Legislature(2015 - 2016)BELTZ 105 (TSBldg)

01/29/2015 01:30 PM Senate LABOR & COMMERCE


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01:29:02 PM Start
01:30:04 PM Overview: Department of Labor and Workforce Development (dolwd)
02:14:10 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: Department of Labor & Workforce TELECONFERENCED
Development
Commissioner Heidi Drygas
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                        January 29, 2015                                                                                        
                           1:29 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Mia Costello, Chair                                                                                                     
Senator Cathy Giessel, Vice Chair                                                                                               
Senator Gary Stevens                                                                                                            
Senator Johnny Ellis                                                                                                            
Senator Kevin Meyer                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW: DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT (DOLWD)                                                                 
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
HEIDI DRYGAS, Commissioner Designee                                                                                             
Department of Labor and Workforce Development (DOLWD)                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Delivered an overview of the Department of                                                                
Labor and Workforce Development.                                                                                                
                                                                                                                                
ANNA LATHAM, Legislative Liaison                                                                                                
Department of Labor and Workforce Development (DOLWD)                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered a question during the overview.                                                                  
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:29:02 PM                                                                                                                    
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing                                                              
Committee meeting to order at 1:29 p.m. Present at the call to                                                                  
order were Senators Stevens, Ellis,  Giessel, and Chair Costello.                                                               
Senator Meyer arrived soon thereafter.                                                                                          
                                                                                                                                
^OVERVIEW: Department of Labor and Workforce Development (DOLWD)                                                                
OVERVIEW: Department of Labor and Workforce Development (DOLWD)                                                             
                                                                                                                                
1:30:04 PM                                                                                                                    
CHAIR COSTELLO announced the business  before the committee would                                                               
be  an  overview  of  the   Department  of  Labor  and  Workforce                                                               
Development (DOLWD)                                                                                                             
                                                                                                                                
1:30:12 PM                                                                                                                    
HEIDI  DRYGAS, Commissioner  Designee,  Department  of Labor  and                                                               
Workforce Development (DOLWD), introduced  her staff and reviewed                                                               
her resume.  She began  the overview  by reading  DOLWD's mission                                                               
and the  three key program  priorities. She then displayed  a map                                                               
of  different  offices  statewide.  She explained  that  the  job                                                               
centers  provide   employment  and  training  services   and  the                                                               
vocational   rehabilitation   offices  provide   employment   and                                                               
training  services to  disabled Alaskans.  The Alaska  Vocational                                                               
Technical Center (AVTEC) resides in  Seward and the other program                                                               
offices  include   Unemployment  Insurance,  Division   of  Labor                                                               
Standards and Safety, and Workers' Compensation.                                                                                
                                                                                                                                
CHAIR COSTELLO  asked if she  has a  plan for how  the department                                                               
will address the projected loss  of $3.6 million in federal funds                                                               
over the next two years.                                                                                                        
                                                                                                                                
COMMISSIONER DRYGAS  replied part of the  reduction scenario that                                                               
DOLWD put forward  was accepting that the job  centers would lose                                                               
federal  funds. Some  of  the  offices will  be  closed, but  the                                                               
specific locations has not been  determined. When a job center is                                                               
closed,  there  will  be  an   effort  to  partner  with  private                                                               
nonprofits  that provide  similar  services.  Online services  to                                                               
Alaskans in  locations that do not  have a job center  is another                                                               
option.                                                                                                                         
                                                                                                                                
1:36:07 PM                                                                                                                    
COMMISSIONER DRYGAS  reviewed DOLWD's organization  chart showing                                                               
the three program  priorities: 1) to protect  workers, 2) develop                                                               
an  Alaskan workforce;  3) and  provide  income replacement.  She                                                               
noted that the  Division of Employment Security  and the Division                                                               
of Vocational  Rehabilitation have  programs that  cross priority                                                               
program lines.                                                                                                                  
                                                                                                                                
CHAIR COSTELLO asked her to comment  on the status of the work to                                                               
change the workers' compensation fee schedule.                                                                                  
                                                                                                                                
COMMISSIONER  DRYGAS  replied she  has  had  several meetings  to                                                               
ensure the  department is aware  of the legislation  that passed,                                                               
how it  affects workers' compensation,  and what changes  need to                                                               
be implemented in the future.                                                                                                   
                                                                                                                                
