Legislature(2005 - 2006)BELTZ 211

03/28/2006 01:30 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 241 JOINT INSURANCE ARRANGEMENTS TELECONFERENCED
Scheduled But Not Heard
*+ SB 309 CONSTR. TRAINING GRANT;UNEMPLOYMENT COMP. TELECONFERENCED
Heard & Held
+ Confirmation of Governor's Appointees: TELECONFERENCED
<Teleconference Listen Only>
Board of Barbers and Hairdressers -
Cody Downs,Charlette Lushin,Alice Massie
Real Estate Appraisers -
William Larick
Alaska Workers Compensation Board -
Robert Morigeau, Debra Norum,
Jeffrey Pruss, H. Bardie Scarbrough,
Damian Thomas, Robert Weel
Alaska Labor Relations Agency -
Dennis Niedermeyer
Board of Marine Pilots -
Les Cronk
Personnel Board -
Alfred Tamagni, Sr.
Bills Previously Heard/Scheduled
Including But Not Limited to:
+= SB 307 LANDLORD REMEDIES; LATE FEE TELECONFERENCED
Heard & Held
+= SB 300 MOTOR VEHICLE NEGATIVE EQUITY TELECONFERENCED
Moved CSSB 300(L&C) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 28, 2006                                                                                         
                           1:31 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Con Bunde, Chair                                                                                                        
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Johnny Ellis                                                                                                            
Senator Bettye Davis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Ben Stevens                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
CONFIRMATION HEARINGS:                                                                                                          
Board of Barbers and Hairdressers                                                                                             
Cody Downs - Anchorage                                                                                                          
Charlotte Lushin - Fairbanks                                                                                                    
Alice B Massie - Wasilla                                                                                                        
     CONFIRMATIONS ADVANCED                                                                                                     
                                                                                                                                
Real Estate Appraisers                                                                                                        
William A. Larick - Anchorage                                                                                                   
     CONFIRMATION ADVANCED                                                                                                      
                                                                                                                                
Alaska Workers' Compensation Board                                                                                            
Robert S. Morigeau - Anchorage                                                                                                  
Debra G. Norum - Fairbanks                                                                                                      
Jeffrey P. Pruss - Fairbanks North Star Borough                                                                                 
H. Bardie Scarbrough - Anchorage                                                                                                
Damian J. Thomas - Fairbanks North Star Borough                                                                                 
Robert C. Weel - Anchorage                                                                                                      
     CONFIRMATIONS ADVANCED                                                                                                     
                                                                                                                                
Alaska Labor Relations Agency                                                                                                 
Dennis S. Niedermeyer - King Salmon                                                                                             
     CONFIRMATION ADVANCED                                                                                                      
                                                                                                                                
Board of Marine Pilots                                                                                                        
Les A. Cronk - Ketchikan                                                                                                        
     CONFIRMATION ADVANCED                                                                                                      
                                                                                                                                
Personnel Board                                                                                                               
Alfred L. Tamagni, Sr. - Anchorage                                                                                              
     CONFIRMATION ADVANCED                                                                                                    
                                                                                                                                
SENATE BILL NO. 307                                                                                                             
"An Act  relating to a fee  provided for in the  rental agreement                                                               
for late payment  of rent under the  Uniform Residential Landlord                                                               
and Tenant Act."                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 300                                                                                                             
"An  Act relating  to the  handling of  negative equity  in motor                                                               
vehicle transactions."                                                                                                          
     MOVED CSSB 300(L&C) FROM COMMITTEE                                                                                         
                                                                                                                                
SENATE BILL NO. 309                                                                                                             
"An  Act  establishing  a   construction  trades  training  grant                                                               
program  for  award by  the  Department  of Labor  and  Workforce                                                               
Development,   providing   for  special   employee   unemployment                                                               
contributions  to  fund  the program  and  an  offsetting  credit                                                               
against  the employees'  general  unemployment contribution,  and                                                               
providing for an expiration date  for the program, contributions,                                                               
and credit; and providing for an effective date."                                                                               
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 241                                                                                                             
"An  Act relating  to modifying  the qualifications  required for                                                               
workers' compensation self-insurance  and permitting employers in                                                               
the same  trade or industry  to form an employer  association for                                                               
self-insured  workers' compensation  coverage; and  providing for                                                               
an effective date."                                                                                                             
     SCHEDULED BUT NOT HEARD                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 307                                                                                                                  
SHORT TITLE: LANDLORD REMEDIES; LATE FEE                                                                                        
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/23/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/23/06       (S)       L&C, JUD                                                                                               
03/09/06       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/09/06       (S)       Heard & Held                                                                                           
03/09/06       (S)       MINUTE(L&C)                                                                                            
03/16/06       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/16/06       (S)       Scheduled But Not Heard                                                                                
03/28/06       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 300                                                                                                                  
SHORT TITLE: MOTOR VEHICLE NEGATIVE EQUITY                                                                                      
SPONSOR(s): SENATOR(s) SEEKINS                                                                                                  
                                                                                                                                
02/14/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/14/06       (S)       TRA, L&C                                                                                               
02/23/06       (H)       TRA AT 1:30 PM CAPITOL 17                                                                              
02/23/06       (H)       -- Meeting Canceled --                                                                                 
03/09/06       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
03/09/06       (S)       Moved  SB 300 Out of Committee                                                                         
03/09/06       (S)       MINUTE(TRA)                                                                                            
03/10/06       (S)       TRA RPT  2DP 1NR                                                                                       
03/10/06       (S)       DP: HUGGINS, KOOKESH                                                                                   
03/10/06       (S)       NR: FRENCH                                                                                             
03/16/06       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/16/06       (S)       Heard & Held                                                                                           
03/16/06       (S)       MINUTE(L&C)                                                                                            
03/28/06       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 309                                                                                                                  
SHORT TITLE: CONSTR. TRAINING GRANT;UNEMPLOYMENT COMP.                                                                          
SPONSOR(s): STATE AFFAIRS                                                                                                       
                                                                                                                                
03/15/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/15/06       (S)       L&C, FIN                                                                                               
03/28/06       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
ED SNIFFEN, Assistant Attorney General                                                                                          
Division of Consumer Protection                                                                                                 
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Commented on SB 307 and supported SB 300.                                                                 
                                                                                                                              
BOB MAIER, Executive Director                                                                                                   
Alaska Manufactured Housing Association                                                                                         
PO Box 100254                                                                                                                   
Anchorage AK 99510-0254                                                                                                         
POSITION STATEMENT: Commented on SB 307.                                                                                      
                                                                                                                                
GORIUNE DUDUKGIAN, Staff Attorney                                                                                               
Alaska Legal Services                                                                                                           
Anchorage AK                                                                                                                    
POSITION STATEMENT: Commented on SB 307.                                                                                      
                                                                                                                                
SENATOR GENE THERRIAULT                                                                                                         
State Capitol                                                                                                                   
Juneau AK                                                                                                                       
POSITION STATEMENT: Sponsor of SB 309.                                                                                        
                                                                                                                                
