Legislature(2017 - 2018)BELTZ 105 (TSBldg)

01/31/2017 01:30 PM Senate LABOR & COMMERCE

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01:30:55 PM Start
01:31:20 PM Presentations: Opportunity & Voc-tech for Alaskans
01:33:25 PM Department of Labor and Workforce Development
02:08:12 PM Northern Industrial Training
02:37:18 PM Associated Builders and Contractors of Alaska
03:02:11 PM Maritime Works - Ketchikan Shipyard
03:27:59 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Opportunity & VOC - Tech for Alaskans TELECONFERENCED
Department of Labor & Workforce Development
Associated Builders & Contractors
Northern Industrial Training
Maritime Works
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                        January 31, 2017                                                                                        
                           1:30 p.m.                                                                                            
                                                                                                                                
                                                                                                                              
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Mia Costello, Chair                                                                                                     
Senator Shelley Hughes, Vice Chair                                                                                              
Senator Kevin Meyer                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Berta Gardner                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATIONS: OPPORTUNITY & VOC-TECH FOR ALASKANS                                                                              
     Department of Labor and Workforce Development                                                                              
     Northern Industrial Training                                                                                               
     Associated Builders and Contractors                                                                                        
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                              
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
HEIDI DRYGAS, Commissioner                                                                                                      
Department of Labor and Workforce Development (DOLWD)                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented information on Alaska Department                                                                
of Labor and Workforce Development programs.                                                                                    
                                                                                                                                
GREG CASHEN, Deputy Commissioner                                                                                                
Department of Labor and Workforce Development (DOLWD)                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Reviewed the Alaska Construction Academy                                                                  
Budgets for FY2008 through FY2018.                                                                                              
                                                                                                                                
PALOMA HARBOUR, Director                                                                                                        
Division of Administrative Services                                                                                             
Department of Labor and Workforce Development (DOLWD)                                                                           
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT: Answered  questions  related  to the  Alaska                                                             
Vocational Technical (AVTEC) budget.                                                                                            
                                                                                                                                
JOEY CRUM, President and CEO                                                                                                    
Northern Industrial Training (NIT)                                                                                              
Palmer, Alaska                                                                                                                  
POSITION  STATEMENT:   Presented  information   about  vocational                                                             
education in Alaska.                                                                                                            
                                                                                                                                
AMY NIBERT, President and CEO                                                                                                   
Associated Builders and Contractors (ABC) of Alaska                                                                             
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT: Provided  information  about  ABC of  Alaska                                                             
programs.                                                                                                                       
                                                                                                                                
AMBER CARTIER, Director of Apprenticeship                                                                                       
Associated Builders and Contractors (ABC) of Alaska                                                                             
Anchorage, Alaska                                                                                                               
POSITION    STATEMENT:   Provided    information   about    ABC's                                                             
apprenticeship completion rate.                                                                                                 
                                                                                                                                
DOUG WARD, Director of Shipyard Development                                                                                     
Ketchikan Shipyard                                                                                                              
Ketchikan, Alaska                                                                                                               
POSITION   STATEMENT:  Provided   information  about   vocational                                                             
training at the Ketchikan Shipyard.                                                                                             
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:30:55 PM                                                                                                                    
CHAIR MIA COSTELLO called the  Senate Labor and Commerce Standing                                                             
Committee meeting  to order at 1:30  p.m. Present at the  call to                                                               
order  were   Senators  Gardner  and  Chair   Costello.  Senators                                                               
Stevens, Meyer and Hughes arrived soon thereafter.                                                                              
                                                                                                                                
^Presentations: Opportunity & Voc-Tech for Alaskans                                                                             
       Presentations: Opportunity & Voc-Tech for Alaskans                                                                   
                                                                                                                                
1:31:20 PM                                                                                                                    
CHAIR  COSTELLO  stated  that   the  committee  will  hear  about                                                               
opportunity   and   vocational   education  for   Alaskans.   She                                                               
summarized what the committee has  learned in the last two weeks.                                                               
She  noted  that  the  state  is in  a  recession  and  facing  a                                                               
challenge, not a crisis.                                                                                                        
                                                                                                                                