1:37:56 PM                                                                                                                    
COMMISSIONER DRYGAS  reviewed the  components of  the department.                                                               
The  Alaska   Labor  Relations  Agency  administers   the  Public                                                               
Employment Relations Act  (PERA) and the labor  provisions of the                                                               
Alaska   Railroad  Corporation   Act  pertaining   to  collective                                                               
bargaining for public employers.  The agency also facilitates the                                                               
resolution  of  disputes  between   organized  labor  and  public                                                               
employers.                                                                                                                      
                                                                                                                                
The Alaska  Workforce Investment Board provides  policy oversight                                                               
of  state  and  federally  funded  job  training  and  vocational                                                               
education  programs. It  also provides  an annual  report to  the                                                               
legislature  on the  performance  and evaluation  of the  state's                                                               
training programs. One  of her priorities will be  to enhance the                                                               
work of the  board and provide policy guidance  to the department                                                               
on workforce development opportunities.                                                                                         
                                                                                                                                
1:39:33 PM                                                                                                                    
CHAIR  COSTELLO   recognized  that   Senator  Meyer   joined  the                                                               
committee.                                                                                                                      
                                                                                                                                
She  asked  how  many  Alaskan  students  enter  the  job  market                                                               
directly from high school as opposed to going on to college.                                                                    
                                                                                                                                
COMMISSIONER DRYGAS replied  she did not have  the statistics but                                                               
this  administration  recognizes  that   not  every  student  who                                                               
graduates  from high  school will  head directly  to a  four-year                                                               
institution. DOLWD  believes it  needs to  refocus on  career and                                                               
technical  training   for  Alaskan,   particularly  in   the  key                                                               
industries that need workers.                                                                                                   
                                                                                                                                
CHAIR COSTELLO noted that the  transition report suggested career                                                               
awareness  for young  people. She  asked how  that plan  might be                                                               
implemented.                                                                                                                    
                                                                                                                                
COMMISSIONER DRYGAS replied  the department is looking  at how to                                                               
ensure that there  are opportunities for young  Alaskans and that                                                               
they are  aware of them. This  Governor has placed a  priority on                                                               
interdepartmental work and she's  worked with both the university                                                               
and  education  commissioner  to  ensure  that  efforts  are  not                                                               
duplicated and  training is  streamlined. Half  the battle  is to                                                               
ensure  that  Alaskans  are  aware of  DOLWD  services  that  are                                                               
already available, she said.                                                                                                    
                                                                                                                                
1:43:21 PM                                                                                                                    
COMMISSIONER  DRYGAS  displayed  a  picture  of  the  new  Alaska                                                               
Vocational  Technical  Center  (AVTEC) dormitory  in  Seward  and                                                               
reviewed  the  mission.  In  FY 2014,  AVTEC  had  382  long-term                                                               
program enrollees  and 898 short-term  program enrollees.  The FY                                                               
2014 completion  rate was 89  percent, and  89 percent of  the FY                                                               
2013  graduates  were  placed in  training-related  jobs  in  the                                                               
following year.                                                                                                                 
                                                                                                                                
CHAIR  COSTELLO asked  if she  has made  a decision  about moving                                                               
forward on the tuition increases at AVTEC.                                                                                      
                                                                                                                                
COMMISSIONER DRYGAS replied a decision  has not been made, but an                                                               
increase is likely since tuition has remained static since 2010.                                                                
                                                                                                                                
1:45:32 PM                                                                                                                    
SENATOR  STEVENS asked  if all  DOLWD's training  is centered  in                                                               
Seward.                                                                                                                         
                                                                                                                                
COMMISSIONER   DRYGAS   replied   all  the   training   that   is                                                               
administered  through the  department is  at AVTEC,  but multiple                                                               
grantees are awarded  step grants and TVEC grants  to do training                                                               
throughout the state.                                                                                                           
                                                                                                                                
CHAIR COSTELLO asked her to define the acronyms she uses.                                                                       
                                                                                                                                
COMMISSIONER   DRYGAS   reviewed   the   Division   of   Business                                                               
Partnerships (DBP). It administers DOLWD's competitive and pass-                                                                
through  workforce development  grant programs.  In FY  2014, DBP                                                               
administered  training  to  2,954   Alaskans  through  the  State                                                               
Training and  Employment Program  (STEP), and  87 percent  of the                                                               
graduates entered training-related jobs in Alaska.                                                                              
                                                                                                                                