COMMISSIONER GREG O'CLARAY                                                                                                      
Department of Labor & Workforce                                                                                                 
  Development                                                                                                                   
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
MICHAEL SEXTON, Executive Director                                                                                              
Mechanical Contractors of Fairbanks &                                                                                           
Mechanical Contractors of Alaska                                                                                                
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
JIM LAITI, Business Manager                                                                                                     
Plumbers and Pipefitters - Local 375                                                                                            
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
MAX MIELKE, Business Manager                                                                                                    
Plumbers and Pipefitters - Local 262                                                                                            
Juneau AK                                                                                                                       
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
BRET HELMS, Training Director                                                                                                   
Plumbers and Pipefitters  - Local 375                                                                                           
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
MIKE ANDREWS, Director                                                                                                          
Alaska Works Partnership Inc.                                                                                                   
Juneau AK                                                                                                                       
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
JOHN BITNEY                                                                                                                     
Alaska State Homebuilders Association                                                                                           
Juneau AK                                                                                                                       
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
MIKE GALLAGHAR                                                                                                                  
Business Manager and Secretary/Treasurer                                                                                        
Laborers Local 341                                                                                                              
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
REBECCA LOGAN, President                                                                                                        
Associated Builders and Contractors of Alaska                                                                                   
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposed SB 309.                                                                                           
                                                                                                                                
CLICK BISHOP, Apprenticeship Coordinator                                                                                        
Alaska Operating Engineers Training Trust                                                                                       
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
CHARLES JURGENS, Representative                                                                                                 
District 7                                                                                                                      
Operating Engineers                                                                                                             
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
BOB MORIGEAU                                                                                                                    
Operating Engineers Local 302                                                                                                   
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
VINCE BELTRAMI, Statewide Training Director                                                                                     
Alaska Joint Electrical Apprenticeship and Training Trust                                                                       
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
DAVE McCLURE, Executive Director                                                                                                
Bristol Bay Housing Authority                                                                                                   
Dillingham AK                                                                                                                   
POSITION STATEMENT: Supported SB 309.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting to order at 1:31:47  PM. Present at the call to                                                             
order were Senators  Davis, Seekins and Chair  Bunde. Chair Bunde                                                               
announced that confirmation hearings would  be the first order of                                                               
business. He read the following list of confirmations:                                                                          
                                                                                                                                
^Confirmation Hearings:                                                                                                       
^Board of Barbers and Hairdressers                                                                                            
Cody Downs - Anchorage                                                                                                          
Charlette Lushin - Fairbanks                                                                                                    
Alice B, Massie - Wasilla                                                                                                       
                                                                                                                                
^Board of Real Estate Appraisers                                                                                              
William A. Larick - Anchorage                                                                                                   
                                                                                                                                
^Alaska Workers Compensation Board                                                                                            
Robert S. Morigeau - Anchorage                                                                                                  
Debra G. Norum - Fairbanks                                                                                                      
Jeffrey P. Pruss - Fairbanks North Star Borough                                                                                 
H. Bardie Scarbrough - Anchorage                                                                                                
Damian J. Thomas - Fairbanks North Star Borough                                                                                 
Robert C. Weel - Anchorage                                                                                                      
                                                                                                                                
^Alaska Labor Relations Agency                                                                                                
Dennis S. Niedermeyer - King Salmon                                                                                             
                                                                                                                                
^Board of Marine Pilots                                                                                                       
Les A. Cronk - Ketchikan                                                                                                        
                                                                                                                                
^Personnel Board                                                                                                              
Alfred L. Tamagni, Sr. - Anchorage                                                                                              
                                                                                                                                
1:33:46 PM                                                                                                                    
SENATOR ELLIS arrived.                                                                                                          
                                                                                                                                
1:33:57 PM                                                                                                                    
SENATOR SEEKINS moved to forward the  list of names to the Senate                                                               
to consider  for confirmation.  There were  no objections  and it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
               SB 307-LANDLORD REMEDIES; LATE FEE                                                                           
                                                                                                                              
CHAIR CON BUNDE  announced SB 307 to be up  for consideration. He                                                               
recapped that going  to a seven-day notice would  allow people to                                                               
be a  month late on  their rent. Going  to a 10-day  notice would                                                               
allow them to be  evicted if they were late more  than twice in a                                                               
year.                                                                                                                           
                                                                                                                                
ED SNIFFEN,  Division of Consumer  Protection, Department  of Law                                                               
(DOL), explained under  the current bill, if a tenant  is late on                                                               
his rent, the  landlord can issue a seven-day Notice  to Quit and                                                               
if the  tenant cures the problem,  he is not evicted.  But if the                                                               
tenant repeats that  offense within so many  months, the landlord                                                               
can give a shorter notice period before evicting the tenant.                                                                    
                                                                                                                                
CHAIR BUNDE  said the  goal of  the bill  was to  consolidate the                                                               
late fee  notice and the notice  for nonpayment of rent  to seven                                                               
days before  an eviction process  would start. His  question was,                                                               
though, why not go to 10 days  because he has been led to believe                                                               
that a tenant can violate a  late fee twice in a six-month period                                                               
before he is liable for the eviction process.                                                                                   
                                                                                                                                
CHAIR BUNDE asked Mr. Sniffen to relate general concerns.                                                                       
                                                                                                                                
MR. SNIFFEN  said the Department of  Law did not take  a position                                                               
on this bill,  but he explained that it would  allow landlords to                                                               
evict  tenants for  not  paying late  fees just  as  if they  had                                                               
failed to  pay rent.  Currently, a  different notice  is required                                                               
for failure to  pay late fees and other charges  and the standard                                                               
of review  applied by the  court in determining whether  to evict                                                               
someone for failing to pay those fees is different.                                                                             
                                                                                                                                
     The court  must decide  whether or  not the  failure to                                                                    
     pay  those fees  constitutes a  material breach  of the                                                                    
     rental agreement.  Whereas, if you have  tentative fail                                                                    
     to pay  rent - rent is  sort of separated out  from all                                                                    
     the other  fees and charges  and when a court  is faced                                                                    
     with a situation where a  tenant has failed to pay rent                                                                    
     and   is  deciding   whether  an   eviction  would   be                                                                    
     appropriate,  the  landlord   simply  needs  to  submit                                                                    
     evidence  that  rent  wasn't paid  and  there  were  no                                                                    
     defenses  and  then  eviction  can  follow.  There  are                                                                    
     different  standards of  review,  so to  speak, that  a                                                                    
     court engages in  when reviewing a failure  to pay rent                                                                    
     versus a failure to pay a late fee.                                                                                        
                                                                                                                                
     And what this legislation would  do is it would combine                                                                    
     those into  a streamlined  procedure as  the proponents                                                                    
     have advocated that would allow  the landlords to issue                                                                    
     one notice that  would include not only  the late rent,                                                                    
     but whatever  late fees could  be associated  with that                                                                    
     rent and  then a  court would  decide if  that combined                                                                    
     fee  wasn't  paid, whether  or  not  eviction would  be                                                                    
     appropriate. The court would not  need to engage in the                                                                    
     analysis  to  determine   whether  that  constitutes  a                                                                    
     material breach  of the rental agreement  - because the                                                                    
     late fees  would be essentially rolled  into the rental                                                                    
     amount.                                                                                                                    
                                                                                                                                
CHAIR  BUNDE asked  if nonpayment  of  late fees  was a  material                                                               
breach of the contract.                                                                                                         
                                                                                                                                
MR. SNIFFEN replied yes.                                                                                                        
                                                                                                                                
1:40:53 PM                                                                                                                    
SENATOR  SEEKINS   commented  that  he  liked   streamlining  the                                                               
process,  but he  had  a  problem with  nonpayment  of late  fees                                                               
constituting a material breach.                                                                                                 
                                                                                                                                
SENATOR JOHNNY ELLIS  asked if landlords wanted  to include other                                                               
fees were in one notice.                                                                                                        
                                                                                                                                
