school diploma.
MS. AYERS reviewed the postsecondary education outcomes for
Alaska high school graduates and GED recipients as of 2012
[slide 4]. She indicated that postsecondary outcomes increase
over time as students move away from their high school
graduation. Of the 7,000 graduates in the 2004-2005 class, 20
percent receive a college degree 7 years out from high school
and approximately 22 percent receive no additional training or
education. Nearly 42 percent have had some college education.
She related that the most vulnerable group falls into the 22
percent without any additional training, which are highly
vulnerable to be unemployed or underemployed. She expressed
concern that some may not have the technical skills needed and
this is where workforce development plays a critical role. As a
society the public education system provides the talent, and the
workforce development system is a companion that helps direct
students, jobseekers, underemployed, and the unemployed into
career pathways that will lead to a living wage.
3:33:34 PM
MS. AYERS discussed how the workforce development system invests
in "Alaska's Talent Pipeline" by increasing the capacity for
career and technical education across the state, providing adult
and incumbent worker training, providing industry specific
training, and working to ensure youth development [slide 6].
MS. AYERS turned to the Alaska Technical Vocational Education
Program [slide 8]. The department has two funds focused on this
purpose, including the Technical Vocational Education Program
(TVEP) and the Career and Technical Education Grants. First,
the legislature designated specific facilities and programs to
receive capacity-building and operating funds through TVEP. The
TVEP fund is a designated fund with 0.15 percent employee
contribution to the unemployment insurance trust. She reported
that in FY 2014, the department has had six grantees issued
through the Division of Business Partnerships. There are other
grantees that receive their funds directly or through another
department. Of those six grantees, "we have $4.3 million in
awards, and we're projecting that there will be over 3,336
Alaskans that will receive training or some level of secondary
or postsecondary education as a result." Governor Parnell has
proposed in HB 278 to reauthorize the TVEP program for 10 years
and strengthen it by requiring dual credits to establish
stronger links between secondary education and post-secondary
job training.
3:35:13 PM
MS. AYERS stated that the second fund is the Career and
Technical Education Grants [slide 9]. She explained that this
program funds strategies and actions identified in the Alaska
Career and Technical Education Plan. It focuses specifically on
developing career and technical education curriculum and
training capacity. Most of the grantees under this fund are
school districts or non-profit training providers funded with a
general fund appropriation. This year 15 grantees received
competitively-awarded grants of $610 thousand in awards, and
they anticipate providing 1,838 students with additional career
and technical education access.
3:36:08 PM
MS. AYERS turned to adult and incumbent worker training,
provided through two funds: the State Training and Employment
Program (STEP) and the Workforce Investment Act [slide 11]. The
STEP program represents the largest training fund in the state.
The focus of the STEP is to provide accessible job training for
employers, employees, and future workers and to reduce the
demand for unemployment benefits. The funding source is the
designated general fund, with one-tenth of a percent of the
employees' contributions to the unemployment insurance trust.
In FY 2014, 37 grantees were competitively awarded $5.9 million
in grants, and the department anticipates 3,403 Alaskans will
receive training. She provided examples, such as commercial
driver training, noting that demand will continue to be high as
the state approaches large projects. Additionally, one grantee
is focused on rural building maintenance and weatherization, and
plumbers and steamfitters use the STEP funds for apprenticeship
and journeyman training.
3:37:36 PM
MS. AYERS turned to the second fund for the adult and incumbent
workers, the Workforce Investment Act (WIA). These funds are
federal formula funds allocated to the states and rather than
issuing grants individuals are issued training allowances or
ITAs. This fiscal year, the state anticipates $2.9 million in
training awards that will impact over 3,150 Alaskan trainees.
The goal is to help people achieve occupational skills to help
them make a living wage. The WIA imposes eligibility
requirements. Individuals would go to one of the 21 job centers
and a determination would be made as to whether the individuals
are eligible for an ITA.
3:38:38 PM
MS. AYERS turned to industry specific training [slides 13-14].
At times, the U.S. Department of Labor has asked Alaska to
administer targeted training funds. First, she discussed the
Alaska Oil and Gas Occupations Training Funds, which is an
unrestricted general fund (UFG) appropriation specifically to
support the 2008 oil and gas workforce development plan. In
2014, 10 grants were competitively awarded totaling $424,000,
and the department anticipates 562 Alaskans trained as a result.
3:39:24 PM
REPRESENTATIVE CHENAULT asked for more detail on the training
encompassed in the grants.
MS. AYERS, with respect to the oil and gas fund, reported that
the Associated Builders and Contractors instituted a distance
learning program covering occupations including security,
electrical, plumbers, pipefitters, and sheet metal workers.
Additionally, the UAA received a grant to provide an eight-week
project management intensive, specifically to help sanction
projects moving forward and making an economic case for an oil
and gas project. Another grantee will provide training for
aerial remote sensing to track marine mammal migration patterns
for North Slope offshore oil development. She stated that the
10 grantees cover occupations ranging from basic camp services
to project management engineering focus.