CHAIR COSTELLO  asked if she  had reviewed the efforts  to engage                                                               
private partnerships in expanding broadband throughout Alaska.                                                                  
                                                                                                                                
COMMISSIONER  DRYGAS  answered that  she  had  not seen  anything                                                               
about the broadband  program, but her staff is now  aware and she                                                               
will get up to speed to further that.                                                                                           
                                                                                                                                
1:48:44 PM                                                                                                                    
COMMISSIONER  DRYGAS reviewed  the Employment  Security Division.                                                               
It provides: employment and training  services through the Alaska                                                               
Job Center Network  and online through the  Alaska Labor Exchange                                                               
System  (ALEXS);   economic  stability  to   unemployed  Alaskans                                                               
through  Unemployment Insurance;  and  Adult  Basic Education  to                                                               
advance opportunities for employment.                                                                                           
                                                                                                                                
The  Labor Standards  and Safety  Division provides  enforcement,                                                               
training, and  monitoring of laws governing:  occupational safety                                                               
and  health, wages  and hours,  child labor,  and electrical  and                                                               
mechanical codes.  The division  also supports the  Alaska Safety                                                               
Advisory Council  that is responsible  for the  annual Governor's                                                               
Safety  Conference.  In 2014  the  division  developed a  10-hour                                                               
Occupational  Safety  and  Health  Administration  (OSHA)  safety                                                               
course for  seafood processing.  The direct  result was  that the                                                               
state experienced record low workplace  lost time for illness and                                                               
injury.  The  majority  of  the decrease  was  from  the  seafood                                                               
processing industry.                                                                                                            
                                                                                                                                
1:50:16 PM                                                                                                                    
COMMISSIONER   DRYGAS  reviewed   The   Division  of   Vocational                                                               
Rehabilitation (DVR).  It assists  Alaskans with  disabilities to                                                               
secure and  maintain employment  and provides  economic stability                                                               
to   disabled  Alaskans   through   Social  Security   disability                                                               
determinations.  In FY  2014, DVR  had  607 individuals  employed                                                               
upon exit from  their individualized plan for  employment. It was                                                               
an increase from FY 2013  and represents the second highest level                                                               
on record. The  average wage of employed  individuals exiting the                                                               
DVR  program was  $14.31, an  increase from  $13.84 the  previous                                                               
fiscal year.  She noted that  Alaska is  regularly in the  top 15                                                               
states in the nation for average wage.                                                                                          
                                                                                                                                
She  explained  that  the  Workers'  Compensation  Division  aids                                                               
Alaskans  with  employment-related   injuries  and  illnesses  by                                                               
administering   the  Alaska   Workers'   Compensation  Act,   the                                                               
Fishermen's  Fund, The  Workers'  Compensation Benefits  Guaranty                                                               
Fund, and The Second Injury Fund.  She noted that a current focus                                                               
is  working  with the  Medical  Services  Review Committee  on  a                                                               
revised  medical fee  schedule  to  reduce workers'  compensation                                                               
medical costs in Alaska.                                                                                                        
                                                                                                                                
1:51:49 PM                                                                                                                    
SENATOR  MEYER asked  if  she  was working  with  members of  the                                                               
Alaska State  Chamber of Commerce  because they bring  that issue                                                               
forward every year.                                                                                                             
                                                                                                                                
COMMISSIONER DRYGAS  answered yes;  she attended a  reception for                                                               
the chamber  last night  and has bumped  into several  members in                                                               
the hallway. A number of members  have expressed a desire to talk                                                               
with  DOLWD  about  workers'   compensation  and  the  department                                                               
understands  the importance  of  bringing rates  down. She  noted                                                               
that  the   department  has  proposed  legislation   and  she  is                                                               
reviewing  it  with the  division  director  and the  legislative                                                               
liaison.                                                                                                                        
                                                                                                                                
SENATOR MEYER  asked if the  legislature could expect to  see the                                                               
legislation this session.                                                                                                       
                                                                                                                                
COMMISSIONER DRYGAS replied "yes, I believe so, probably."                                                                      
                                                                                                                                