MR. SNIFFEN replied that AS  34.03.220(a)(2) doesn't actually use                                                               
the term "late  fee" when it discussed the 10-day  notice that is                                                               
required  to  evict somebody  for  failure  to  pay it.  It  says                                                               
essentially anything else  owed to the landlord that  is not rent                                                               
falls under the  10-day notice period and before  an eviction can                                                               
occur for  non-payment of any  of those other charges,  the court                                                               
needs  to determine  that constitutes  a material  breach of  the                                                               
rental agreement.                                                                                                               
                                                                                                                                
1:44:13 PM                                                                                                                    
SENATOR SEEKINS referenced  page 2 of Mr.  Sniffen's letter where                                                               
it said  the court is not  required to consider whether  the late                                                               
fee is reasonable and he asked if  any statute puts a cap on what                                                               
a late fee can be.                                                                                                              
                                                                                                                                
MR. SNIFFEN  replied that he didn't  know of such a  statute, but                                                               
perhaps some  common law or consumer  protection principles could                                                               
be applied  to some completely  outrageous and  unreasonable late                                                               
fees. Essentially the late fee  needs to be reasonably related to                                                               
the costs of having to pursue late rent.                                                                                        
                                                                                                                                
SENATOR SEEKINS  asked if that  would be  a different type  of an                                                               
action  from an  eviction  and  the court  would  be required  to                                                               
consider whether or not that late fee was reasonable.                                                                           
                                                                                                                                
MR.  SNIFFEN  replied that  was  correct.  He said  that  current                                                               
practice among the judiciary is uneven.                                                                                         
                                                                                                                                
CHAIR BUNDE  asked if  a tenant  were late  in paying  his $1,000                                                               
rent that  was due  on the first  of the month,  did it  accrue a                                                               
late fee  beginning at  the first  of the month  and he  then has                                                               
seven days in which to pay his  rent and three more days in which                                                               
to pay  the late fee -  or did the  late fee begin 10  days after                                                               
the seven-day period.                                                                                                           
                                                                                                                                
1:47:32 PM                                                                                                                    
BOB  MAIER,  Executive   Director,  Alaska  Manufactured  Housing                                                               
Association, replied that  generally rent is due on  the first of                                                               
the month and then there is  usually a 10-day grace period. After                                                               
the end of that grace period,  the late fee would be assessed. As                                                               
it stands  now, the landlord has  to hang a seven-day  notice for                                                               
the rent  and a  separate 10-day  notice for  the late  fee. This                                                               
requires two  separate court actions.  He said that  the question                                                               
had come up about putting both  on a 10-day notice, but rules are                                                               
different for a seven-day notice than  for a 10-day notice. A 10-                                                               
day  notice  has a  six-month  re-occursion  provision. In  other                                                               
words, if the tenant does not pay  a late fee two or three times,                                                               
he could be  evicted if one 10-day notice was  used for both rent                                                               
and  late  fees.  On  a   seven-day  notice,  this  re-occurrence                                                               
provision does not fall into  play. The tenant can re-offend each                                                               
and every  month. As long  as the  tenant cures within  the seven                                                               
days, he  is fine.  With SB  307, the question  has come  up that                                                               
including  the late  fee on  the  eviction notice  would allow  a                                                               
judge to  evict for both rent  and late fee, but  he claimed that                                                               
SB  307  simply  allows  the  communication  process  to  improve                                                               
between the landlord and the tenant.                                                                                            
                                                                                                                                
MR. MAIER said that many  businesses already follow this process.                                                               
Further, he said:                                                                                                               
                                                                                                                                
     If  the tenant  came  up after  that  period and  said,                                                                    
     'Hey, I've got the $500, but  I don't have the $50 late                                                                    
     fee,  no landlord  is  going to  go  through the  whole                                                                    
     process of having to turn  their apartment, go to court                                                                    
     - it's  $435 now for a  FED that the court  awards - it                                                                    
     costs the  landlord - take  the time to get  the tenant                                                                    
     out -  go in  and have  to clean  the apartment  up and                                                                    
     then  re-rent it.  Now, that's  where the  rubber meets                                                                    
     the road. The landlord will  not go through the process                                                                    
     just to collect the late fee. He'll wait for it.                                                                           
                                                                                                                                
     The  question has  come up  now the  judge can  legally                                                                    
     evict for the late fee if  you go to a seven-day notice                                                                    
     - that  it would  be included as  rent. Well,  the same                                                                    
     thing happens, I think, as  Ed Sniffen referred to, the                                                                    
     District Court is  sort of the wild, wild,  west of the                                                                    
     judicial  system.  The  judges  have a  wide  array  of                                                                    
     decisions   that  they   can   make   and  they   don't                                                                    
     necessarily  always stick  to  the letter  of the  law.                                                                    
     I've been to two or three  hundreds of these FEDs and I                                                                    
     have never seen a judge ever evict for a late fee.                                                                         
                                                                                                                                
1:51:58 PM                                                                                                                    
CHAIR BUNDE  asked if the  landlord has to go  to court to  get a                                                               
legal document to "hang a notice to quit."                                                                                      
                                                                                                                                
MR. MAIER explained  that after a 10-day  grace period, landlords                                                               
can hang a  seven-day notice to quit. The clerk  of the court has                                                               
a standard  form to use.   Under current law, a  landlord hangs a                                                               
10-day notice  at the same  time as the  late fee. He  is dealing                                                               
with two different  pieces of paper - with  two different amounts                                                               
of money  with two  different dates  due - at  the same  time. He                                                               
said the Nakamoto decision was made  in 2002 and he wants the law                                                               
to go back to what it was before that decision.                                                                                 
                                                                                                                                
GORIUNE DUDUKGIAN,  Staff Attorney,  Alaska Legal  Services, said                                                               
he worked  on the Nakamoto  decision and agreed with  Mr. Sniffen                                                               
that SB  307 makes nonpayment of  late fees a material  breach by                                                               
definition. That means  that no matter how big or  small the late                                                               
fee is, if a tenant has paid all  the rents due, but not the late                                                               
fee,  the  landlord can  have  him  evicted  after 48  hours.  He                                                               
disagree  with  Mr.  Maier  that the  current  law  requires  two                                                               
separate  court actions.  That's simply  not the  case. There  is                                                               
nothing to keep  landlords from combining the two  notices into a                                                               
single action  and proceeding under  both of them in  an eviction                                                               
case. He explained that SB 307  gives landlords the right to take                                                               
a tenant  to court and  have them evicted  if he hasn't  paid his                                                               
late fees.                                                                                                                      
                                                                                                                                
1:56:58 PM                                                                                                                    
MR.  DUDUKGIAN also  said that  in streamlining  the process  for                                                               
landlords,  they might  create some  unintended consequences  for                                                               
both  landlords  and  the  court  system. Now  it's  easy  for  a                                                               
landlord to comply with  the law. If he ends up  in court and the                                                               
judge determines  the late  rent has not  been paid,  the judge's                                                               
hands are  tied and the person  has to be evicted.  If the notice                                                               
starts to include  late fees, then tenant  advocates like himself                                                               
will have only  one defense - to challenge  the reasonableness of                                                               
the late  fee. This would  convert a  five or ten  minute hearing                                                               
into a  half hour hearing  so the  court could determine  what is                                                               
reasonable.                                                                                                                     
                                                                                                                                