^Department of Labor and Workforce Development                                                                                  
1:33:25 PM                                                                                                                    
HEIDI  DRYGAS, Commissioner,  Department of  Labor and  Workforce                                                               
Development (DOLWD),  presented information on  Alaska Department                                                               
of Labor and  Workforce Development programs. She  began with the                                                               
department's mission:  Protect workers and  advance opportunities                                                               
for  employment.  She  said   the  department  accomplishes  this                                                               
through core  services of protecting workers,  developing workers                                                               
for jobs, and replacing income for injured or disabled workers.                                                                 
                                                                                                                                
She displayed a chart showing  the FY2008 budget by core service.                                                               
Between FY2008  and FY2018  DOLWD's workforce  development budget                                                               
decreased by $11.4  million. That was due, in large  part, to the                                                               
recent  elimination of  multiple unrestricted  general funds  and                                                               
supportive grant  programs, such as  Alaska Youth First,  oil and                                                               
gas  training,  career and  technical  education,  as well  as  a                                                               
significant   reduction  to   the  Alaska   Construction  Academy                                                               
funding.                                                                                                                        
                                                                                                                                
1:35:16 PM                                                                                                                    
COMMISSIONER DRYGAS  addressed workforce development  programs in                                                               
detail. She  reviewed the Alaska Vocational  and Technical Center                                                               
(AVTEC)  in Seward,  a  post-secondary  training institute  whose                                                               
mission  is  to train  a  diverse  and effective  workforce  that                                                               
supports economic  growth and stability  of Alaska. She  showed a                                                               
graph of  AVTEC's budget by  fund source from FY2008  and FY2018.                                                               
Federal funds  include Pell  Grants and  federal loans  and other                                                               
state   funds,  including   interagency  receipts   for  training                                                               
provided  to  other  state  agencies  and  non-state  grants  and                                                               
contracts.  Designated general  funds  include  funding from  the                                                               
Technical  and Vocational  Education Program  (TVEP) and  student                                                               
tuition  and  fee revenue.  She  noted  that in  FY2018,  student                                                               
tuition and fees will increase 7.5  percent, the second year of a                                                               
two-year increase. She related that  AVTEC has a new director and                                                               
the  department will  be working  closely with  her to  develop a                                                               
strategic plan.                                                                                                                 
                                                                                                                                
She addressed AVETC's two types  of training programs, short-term                                                               
and long-term. Short-tern  programs are less than  six weeks, and                                                               
most are  maritime related.  Long-term programs  include welding,                                                               
plumbing and heating,  and culinary arts. The  longest program is                                                               
10  months. The  long-term program  enrollment decline  in FY2016                                                               
was a  direct result  of state budget  pressures and  resulted in                                                               
the closure of AVTEC's Allied Health Program.                                                                                   
                                                                                                                                
She showed  a graph  of AVTEC's  performance from  FY2006 through                                                               
FY2016. She emphasized  that AVTEC is a  highly effective program                                                               
with an average graduation rate of  88 percent over the last five                                                               
years, and  89 percent of  graduates were employed in  their area                                                               
of training within one year.                                                                                                    
                                                                                                                                
1:37:57 PM                                                                                                                    
COMMISSIONER DRYGAS  reviewed the  State Training  and Employment                                                               
Program (STEP) budget  by fund source between  FY2008 and FY2018.                                                               
She related  that the purpose of  STEP is to enhance  the quality                                                               
and accessibility  of job training  and to  provide re-employment                                                               
assistance to unemployed or under-employed  workers. It is funded                                                               
by  employee   contributions  to  Unemployment   Insurance.  That                                                               
contribution is 0.1  percent. About 75 percent of  STEP funds are                                                               
distributed  by  a  competitive  grant  program  and  awarded  to                                                               
training  providers to  train  Alaskans.  Grant applications  are                                                               
reviewed by the department staff  and Alaska Workforce Investment                                                               
Board members.  The remaining 25 percent  are distributed through                                                               
job centers  for individual training  accounts. STEP  training is                                                               
limited to adults.                                                                                                              
                                                                                                                                