SENATOR  MEYER   asked  if  Alaska   has  the   highest  workers'                                                               
compensation rates in the nation.                                                                                               
                                                                                                                                
COMMISSIONER DRYGAS deferred to Ms. Latham.                                                                                     
                                                                                                                                
1:54:13 PM                                                                                                                    
ANNA  LATHAM,  Legislative  Liaison,   Department  of  Labor  and                                                               
Workforce  Development (DOLWD)  stated  that Alaska  has had  the                                                               
highest  or second  highest workers'  compensation rates  for the                                                               
last ten years.  The rates this year are lower,  but still in the                                                               
top five.                                                                                                                       
                                                                                                                                
COMMISSIONER  DRYGAS reviewed  the FY  2016 endorsed  budget that                                                               
totals  $179,412,800.  Federal  funds  represent  52  percent  or                                                               
$94,386,600. The  department's unrestricted general  funds totals                                                               
$29.2  million.  This is  $4.2  million  less  than FY  2015  and                                                               
equivalent  to  a  12.5  percent  reduction.  To  implement  this                                                               
reduction,  DOLWD   is  focusing   on  the  Governor's   goal  of                                                               
redesigning  administrative  infrastructure to  maintain  maximum                                                               
program  and  services delivery.  She  stated  her commitment  to                                                               
streamlining  services,  finding inefficiencies,  and  developing                                                               
partnerships to maintain key services and program priorities.                                                                   
                                                                                                                                
COMMISSIONER DRYGAS reported the vision  for the department is to                                                               
streamline programs  and revamp the workforce  development system                                                               
to  ensure   maximum  effectiveness   and  efficiency   within  a                                                               
sustainable  budget.  She  said  she  is  currently  reviewing  a                                                               
proposal  that  would  return  the  department  to  its  FY  2003                                                               
structure of having workforce  development grants administered by                                                               
the  Employment Security  Division instead  of having  a separate                                                               
Business Partnerships Division. This  could result in an $850,000                                                               
savings to the  department. She described the  revamp as critical                                                               
to ensure  that the maximum funds  possible are going out  on the                                                               
street  as   grants  for   training  and   workforce  development                                                               
opportunities for Alaskans.                                                                                                     
                                                                                                                                
Another  goal is  to increase  Alaska resident  hire in  priority                                                               
industries and  occupations to ensure  that Alaskans  are getting                                                               
Alaska's  jobs.  This will  be  addressed  through more  targeted                                                               
workforce  development funding  in  areas  with high  nonresident                                                               
hire  rates   and  increased  focus   on  Alaska   resident  hire                                                               
enforcement. This is  a statutory requirement and  is critical to                                                               
the economic success  of the state and its  residents. Alaska has                                                               
one of the  highest ratios of nonresident to  resident workers in                                                               
the  nature,  which  impacts  the   rate  of  unemployment  among                                                               
residents.  Nonresident  workers  use services  provided  by  the                                                               
state  but  do  not  contribute  fairly  to  the  cost  of  those                                                               
services. She  said she  will continue to  focus on  ensuring the                                                               
economic stability for injured,  unemployed and disabled Alaskans                                                               
and  ensuring  safe and  legal  working  conditions for  Alaska's                                                               
workers.                                                                                                                        
                                                                                                                                
1:58:36 PM                                                                                                                    
SENATOR GIESSEL  asked how  she would  address fisheries  that is                                                               
the occupational group with the highest nonresident hire.                                                                       
                                                                                                                                
COMMISSIONER DRYGAS replied  she committed is to  taking a closer                                                               
look at recognizing fisheries as a priority industry.                                                                           
                                                                                                                                
2:00:04 PM                                                                                                                    
SENATOR  ELLIS  asked  where she  expects  innovative  ideas  for                                                               
efficiencies will come from.                                                                                                    
                                                                                                                                
COMMISSIONER DRYGAS  explained that  she envisions  elevating the                                                               
Alaska  Workforce  Investment Board  to  a  policy role  and  she                                                               
expects  that  they  will  generate   a  lot  of  ideas.  Another                                                               
efficiency  will  be  to streamline  administrative  services  by                                                               
combining  the   Division  of  Business  Partnerships   with  the                                                               
Division of  Employment Security. The 26-member  Alaska Workforce                                                               
Investment Board  also may be  restructured to be  more effective                                                               
and efficient. Staff input has  been solicited and the transition                                                               
team reports have been reviewed looking  for ways to do more with                                                               
less.  That will  be the  theme of  this legislative  session and                                                               
everyone is taking it very seriously, she said.                                                                                 
                                                                                                                                