He  firmly  stood behind  the  Nakamoto  decision. The  principle                                                               
behind  it is  that eviction  is a  very harsh  remedy. It  makes                                                               
people  homeless and  families with  children have  to move.  The                                                               
Nakamoto decision  said because eviction  is so harsh,  it should                                                               
be limited to  the most major breaches - like  nonpayment of rent                                                               
or bothering other tenants. It  shouldn't be used for things like                                                               
late fees or parking fees or  fines. This law doesn't make it any                                                               
easier to evict a tenant. He  said that studies show that tenants                                                               
lose in court  about 90 percent of  the time even if  they have a                                                               
lawyer. The  whole reason behind  the Landlord Tenant Act  was to                                                               
make more of a level  playing field between landlords and tenants                                                               
and  the Legislature  doesn't  have  to make  it  any easier  for                                                               
landlords to evict their tenants with a statistic like that.                                                                    
                                                                                                                                
1:59:52 PM                                                                                                                    
CHAIR BUNDE asked  if this bill passes, all  the potential tenant                                                               
loses is three days.                                                                                                            
                                                                                                                                
MR.  DUDUKGIAN replied  that  more  than just  three  days is  at                                                               
stake.  The  seven-day notice  is  automatic  and with  a  10-day                                                               
notice you have to prove that  the breach was a material one that                                                               
should lead  to eviction. Now a  tenant can argue whether  a late                                                               
fee is material.                                                                                                                
                                                                                                                                
2:02:23 PM                                                                                                                    
SENATOR SEEKINS  said it seems  that low income folks  are really                                                               
the most  likely to be  late on a  rental payment and  a landlord                                                               
who has  no limit on  reasonableness of a  late fee can  count on                                                               
exponentially  increasing  his  rental   income  by  charging  an                                                               
exorbitant  late fee  with the  threat  of eviction.  He said  he                                                               
would like  to hold on to  the bill and examine  its consequences                                                               
further.                                                                                                                        
                                                                                                                                
2:04:20 PM                                                                                                                    
CHAIR BUNDE announced that he would hold SB 307 until Thursday.                                                                 
                                                                                                                                
2:05:11 PM                                                                                                                    
         SB 300-MOTOR VEHICLE NEGATIVE EQUITY/CONTRACTS                                                                     
                                                                                                                                
CHAIR BUNDE announced SB 300 to be up for consideration.                                                                        
                                                                                                                                
SENATOR RALPH  SEEKINS, sponsor  of SB 300,  moved to  adopt CSSB
300, version G.                                                                                                                 
                                                                                                                                
CHAIR BUNDE objected for an explanation.                                                                                        
                                                                                                                                
SENATOR  SEEKINS explained  that the  National Automobile  Dealer                                                               
Association   and   the   American  Association   of   Automobile                                                               
Manufacturers  picked  up language  in  one  more section  of  AS                                                               
45.10.030(a) that  needed to  be changed  for consistency  and he                                                               
noted the change was on page 2 of the bill.                                                                                     
                                                                                                                                
CHAIR BUNDE removed his objection.                                                                                              
                                                                                                                                
ED  SNIFFEN,  Assistant  Attorney  General,  Department  of  Law,                                                               
agreed with Senator Seekins that the  change in the CS was needed                                                               
to make  the statute  consistent and said  the department  had no                                                               
objection to that.                                                                                                              
                                                                                                                                
2:07:17 PM                                                                                                                    
SENATOR SEEKINS  moved to report  CSSB 300(L&C), version  G, from                                                               
committee  with   individual  recommendations.   Senators  Ellis,                                                               
Davis,  Seekins and  Chair  Bunde voted  yea;  and CSSB  300(L&C)                                                               
moved out of committee.                                                                                                         
                                                                                                                                
2:08:31 PM at ease 2:11:58 PM                                                                                               
        SB 309-CONSTR. TRAINING GRANT;UNEMPLOYMENT COMP.                                                                    
                                                                                                                                
CHAIR CON BUNDE announced SB 309 to be up for consideration.                                                                    
                                                                                                                                
SENATOR GENE THERRIAULT,  sponsor of SB 309,  said the Department                                                               
of  Labor requested  a committee  substitute  that would  correct                                                               
some technical issues.                                                                                                          
                                                                                                                                
SENATOR RALPH SEEKINS moved to adopt  CSSB 309, version I, as the                                                               
working  document.  There  were  no  objections  and  it  was  so                                                               
ordered.                                                                                                                        
                                                                                                                                
SENATOR GENE THERRIAULT  explained that language on  page 2, line                                                               
1, "The  amount collected  in this subsection  is in  addition to                                                               
the amount collected  under AS 23.15.835" was  deleted because it                                                               
was  unnecessary. "Interest  and penalties"  was also  deleted on                                                               
the same page and a reference to paragraph (a) was added.                                                                       
                                                                                                                                
He made the following comments:                                                                                                 
                                                                                                                                
     This  legislation responds  to an  upcoming opportunity                                                                    
     to  train residents  to fill  thousands of  high-paying                                                                    
     jobs that would  be created in the  construction of the                                                                    
     gas pipeline  and other  growing construction  needs by                                                                    
     providing  a  stable  stream   of  revenue  subject  to                                                                    
     legislative   appropriation   to   the   Alaska   Works                                                                    
     Partnership  Inc.  for  both  training  and  increasing                                                                    
     capacity of training facilities....                                                                                        
                                                                                                                                
     In  2005  there  were   more  than  20,000  individuals                                                                    
     employed in the Alaska  construction trades with annual                                                                    
     incomes  approaching $60,000  each. Unfortunately,  one                                                                    
     in  every five  jobs or  20 percent  of those  being to                                                                    
     individuals  who,  according   to  the  Permanent  Fund                                                                    
     Dividend eligibility information,  were recent arrivals                                                                    
     to the  State of Alaska  or temporary residents  of the                                                                    
     state. Also, with 45 percent  of our resident workforce                                                                    
     being over 45 years of  age, the industry must start to                                                                    
     renew  its workforce  with  thousands of  appropriately                                                                    
     trained  workers. Without  action  on  our part,  these                                                                    
     high-paying jobs will continue  to attract workers from                                                                    
     other  states and  other  countries.  The Alaska  Works                                                                    
     Partnership is a  non-profit organization whose mission                                                                    
     is  to  increase  resident  hire  in  the  construction                                                                    
     trades.                                                                                                                    
                                                                                                                                
     The  funding  proposed  in   this  bill  will  leverage                                                                    
     industry   investment   in  training   facilities   and                                                                    
     equipment  to build  private  sector training  capacity                                                                    
     and   increase  industry   capability  for   sustaining                                                                    
     training into the  future. More that 90  percent of the                                                                    
     workers that  Alaska Works  Partnership trains  are not                                                                    
     members of  a union. The  majority of the  workers that                                                                    
     Alaska Works Partnership places in  jobs go to work for                                                                    
     non-union employers.                                                                                                       
                                                                                                                                
     The legislation  is intended to  divert one-tenth  of 1                                                                    
     percent of the current  employee contributions to a new                                                                    
     holding  account for  appropriation  each  year by  the                                                                    
     Legislature.  The estimated  income of  the account  is                                                                    
     projected  to  be roughly  $5  million  per year.  With                                                                    
     increased payroll  within the state, the  Department of                                                                    
     Labor  has projected  that it  is highly  unlikely that                                                                    
     this small percentage diversion  will cause an increase                                                                    
     in the  overall unemployment  rates that  are insurance                                                                    
     rates. As  we grow the  base, the 1 percent  should not                                                                    
     trigger any change in the  rates that are charged. This                                                                    
     legislation  is  slated  to sunset  in  six  years  and                                                                    
     requires annual reporting on performance standards.                                                                        
                                                                                                                                