She displayed  a line graph  showing that STEP performance  is on                                                               
an  upward trajectory.  The graph  shows the  number of  Alaskans                                                               
that have exited the STEP  program from FY2006 through FY2015 and                                                               
how many  were employed within  one year.  Both are on  a healthy                                                               
upward   trajectory.  The   department  implemented   a  division                                                               
consolidation in  FY2016 which  reduced administrative  costs and                                                               
put an  additional $1 million in  STEP funds "out on  the street"                                                               
as grants to train Alaskans.                                                                                                    
                                                                                                                                
1:39:32 PM                                                                                                                    
CHAIR  COSTELLO  recognized  that  Senators  Meyer,  Hughes,  and                                                               
Stevens had joined the committee.                                                                                               
                                                                                                                                
COMMISSIONER DRYGAS  reviewed STEP  graduate earnings  over time.                                                               
Looking back  10 years  shows that by  2014 trainees  earned over                                                               
$62,000 annually and non-graduates earned about half that.                                                                      
                                                                                                                                
1:41:16 PM                                                                                                                    
COMMISSIONER  DRYGAS   reviewed  the  Technical   and  Vocational                                                               
Educational  Program (TVEP)  budget  FY2008  through FY2018.  The                                                               
purpose of  TVEP is to  enhance the quality and  accessibility of                                                               
job training  across the state.  This training can  include youth                                                               
and adults.  It is funded  similarly to  STEP - with  an employee                                                               
contribution to  Unemployment Insurance of 0.16  percent. Funding                                                               
is distributed as authorized by  statute. One of the department's                                                               
highest  legislative  priorities   is  re-authorization  of  this                                                               
distribution,  which is  scheduled to  sunset on  June 30,  2017.                                                               
TVEP funding has increased significantly since FY2008.                                                                          
                                                                                                                                
CHAIR COSTELLO asked  if the 0.16 percent is a  percentage of the                                                               
program or of the overall state budget.                                                                                         
                                                                                                                                
COMMISSIONER DRYGAS clarified  that this is the  only funding the                                                               
program receives.                                                                                                               
                                                                                                                                
She continued  to explain  that TVEP reporting  has only  been in                                                               
place  since   FY2012  because  recordkeeping  before   that  was                                                               
unreliable.  Success  in  TVEP  gives  students  the  skills  and                                                               
confidence  they  need to  enter  employment  or seek  additional                                                               
training. Many students go from  one training provider to another                                                               
to advance their skills.                                                                                                        
                                                                                                                                
She  provided an  example  of a  flier  from Northwestern  Alaska                                                               
Career  and   Technical  Center  (NACTEC)  in   Nome.  The  flier                                                               
encourages students to further their training.                                                                                  
                                                                                                                                
COMMISSIONER  DRYGAS  concluded  that   a  statewide  network  of                                                               
training  providers   is  critical   to  developing   an  Alaskan                                                               
workforce for Alaska's jobs. That is what TVAP supports.                                                                        
                                                                                                                                
1:44:07 PM                                                                                                                    
GREG  CASHEN,  Deputy  Commissioner,   Department  of  Labor  and                                                               
Workforce Development  (DOLWD), reviewed the  Alaska Construction                                                               
Academy (ACA) budget  FY2008 through FY2018. He  said the purpose                                                               
of ACA is  to promote an understanding of  the construction trade                                                               
and  develop   a  strong,  flexible  workforce   for  the  varied                                                               
industries that  rely on construction. ACA  training participants                                                               
used to include both youth and  adults, but due to budget cuts as                                                               
of FY2017, there is no longer  any funding for youth training. In                                                               
accordance  with   FY2017  legislative  intent,   the  department                                                               
reduced  the  general  fund  authority  supporting  academies  by                                                               
another  $600,000 in  unrestricted  general fund  in FY2018.  The                                                               
remaining  ACA  funding  totals  $1.26  million  in  unrestricted                                                               
general fund.  If the legislative intent  language continues, the                                                               
program will be eliminated by FY2021.                                                                                           
                                                                                                                                