SENATOR STEVENS commented on the  potential to develop year-round                                                               
opportunities and  value-added products in the  fishing industry.                                                               
He   noted  the   opportunities  associated   with  Pollack   and                                                               
highlighted that many  people have lived in Kodiak  and worked in                                                               
the   fish  processing   plant  for   several  generations.   The                                                               
processing  plant at  Ship Creek  provides job  opportunities for                                                               
300  people  in  Anchorage,  and the  largest  number  of  permit                                                               
holders in  the state reside  in that municipality.  The Governor                                                               
in  the State  of the  State address  talked about  the important                                                               
issue  of value  added  and he  hopes that  will  result in  more                                                               
Alaska hire  and year-round  jobs. He related  that he  visited a                                                               
plant  in  Spain that  produces  fish  patties made  from  Alaska                                                               
Pollack and he believes that could be done in Alaska.                                                                           
                                                                                                                                
COMMISSIONER DRYGAS said she likes  the idea and believes that in                                                               
lean times it is particularly  important to think outside the box                                                               
to find efficiencies.  The Governor and his  staff have empowered                                                               
commissioners to do that.                                                                                                       
                                                                                                                                
SENATOR STEVENS noted  that in 2000 the  legislature used federal                                                               
funds to  develop a tax  credit program to help  canneries update                                                               
and  purchase new  equipment to  flash-freeze salmon  filets. The                                                               
program still exists and has worked remarkably well.                                                                            
                                                                                                                                
SENATOR  MEYER  expressed  hope that  people  going  through  the                                                               
workforce training programs will  be warned that safety standards                                                               
will not  be lowered just  because marijuana has  been legalized.                                                               
If a worker  does not pass the  drug test, he or she  will not be                                                               
hired. He asked if that information is part of the training.                                                                    
                                                                                                                                
COMMISSIONER DRYGAS  replied the  department has not  been tasked                                                               
with that,  but it may  have to engage  in that education  of the                                                               
public.                                                                                                                         
                                                                                                                                
CHAIR  COSTELLO asked  what her  commitment  is to  seeing a  gas                                                               
pipeline project come to fruition.                                                                                              
                                                                                                                                
COMMISSIONER DRYGAS replied DOLWD's  role in developing a gasline                                                               
is to ensure that there is  a ready and trained workforce and her                                                               
department  is  committed to  this.  Secondly,  she sits  on  the                                                               
Alaska  Gasline  Development  Corporation (AGDC)  Board  and  she                                                               
takes the responsibility very seriously.  The gasline is critical                                                               
to the future of the state.                                                                                                     
                                                                                                                                
CHAIR COSTELLO asked if she plans  to work with the Department of                                                               
Education to  prepare young  Alaskans to fill  those jobs  in the                                                               
future and if  DOLWD has identified the number and  types of jobs                                                               
that will be filled.                                                                                                            
                                                                                                                                
COMMISSIONER  DRYGAS  replied she  has  a  meeting tomorrow  with                                                               
Commissioner Hanley to look at  current technical education (CTE)                                                               
to make  sure that DOLWD and  DEED are working together  on that.                                                               
She said  she has not  reviewed the report DOLWD  prepared before                                                               
her tenure identifying  the occupations that would  result from a                                                               
gasline, but that will be a priority this year.                                                                                 
                                                                                                                                
CHAIR COSTELLO emphasized the value of including hands-on                                                                       
activities like Lego robotics in the DEED curricula.                                                                            
                                                                                                                                
She thanked Commissioner Drygas for the presentation.                                                                           
                                                                                                                                
2:14:10 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Costello adjourned the Senate Labor and Commerce Standing                                                                 
Committee meeting at 2:14 p.m.                                                                                                  

Document Name Date/Time Subjects
20150129 L&C Agenda.pdf SL&C 1/29/2015 1:30:00 PM
20150129 Heidi Drygas DLWD.pdf SL&C 1/29/2015 1:30:00 PM