     As  we  work  through  the  committee  process,  I  ask                                                                    
     members to  consider placing a priority  on training of                                                                    
     resident Alaskans  to get  the benefit  from increasing                                                                    
     heavy   construction,  highway   construction,  general                                                                    
     construction  and  certainly  construction  that  would                                                                    
     take place on  the oil line. In addition,  I believe we                                                                    
     want to certainly  be taking a longer look  not at just                                                                    
     the  construction  jobs  associated  with  taking  that                                                                    
     resource  to  market, but  also  the  legacy jobs  that                                                                    
        would be left over in operating and maintaining                                                                         
     facilities....                                                                                                             
                                                                                                                                
2:18:22 PM                                                                                                                    
SENATOR  THERRIAULT  related  that   part  of  the  problem  with                                                               
training workers is that employers  are needed who are willing to                                                               
take on the new trainee and pair  him with a journeyman - and the                                                               
salary  has to  be  paid.  He said  the  committee  might hear  a                                                               
suggestion  that if  there is  some  way to  assist employers  in                                                               
actually bringing  in the trainee  and getting them up  to speed,                                                               
that might be a component  of the overall training mechanism that                                                               
is  missing  right  now  -  especially  if  construction  of  the                                                               
pipeline ramps up.                                                                                                              
                                                                                                                                
2:19:35 PM                                                                                                                    
CHAIR  BUNDE heard  concerns that  SB 309  is aimed  at filtering                                                               
workers into union jobs.                                                                                                        
                                                                                                                                
SENATOR THERRIAULT  responded that  there is no  requirement that                                                               
trainees be in a union and it was not his intent to do so.                                                                      
                                                                                                                                
2:21:35 PM                                                                                                                    
CHAIR BUNDE  asked why the  tax is  placed on the  employee only,                                                               
since both employers and employees would benefit.                                                                               
                                                                                                                                
SENATOR THERRIAULT  replied that that concept  is patterned after                                                               
revenue generating mechanism  that is used to  fund existing STEP                                                               
and University programs,  as well as others. He  just copied what                                                               
was already in state law.                                                                                                       
                                                                                                                                
2:23:03 PM                                                                                                                    
COMMISSIONER  GREG O'CLARAY,  Department of  Labor and  Workforce                                                               
Development (DOLWD),  testified that  90 percent Alaska  hire was                                                               
one of  the Governor's goals  across the board in  all industries                                                               
in Alaska. However,  the only statutory authority  that exists to                                                               
require that is in public  construction. He is just below meeting                                                               
that  standard  on  a  consistent basis,  but  he  admitted  that                                                               
construction  workers  would  always   have  to  be  imported  if                                                               
approaches like Senator Therriault's were not adopted.                                                                          
                                                                                                                                
He  said  that the  existing  STEP  program cannot  shoulder  the                                                               
entire  burden of  training  Alaska's  construction workforce  to                                                               
meet  industry demands  over  the  next six  years  and still  be                                                               
poised  to  capture a  majority  of  the  pipeline jobs  if  that                                                               
project goes forward. Enormous number  of people will be required                                                               
to build the pipeline - 400  - 500 pipefitters and welders, 1,900                                                               
- 2,300 equipment  operators, 2,000 - 2,500  truck drivers, 1,200                                                               
-   1,600  laborers   including  welders   helpers,  400   -  500                                                               
supervisory  positions  and  another  900  -  1,000  construction                                                               
inspectors, camp  employees and catering  personnel, electricians                                                               
and ironworkers - for a total of 6,900 - 8,600 workers.                                                                         
                                                                                                                                
The  Department and  the construction  industry  spent two  years                                                               
examining and  developing a  construction plan  to deal  with the                                                               
workforce  needs of  Alaska's construction  industry.  A copy  of                                                               
that report was provided to  the members. He reiterated that this                                                               
particular bill would enable the state to meet that demand.                                                                     
                                                                                                                                
2:26:41 PM                                                                                                                    
COMMISSIONER  O'CLARAY  said that  this  year  the Department  is                                                               
initiating a pilot project with  the Anchorage school district to                                                               
train  100  -  200  construction  workers  that  will  enter  the                                                               
residential construction  field, primarily as  homebuilders. This                                                               
approach  has a  lot of  support  and requires  about $1  million                                                               
initially. This funding stream would  meet some of those needs in                                                               
addition to upgrading capacity for training workers.                                                                            
                                                                                                                                
He said  the reason he supports  this bill and the  use of Alaska                                                               
Works Partnership  as the  main vehicle  for training  workers is                                                               
because  it  already  does  the  best job;  it  has  the  highest                                                               
performance  of every  grantee on  a consistent  basis. Graduates                                                               
from  those  training  programs  are placed  between  88  and  90                                                               
percent in almost every field of endeavor.                                                                                      
                                                                                                                                
2:28:15 PM                                                                                                                    
Only  two  states  tax  workers for  a  portion  of  unemployment                                                               
insurance benefits,  Alaska and  New Jersey,  and this  is proper                                                               
use of  that money. It  reduces unemployment and  increases their                                                               
earning power by moving them up the ladder.                                                                                     
                                                                                                                                
2:28:47 PM                                                                                                                    
CHAIR  BUNDE asked  his thoughts  on recruiting  people for  this                                                               
training asking:                                                                                                                
                                                                                                                                
     We  have the  demand from  the employer  side. Are  you                                                                    
     aware if there is a  demand from the potential employee                                                                    
     side? When we make  these services available, are young                                                                    
     people going to take advantage of them?                                                                                    
                                                                                                                                
COMMISSIONER O'CLARAY replied that  he has had conversations with                                                               
a  lot of  young people,  educators and  parents. This  year with                                                               
some federal grant money, the  Department initiated career guides                                                               
into K12 schools who would  help young people make career choices                                                               
working with  their hands. This  is having  "tremendous success."                                                               
He said that  when kids leave school the most  important thing is                                                               
to have a good work ethic.                                                                                                      
                                                                                                                                
2:31:09 PM                                                                                                                    
CHAIR BUNDE  asked if he anticipated  TAPS closed-shop attitudes,                                                               
primarily in welding, for the building of the gas pipeline.                                                                     
                                                                                                                                
2:31:37 PM                                                                                                                    
COMMISSIONER  O'CLARAY  said he  has  seen  the language  in  the                                                               
current gas line contract and he  believed it is better than what                                                               
was in the TAPS agreement. Alaskans  are poised to at least get a                                                               
first shot at the jobs.                                                                                                         
                                                                                                                                
2:32:02 PM                                                                                                                    
SENATOR SEEKINS asked where all those people would come from.                                                                   
                                                                                                                                
COMMISSIONER  O'CLARAY  replied  primarily out  of  Alaska's  K12                                                               
systems -  maybe those who  are dropping  out of high  school and                                                               
from  rural Alaska.  That  is the  largest  concentration of  new                                                               
workers.                                                                                                                        
                                                                                                                                
SENATOR SEEKINS  asked if he anticipated  recruitment from people                                                               
who are already in the work force.                                                                                              
                                                                                                                                
COMMISSIONER O'CLARAY  replied, "Absolutely."  The last  study he                                                               
saw  said  that young  people  nowadays  change careers  over  10                                                               
times.                                                                                                                          
                                                                                                                                
SENATOR SEEKINS said there was  a terrible strain on employers to                                                               
fill the positions  created when their workers go to  work on the                                                               
pipeline  and  he asked  what  was  being  thought of  for  those                                                               
employers.                                                                                                                      
                                                                                                                                