3:40:50 PM
MS. AYERS said the department has been working on the Alaska
Workforce Development Plan, which was put together in
conjunction with an industry steering committee. The plan has
been released for informal public comment, and it prioritizes
long-term legacy jobs and identifies an action agenda to
continue to advance the oil and gas industry through workforce
preparedness. She turned to the Denali Training Fund, [slide
15]. This fund consists of federal funds issued to the Denali
Commission. The commission works with the department to field
and administer the grants issued under the Denali Training Fund.
They are largely focused on occupations that will support
infrastructure, health care facilities, or energy projects
funded by the Denali Commission. This may be the last year due
to reduction in federal funds issued to the Denali Commission.
In 2014, six grants were awarded totaling $810 thousand, and the
department anticipates 117 Alaskans to be trained.
3:42:16 PM
MS. AYERS turned to the Cast and Crew Advancement [slide 16.]
She explained that this is a legislatively designated capital
grant. The state has offered film tax credits to encourage film
and television production in Alaska. Additional workforce
training was needed in order to maximize the state's economic
return. In 2014, six competitively-awarded grants totaled $249
thousand with seven grants awarded and six remaining.
Additionally, a portion was set aside for individual training
allowances (ITA) through job centers.
3:43:04 PM
REPRESENTATIVE MILLETT suggested that a bill is before the
legislature [HB 112] that would "kill" the film tax credit. She
asked what will happen to the grantees and the funding.
MS. AYERS offered her belief that this year is the last year for
the funding. The state would have an obligation to grantees,
although it is possible some funds will be rescinded for ITA;
however, she was unsure.
3:43:57 PM
REPRESENTATIVE MILLETT asked how much of the $249,000 has been
encumbered to date.
MS. AYERS answered that about half the funds have been disbursed
to grantees and half to individuals training allowances. She
estimated that roughly half the funding will be split between
the two.
3:44:28 PM
MS. AYERS turned to the Alaska Construction Academy, which is a
legislative designated grant with the Construction Education
Foundation as the single grantee. The total fund is $3.2
million for the purpose of promoting an understanding of the
construction trades. The funds assist students to learn how to
apply for registered apprenticeships or postsecondary education
that will lead to a construction industry career. This effort
does not provide training but it does provide for outreach that
targets potential workers from middle and senior high school
along with some adult training. She anticipated that
approximately 4,800 students will receive information on how to
access the construction industry jobs this year.
3:45:33 PM
REPRESENTATIVE REINBOLD asked who receives the funding. She
said she has had questions on the Alaska Construction Academy.
MS. AYERS answered that the department does not divvy up the
funds. The funds are legislatively-designated funds to one
individual grantee, the "Construction Education Foundation."
She said this grant is not competitive but is similar to TVEP,
in that the legislature identified the grantee and asked the
department to administer it.
CHAIR OLSON remarked that one academy is located on the Kenai
Peninsula that committee members could tour.
3:46:33 PM
MS. AYERS discussed youth development [slide 18]. One of the
basic tenets of workforce development is to reach students and
students at risk of not completing school. She reported that
young people often engage in risky behavior if they cannot
envision a future for themselves. The youth development helps
identify and envision what the youth's future could look like.
3:47:18 PM
MS. AYERS stated that two funds reach out to youth to encourage
school completion, promote related work experience, and other
activities that help youth plan and create their future. She
reported that the Alaska Youth First Fund has focused on
assisting youth with career awareness and information,
employability skills, work maturity skills, paid and non-paid
work experience, applied academic training, and educator
externships. The source of funding is unrestricted general fund
appropriations. In FY 14, the department had 18 competitively-
awarded grants for a total of $1.9 million with an anticipated
17,437 students being served. However, Alaska Youth First has
been slated to receive a $2.4 million reduction [slide 20]. She
highlighted that many activities will be reduced, including
career awareness in classrooms, workplaces, and neighborhoods.
In some instances, the funding assists students to identify a
need in the community and create a career service project or
short-term job to meet the need. As students mature, they take
the WorkKeys exam, obtain a work-ready certificate and work to
receive occupational certificates that will help them be "job
ready" after high school. Additionally, career development
works to identify the postsecondary training options, such as
military service, apprenticeships, and trade or technical
schools like AVTEC.
3:49:41 PM
REPRESENTATIVE MILLETT stated that she also serves on the House
Labor & Commerce Finance Subcommittee and this subcommittee
removed the program. She said the committee held discussions
with the DLWD to try to find other ways to reduce overall
funding since this program is a pretty powerful program.
MS. AYERS, in response to a question, indicated the program has
been in effect for nine years.
REPRESENTATIVE MILLETT acknowledged that if the cuts are
retained that schools will not provide any career counseling.
She wanted to be sure the committee was aware of the program,
which was removed in "one fell swoop" in the subcommittee.
3:50:36 PM
REPRESENTATIVE JOSEPHSON asked for clarification on how the
proposed cuts came about.
REPRESENTATIVE MILLETT answered that someone on the House
Finance subcommittee made the recommendation to cut this
program.
3:50:57 PM
REPRESENTATIVE JOSEPHSON asked what the governor requested in
the budget.