COMMISSIONER O'CLARAY replied that  his overall strategy has been                                                               
to  do  both.  That  is  why creating  this  new  funding  stream                                                               
focusing on construction would free  up additional investments he                                                               
is now using in the STEP  program to train replacement workers to                                                               
fill  the vacuum  of other  types of  classifications across  the                                                               
board.  There would  be  a gradual  build up  over  the next  six                                                               
years, which  he thought would stem  the flow of the  vacuum that                                                               
be created in  resident workers as it was during  building of the                                                               
TAPS.                                                                                                                           
                                                                                                                                
2:34:22 PM                                                                                                                    
SENATOR THERRIAULT asked  how small employers could  be helped to                                                               
pick up paying  the extra salary, because that seemed  to be part                                                               
of the bottleneck now.                                                                                                          
                                                                                                                                
COMMISSIONER  O'CLARAY replied  that,  while successful  programs                                                               
exist, employers  and contractors  needed to  make more  room for                                                               
apprentices. The  construction trades  have already  moved toward                                                               
doubling the number  of apprentices that they  interview and take                                                               
in  to their  various programs  to meet  the ongoing  demand. The                                                               
construction industry seldom uses wage.                                                                                         
                                                                                                                                
2:36:56 PM                                                                                                                    
SENATOR SEEKINS said  he was surprised to find that  35 years old                                                               
the average hiring age for a  teacher in Fairbanks. He asked what                                                               
age group would be attracted to this type of training program.                                                                  
                                                                                                                                
COMMISSIONER  O'CLARAY  said  he  would  provide  him  with  that                                                               
information,  but wanted  to  make a  last  point. The  employers                                                               
working with  the STEP program  and the Alaska Works  Program are                                                               
providing  a tremendous  match in  dollars to  their grants.  For                                                               
example, the Alaska Joint  Electrical Apprenticeship and Training                                                               
Trust received  a STEP grant in  2005 of $191,000; its  match was                                                               
$490,300.  The  Laborers  Training  Trust  received  a  grant  of                                                               
$292,000; its match as $538,000.                                                                                                
                                                                                                                                
2:39:23 PM                                                                                                                    
MICHAEL  SEXTON, Executive  Director,  Mechanical Contractors  of                                                               
Fairbanks  and Mechanical  Contractors  of  Alaska, supported  SB
309. He said that training is  the key to being successful in any                                                               
industry. Good paying jobs and training  go hand in hand and good                                                               
pay is essential for keeping young people in Alaska.                                                                            
                                                                                                                                
2:41:07 PM                                                                                                                    
JIM LAITI, Business Manager, Plumbers  and Pipefitters Local 375,                                                               
Fairbanks, said he  also sits on the  Workforce Investment Board.                                                               
He  supported  SB 309  saying  that  apprenticeships provide  the                                                               
direct linkage  to on-the-job experience.  He encouraged  them to                                                               
support the programs that work and are already in place.                                                                        
                                                                                                                                
2:42:55 PM                                                                                                                    
MAX MIELKE,  Business Manager, Plumbers  and Pipefitters  - Local                                                               
262, Juneau,  supported SB 309. He  said it is a  fact that union                                                               
construction  training  programs  are unsurpassed  and  some  are                                                               
considered  the best  in the  world. His  contractors are  on the                                                               
leading edge  of new  technology and innovative  ways to  get the                                                               
job done right and on time.                                                                                                     
                                                                                                                                
MR.  MIELKE related  how Local  262  saved every  penny it  could                                                               
until  2003 with  the anticipation  of  some day  having its  own                                                               
training center. Before that, apprentices  were always sent north                                                               
to either  Anchorage or  Fairbanks for  training. In  2003, Local                                                               
262 purchased  a 6,000 ft.  office and training facility  and now                                                               
has  a fully  furnished state  of the  art training  center. More                                                               
could be  done with more funding.  He said that each  member pays                                                               
$1.40 per hour  for training. He said the Juneau  shop could be a                                                               
hub to serve Southeast Alaska.                                                                                                  
                                                                                                                                
2:45:22 PM                                                                                                                    
BRET HELMS,  Training Director,  Plumbers and  Pipefitters, Local                                                               
375,  Fairbanks,  supported SB  309  and  said that  he  strongly                                                               
supported  the   training  provided  by  jointly   managed  trade                                                               
apprenticeships. They provide  a majority of the  training in the                                                               
construction trade  industry. He  said he  expects to  enroll 150                                                               
more  apprentices in  his  program  over the  next  six years  to                                                               
supply the increased demand from  its contractors. The Department                                                               
of  Labor  and  Workforce  Development   projects  a  17  percent                                                               
increase  by 2012  in the  plumbing and  pipefitting field.  This                                                               
increase  would only  supply the  current industry  and does  not                                                               
reflect  the  future  gas  line.  Local  375's  current  training                                                               
facility has  two classrooms and a  small shop area, but  it will                                                               
not be adequate for its future training demands.                                                                                
                                                                                                                                
MIKE  ANDREWS, Director,  Alaska  Works  Partnership Inc.  (AWP),                                                               
supported SB  309 and talked  further about the  extreme shortage                                                               
of  Alaskan  workers.  State  figures  show  20,000  construction                                                               
workers averaged  about $59,000  in wages  last year.  Those same                                                               
figures predict a shortage of at  least 1,000 workers to fill new                                                               
jobs.  If that  threshold goes  up  to 90  percent, Alaska  needs                                                               
another 2,000  workers. Replacing  retiring workers  will require                                                               
another 7,000 to  8,000 workers - just to have  a stable resident                                                               
construction workforce before consideration of a pipeline.                                                                      
                                                                                                                                
MR. ANDREWS said that training  and placement services are needed                                                               
especially in  rural Alaska  and that's one  of the  main reasons                                                               
Alaska  Works  Partnership,  Inc.  was formed  in  1986.  It  was                                                               
designed  to   connect  all  trade   unions  and   their  jointly                                                               
administered  apprenticeship training  programs  into one  system                                                               
that  would  reached  out  across   Alaska  regardless  of  union                                                               
affiliation  or  membership.  Its   programs  have  been  proving                                                               
effective in moving resident Alaskans  into construction jobs. In                                                               
the  past  five  years  it  has  helped  1,000  residents  become                                                               
employed in construction - with a 68 percent retention rate.                                                                    
                                                                                                                                
2:51:57 PM                                                                                                                    
MR.  ANDREWS  said AWP  had  developed  the Rural  Apprenticeship                                                               
Outreach  Program, a  women operating  in the  trades program,  a                                                               
building maintenance repair program,  helmets to hardhats program                                                               
and  pipeline  training  in Fairbanks  that  trains  hundreds  of                                                               
people every year.                                                                                                              
                                                                                                                                
MR. ANDREWS  explained that the  reason the  jointly administered                                                               
programs   are  effective   is   because  they   have  21   trade                                                               
apprenticeship  programs, 1,600  apprentices that  are registered                                                               
with  the federal  government today  or about  80 percent  of the                                                               
trade apprentices in the State  of Alaska. They have doubled that                                                               
in the  last five  years. A 2005  capacity survey  indicated that                                                               
workers  and employers  contributed over  $9 million  to industry                                                               
training through  their trust funds.  He said that some  of their                                                               
trainees end up in a union, but that is their choice.                                                                           
                                                                                                                                
He  recapped that  this  year AWP  has  125 building  maintenance                                                               
repair apprentices  building affordable  housing in  rural Alaska                                                               
and  it trained  over 100  persons for  the Alaska  Native Tribal                                                               
Health Consortium on Force Account  projects building clinics and                                                               
village safe  water projects  in rural Alaska.  It will  help 120                                                               
high  school  youth through  its  construction  academies and  he                                                               
anticipates helping 70  veterans and 70 rural  apprentices to get                                                               
employment this year.                                                                                                           
                                                                                                                                
2:54:33 PM                                                                                                                    
Regarding  Senator  Seekins'  question  about  demographics,  Mr.                                                               
Andrews said  that primarily the age  group of 22 to  24 years is                                                               
really interested  in construction.  However, younger  people are                                                               
becoming interested because of the  opportunities that are coming                                                               
up  and  the  high  wages.  They  also  never  knew  about  these                                                               
opportunities, which are not mentioned in the high schools.                                                                     
                                                                                                                                
An apprentice is hired for about  half of the going rate. As they                                                               
advance  they  get paid  more.  However,  there are  job-training                                                               
programs that will subsidize the worker's  wages if they are in a                                                               
registered  apprenticeship  program.  AWP connects  its  trainees                                                               
with 780  employers who contribute  to the programs and  who hire                                                               
apprentices. They are  not asking for any  incentives even though                                                               
they are available.                                                                                                             
                                                                                                                                
2:57:37 PM                                                                                                                    
JOHN BITNEY, Alaska State  Homebuilders Association, supported SB
309. He said  there is a need  for these types of  workers in the                                                               
residential construction  industry today. His  organization found                                                               
it could  place 90 people on  job sites during a  very short time                                                               
period. So, he didn't anticipate needing a wage subsidy.                                                                        
                                                                                                                                
2:59:29 PM                                                                                                                    
MIKE   GALLAGHAR,  Business   Manager  and   Secretary/Treasurer,                                                               
Laborers Local  341, said  he is  also a  trustee for  the Alaska                                                               
Laborers  Training and  Apprenticeship Program.  He supported  SB
309. In  2005 Local 341  trained over 2,000  construction workers                                                               
and  new apprentices  and upgraded  journeyman  skills. It  spent                                                               
$1.25 million  on training and  this year it expects  to increase                                                               
funding  by  25  percent.  This is  money  coming  directly  from                                                               
employer  and   employee  contributions.  Local  341   trains  in                                                               
Anchorage,  Fairbanks,  Valdez,   Southeast  Alaska,  Kodiak  and                                                               
Kenai.                                                                                                                          
                                                                                                                                
3:00:55 PM                                                                                                                    
REBECCA LOGAN, President, Associated  Builders and Contractors of                                                               
Alaska, supported the  intent behind SB 309, but  didn't like the                                                               
way it  disbursed training  funds. The  first reason  she opposed                                                               
the disbursement method  is because it puts money  into the hands                                                               
of trainers,  which at  first glance appears  to be  a reasonable                                                               
place to deposit  training funds. But the real  resolution to the                                                               
problem  of a  huge skilled  labor shortage  in the  construction                                                               
industry  is  apprenticeship.  Apprenticeship is  a  relationship                                                               
between  the  apprentice,  the  employer  and  the  trainer.  She                                                               
explained further:                                                                                                              
                                                                                                                                
     In that relationship,  it is the employer  and only the                                                                    
     employer who  has the ability  to increase  the numbers                                                                    
     of people  being trained. If  employers don't  agree to                                                                    
     hire apprentices,  new workers will not  be trained and                                                                    
     yet every plan put forth  to address this issue ignores                                                                    
     the employers or worse. At  the beginning of this year,                                                                    
     Governor Murkowski signed  an administrative order that                                                                    
     attempted to  require employers to hire  apprentices on                                                                    
     state  jobs.   On  the  recommendation  of   the  State                                                                    
     Attorney  General,  the  language  was  toned  down  to                                                                    
     suggest that they hire apprentices.                                                                                        
                                                                                                                                
     Why   not  give   employers   an   incentive  to   hire                                                                    
     apprentices? Employers  lose money when they  commit to                                                                    
     hire  an apprentice.  They take  on a  new person  with                                                                    
     little  or  no  skill  and begin  to  train  them.  The                                                                    
     production from the apprentice is  low and in addition,                                                                    
     a journeyman is used  to instruct the apprentice, which                                                                    
     can  result  in  less production  from  an  experienced                                                                    
     worker  as they  take on  the roll  of trainer.  As the                                                                    
     apprentice  progresses, this  changes, but  the initial                                                                    
     investment  is a  loss for  the employer.  If we  truly                                                                    
     want to  address the skilled  labor shortage  in Alaska                                                                    
     by  increasing  the  number  of  apprentices,  we  must                                                                    
     encourage  more  employers  to hire  apprentices.  This                                                                    
     grant  could  be used  as  a  financial incentive  that                                                                    
     would  lead  more  employers   to  become  involved  in                                                                    
     apprentice training.                                                                                                       
                                                                                                                                
     I  appreciate   what  Mike   Andrews  said   about  the                                                                    
     incentive  already existing  in that  when you  hire an                                                                    
     apprentice, they  are paid a  lower wage. That  has not                                                                    
     done it. Employers are still  not willing to take on an                                                                    
     apprentice. I  would guess that the  unions would agree                                                                    
     with that as  they are the ones who  requested from the                                                                    
     Governor,  the administrative  order  to  try to  force                                                                    
     people to  take apprentices on.  The lower wage  is not                                                                    
     enough  to   incentivize  employers   to  take   on  an                                                                    
     apprentice.                                                                                                                
                                                                                                                                
MS.  LOGAN said  the second  problem  she saw  with the  proposed                                                               
distribution  method   through  the   Department  of   Labor  and                                                               
Workforce Development to  the Alaska Works Partnership  is that a                                                               
non-profit  agency  represents  the building  construction  trade                                                               
unions  and their  federally registered  apprenticeship programs.                                                               
But, Bureau of  Labor statistics from 2005 indicate  that only 30                                                               
percent  of Alaska's  construction workforce  was represented  by                                                               
organized labor.  She asked, "Are  we really going to  take money                                                               
for Alaska's workers,  most of whom do not belong  to a union and                                                               
give  those  funds  to  a non-profit  that  only  supports  union                                                               
training programs?"                                                                                                             
                                                                                                                                
MS.  LOGAN said  that Mr.  Andrews  also mentioned  that most  of                                                               
their training  is of non-union  workers and she  agreed, because                                                               
he  doesn't run  an  apprenticeship program,  but  rather a  pre-                                                               
apprenticeship training  program whose people are  steered toward                                                               
the  unions. Last  year her  apprenticeship program  received 800                                                               
applications   and  not   one  of   them  came   from  the   pre-                                                               
apprenticeship program that AWP ran. Further she said:                                                                          
                                                                                                                                
     As recently  as 10 days  ago, the Alaska  Works website                                                                    
     listed  communities  in  Alaska   and  the  numbers  of                                                                    
     workers available  in those communities. The  same page                                                                    
     indicated  that only  employers  signatory  to a  union                                                                    
     could  access  those  workers.   That  page  no  longer                                                                    
     appears on  the website, but  I'm quite sure  that that                                                                    
     philosophy has not disappeared.                                                                                            
                                                                                                                                
     Limiting training funds to such  a group greatly limits                                                                    
     the number  of people  who can be  trained for  jobs in                                                                    
     the industry  and again  be trained  for apprenticeship                                                                    
     jobs  in the  industry. And  it's not  the best  use of                                                                    
     training funds.                                                                                                            
                                                                                                                                