MS. AYERS answered that the governor's budget fully funded the
program. She reiterated the program consists of $2.4 million in
funds with some salaries and grant administration costs included
in the program.
3:51:30 PM
MS. AYERS turned to the WIA program in youth development [slide
21]. These funds serve low-income youth ages 14-21. Some
assessment activities are performed by the ten FY 2014 grantees
receiving $1.4 million in awards. An estimated 3,150 youth will
be served, and these are federal formula funds to the states.
She concluded that this provides members with an overview of the
workforce development system, but this presentation did not
cover all of the department's activities, such as assistance to
transition veterans into jobs, prisoner re-entry, assisting
people with disabilities, and vocational rehabilitation.
3:52:51 PM
MS. AYERS reviewed the project outlook [slide 22.] She
explained this slide highlights some of the major projects and
how the industry steering committee considered the workforce
development for oil and gas needs. She listed some projects,
including the Alaska LNG project, the instate gasline, and the
Donlin Gold project. She pointed out that dozens of other
mining projects will have significant demand on Alaska's
workforce, and public infrastructure projects. This chart
depicts the projects and the timing with the focus of the oil
and gas plan to cover through 2018. She emphasized the
importance of using funds to time projects appropriately so the
workforce is ready at the time employers need them. These
projects will demand thousands of qualified workers and many are
just entering high school right now. She emphasized the
importance to build and optimize the talent pipeline is the
objective of the workforce development system. The state will
be challenged to meet demands but will work to ensure that
Alaskans are prepared and well qualified to take lead positions
and legacy jobs that will lead to long-term careers and
productive lives in Alaska.
3:54:26 PM
CHAIR OLSON looked at Point Thomson on the chart and suggested
the number of jobs is closer to 450. He surmised that some of
the other estimates may be conservative estimates.
MS. AYERS answered that the figures "look a little light" since
they are from derived from the project operator perspective and
are not necessarily inclusive of all the contracting associated
with the projects.
3:55:08 PM
REPRESENTATIVE MILLETT recalled touring the Pipeline Training
Center in Anchorage. She asked whether funding comes from the
Department of Labor & Workforce Development.
COMMISSIONER BLUMER answered that the Pipeline Training Center
applies for some competitive grants. She was unsure of the
business model.
3:55:50 PM
REPRESENTATIVE MILLETT noticed that it seems like the center is
only offering one class per year.
COMMISSIONER BLUMER responded that the center has been working
with the university on some process technical training. For
example, the center recently opened a 16-day welding shop
course. She recalled that the center is also working on some
high school training programs for credit. She offered to
provide a full list to the committee.
3:57:10 PM
REPRESENTATIVE JOSEPHSON asked for any impacts on housing for
the Alaska LNG construction.
CHAIR OLSON noted [housing and training] problems also occurred
with Trans-Alaska Pipeline System (TAPS). He lauded the
department for "looking forward" by anticipating construction
needs by having a number of people trained and ready to fill the
[proposed Alaska LNG and instate pipeline] jobs.
3:58:22 PM
REPRESENTATIVE CHENAULT asked for figures on how many people
have successfully obtained work after completing the programs.
MS. AYERS responded the department can report on the number of
people employed within one year of their training and their wage
outcome. She explained that the ATVEP or STEP may be longer
term projections so the department does not have that
information yet. She reported that when the 2008 plan was
developed that the state received a $7.5 million federal
appropriation. She also reported that three years out 80
percent of the individuals were working in Alaska and 1,600-
1,700 trained individuals were earning a total of $30 million in
wages prior to training and $43 million after training. She
said this represents a significant increase. She stated that
some of the front line supervisory positions will be more
advanced positions in a gasline project. In response to a
question, she recalled that 1,600 to 1,700 total workers were
trained.
4:00:41 PM
REPRESENTATIVE CHENAULT asked whether the DLWD is providing
assistance for workers with the closure of the Flint Hills
refinery.
COMMISSIONER BLUMER answered that the department has a rapid
response team that works through the job service centers. The
"rapid resource" staff has reached out to Flint Hills refinery
employees. The department offers job matching services and has
been working with other industry employers who have expressed an
interest in hiring Flint Hills' refinery workers. The
department has requested information on employees slated for
layoff and will work to contact each person.
4:01:48 PM
CHAIR OLSON asked whether the department has a rough estimate on
the number of people leaving Fairbanks due to the closure. He
recalled a number of people planned on leaving the Kenai
Peninsula when the Agrium plant closed; however, the number who
actually left was fewer than anticipated.
COMMISSIONER BLUMER answered that the Flint Hills refinery has
not provided a solid number of employees, but she offered to
provide it to the committee once she has the figures.
4:02:26 PM
CHAIR OLSON lauded the DLWD's team in Kenai. He said they did
an excellent job when the Agrium plant closed.
4:02:40 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:02 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOLWD Presentation re LNG Project 03-03-2014.pdf |
HL&C 3/3/2014 3:15:00 PM |
DOLWD Presentation on developing a qualified workforce 3-3-14 |