     It   is  also   discriminatory   legislation  and   not                                                                    
     responsible  legislation. I  strongly suggest  that you                                                                    
     amend SB 309 to put  training resources in the hands of                                                                    
     those who  can actually  increase the number  of people                                                                    
     that are  being trained  through apprentice  programs -                                                                    
     the employers. I  would also suggest that  you amend SB
     309 to insure  that any funds taken for  this grant are                                                                    
     distributed  equally  between  the union  and  nonunion                                                                    
     workforce.                                                                                                                 
                                                                                                                                
3:05:58 PM                                                                                                                    
CLICK  BISHOP,   Apprenticeship  Coordinator,   Alaska  Operating                                                               
Engineers Training  Trust, supported  SB 309.  He related  how he                                                               
met  with  the  Governor  and industry  people  last  year  about                                                               
manpower needs  in the  state. At  that time,  BP rolled  out its                                                               
needs for  the pipeline to  be 600  side boom operators.  He said                                                               
that's too  big a bite  for any one entity  to take on  by itself                                                               
and  he thought  industry, labor  and government  should come  up                                                               
with a way to do it together.                                                                                                   
                                                                                                                                
He  related  how he  went  to  Caterpillar's proving  grounds  in                                                               
Tucson a week  ago to preview and operate the  next generation of                                                               
pipe  layers.  Over  100 other  contractor  representatives  were                                                               
there from  the Lower  48 and other  countries around  the globe.                                                               
The main  consensus of that  group was  that there is  not enough                                                               
skilled  people and  not  enough  equipment. At  the  end of  the                                                               
demonstration,  a  Caterpillar  representative asked  him  if  he                                                               
could help with pipeline training. He concluded that:                                                                           
                                                                                                                                
     It's the  prudent thing  to do for  us to  step forward                                                                    
     here with  SB 309 -  all of us here  at the table  - to                                                                    
     move forward  to meet the  needs in the  upcoming years                                                                    
     for the shortage of skilled workers.                                                                                       
                                                                                                                                
MR. BISHOP related  that he has an average of  500 people pick up                                                               
applications every year  - about 260 come  back completed. "We've                                                               
got the people here. We just need to train 'em."                                                                                
                                                                                                                                
CHARLES JURGENS, District  7 Representative, Operating Engineers,                                                               
Fairbanks, said he was also  a trustee of the Operating Engineers                                                               
and Employers Training Trust. He supported SB 309.                                                                              
                                                                                                                                
BOB  MORIGEAU, Operating  Engineers  Local  302, Fairbanks,  also                                                               
supported SB 309. He said, "This  is something that is needed for                                                               
all classes of the trades."  He especially supported Commissioner                                                               
O'Claray's commitment to 90 percent  Alaska hire. He also thanked                                                               
Governor  Murkowski for  signing  Administrative  Order 226  that                                                               
required  15 percent  of heavy  equipment hours  be performed  by                                                               
registered  apprentices  or  trainees.  He related  that  he  has                                                               
approximately 150  apprentices in his program  in Alaska. Between                                                               
Alaska  and Washington  the number  is  at 300.  Thirty to  forty                                                               
trainees  are  presently  being  trained  at  its  apprenticeship                                                               
school  in  Palmer and  the  school  has  an abundant  amount  of                                                               
applicants every  year. Unfortunately, many  of those have  to be                                                               
turned away because  they don't have the positions  to fill every                                                               
year. Training is  only half of the problem; putting  them on the                                                               
job so that  they are not sitting at home  after being trained is                                                               
the other half of it.                                                                                                           
                                                                                                                                
SENATOR THERRIAULT  asked if he  was turning away people  for his                                                               
apprenticeship program.                                                                                                         
                                                                                                                                
MR. MORIGEAU  replied that  Local 302 only  trains the  number of                                                               
people it thinks it can put to work.                                                                                            
                                                                                                                                
3:16:00 PM                                                                                                                    
VINCE  BELTRAMI,   Statewide  Training  Director,   Alaska  Joint                                                               
Electrical Apprenticeship  and Training  Trust, said  his program                                                               
is a joint  labor/management trust and is one of  the largest and                                                               
most successful  training programs in  the state and  has existed                                                               
since  the  mid-1950s.  It  enjoys   a  better  than  90  percent                                                               
completion record  and is  a 100  percent Alaska  hire operation.                                                               
The  Trust  has  over  400   apprentices  registered  in  various                                                               
classifications of  the electrical industry from  electricians to                                                               
power  linemen,   telecommunications  workers  and   power  plant                                                               
operators.    In addition,  it trained over 800  in journey-level                                                               
upgrade  classes last  year. More  that  100 employers  statewide                                                               
contributed nearly $2 million last year to its program.                                                                         
                                                                                                                                
MR. BELTRAMI  explained that its apprentices  receive 8,000 hours                                                               
of on-the-job  training and a  minimum of  280 hours per  year of                                                               
instructor-lead  curriculum.  The   teachers  are  journey  level                                                               
workers who  regularly attend annual  training at  the University                                                               
of Tennessee.  Many have several  years of  management experience                                                               
in  the  trade.  The  Trust  has  two  state-of-the-art  training                                                               
facilities in  Anchorage and Fairbanks. It  invested $2.3 million                                                               
to construct a new training facility  in Anchorage in 2000 and is                                                               
doubling the Fairbanks facility -  all without any public funding                                                               
assistance.                                                                                                                     
                                                                                                                                
He supported  SB 309 because  it would  insure that the  Trust is                                                               
better able  to serve  the needs  of the  state by  expanding its                                                               
ability to  train even more workers  to be prepared to  deal with                                                               
the increased  construction activity in  the state as well  as to                                                               
further augment an aging construction workforce.                                                                                
                                                                                                                                
MR. BELTRAMI said  if there were any amendments to  this bill, he                                                               
would like to see distribution of  funds not be based on union or                                                               
nonunion status,  but on measured performance  and the investment                                                               
that has been made in the industry.                                                                                             
                                                                                                                                
3:19:12 PM                                                                                                                    
DAVE McCLURE, Executive Director,  Bristol Bay Housing Authority,                                                               
said he  is also Chairman of  the Board for the  Southwest Alaska                                                               
Voc-Ed Center that is located on  the King Salmon Air Force Base.                                                               
He totally  supported SB 309.  His partnership with  Alaska Works                                                               
is strong  and the  training has  provided opportunities  to over                                                               
100 individuals to move out  of the economically troubled fishery                                                               
to  new employment  opportunities  statewide.  He mentioned  that                                                               
Bristol Bay is a nonunion employer.                                                                                             
                                                                                                                                
3:20:39 PM                                                                                                                    
CHAIR BUNDE  remembered the  old student  loan program  where the                                                               
money went  to the education  provider and then the  students who                                                               
were rather divorced from the  process and it wasn't important if                                                               
they showed up or not -  the trainer just collected the money and                                                               
had  little  concern  about  the   future  employability  of  the                                                               
trainee. He asked  Senator Therriault if he had  given thought to                                                               
creating something  like a voucher  program where the  money went                                                               
with the  student. The there might  be some incentive for  him to                                                               
stay in the program.                                                                                                            
                                                                                                                                
SENATOR THERRIAULT indicated that he would consider that idea.                                                                  
                                                                                                                                
CHAIR  BUNDE said  he  would  set this  bill  aside  for a  later                                                               
hearing.                                                                                                                        
                                                                                                                                
SENATOR  THERRIAULT   wanted  a   list  of  trades   that  needed                                                               
professional training, because he  hears from trainers that there                                                               
is a limitation on where to put trainees.                                                                                       
                                                                                                                                
There being  no further  business to  come before  the committee,                                                               
Chair Bunde adjourned the meeting at 3:23:31 PM.                                                                              

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