He concluded  that the department is  concerned about eliminating                                                               
funding for ACA and believes  it is short-sighted given the aging                                                               
construction work force. Failure to  train Alaskans for jobs does                                                               
not mean  the jobs  are going  to go away.  It simply  results in                                                               
jobs going to outsiders.                                                                                                        
                                                                                                                                
CHAIR  COSTELLO asked  if there  are private-sector  job training                                                               
opportunities in the construction industry.                                                                                     
                                                                                                                                
COMMISSIONER  DRYGAS said  there are  several union  and nonunion                                                               
training  apprenticeship programs.  ACA is  a feeder  program for                                                               
the construction  trades with many  graduates going on  to become                                                               
apprenticeships.                                                                                                                
                                                                                                                                
CHAIR COSTELLO asked  Commissioner Drygas if she is  aware of job                                                               
loss in the  oil and gas and construction industries  and if loss                                                               
of training opportunities in those  areas is a factor, or whether                                                               
the overall economy is driving that.                                                                                            
                                                                                                                                
COMMISSIONER  DRYGAS  stated that  it  is  a complicated  set  of                                                               
factors. Those  jobs are  declining, but there  is also  an aging                                                               
construction  workforce. She  pointed out  that the  construction                                                               
workforce exists  across industries. There are  still significant                                                               
federal and military  funds for construction jobs and  it will do                                                               
a  disservice  to  Alaska  to   stop  training  for  those  jobs.                                                               
Otherwise, they will be filled by workers from out of state.                                                                    
                                                                                                                                
SENATOR HUGHES  said she  believes the  private sector  will fill                                                               
the gap in jobs if there is no academy.                                                                                         
                                                                                                                                
COMMISSIONER  DRYGAS agreed  that the  private sector  would, and                                                               
has, stepped up  for years in the construction  industry to train                                                               
Alaskans  and that  won't go  away.  They stepped  up before  the                                                               
academy was  created. She stressed the  importance of introducing                                                               
youth to the  construction trades. She continues  to believe that                                                               
the youth training program fills a critical need in Alaska.                                                                     
                                                                                                                                
1:50:35 PM                                                                                                                    
SENATOR  STEVENS  asked for  specific  information  on the  aging                                                               
workforce.                                                                                                                      
                                                                                                                                
COMMISSIONER DRYGAS agreed to provide the information.                                                                          
                                                                                                                                
CHAIR  COSTELLO  asked  what  other  efforts  the  department  is                                                               
undertaking to improve the business climate.                                                                                    
                                                                                                                                
COMMISSIONER DRYGAS  said Department  of Commerce,  Community and                                                               
Economic Development (DCCED) has  been committed to improving the                                                               
business climate and is working  on an economic development plan.                                                               
She noted that DOLWD has been part of those conversations.                                                                      
                                                                                                                                
CHAIR COSTELLO  asked her  to discuss changes  to the  mission of                                                               
DOLWD if DCCED is focused on jobs.                                                                                              
                                                                                                                                
1:52:42 PM                                                                                                                    
COMMISSIONER DRYGAS said the mission  hasn't changed and DCCED is                                                               
not tasked with creating jobs; that  is the job of the Department                                                               
of  Labor.  The department  is  committed  to working  hard  with                                                               
industry to  meet its needs  when it  comes to job  and workforce                                                               
development.  She provided  examples  from  the maritime,  health                                                               
care,  and aviation  industries.  She emphasized  that DCCED  and                                                               
DOLWF work hand in hand with job creation and job training.                                                                     
                                                                                                                                
MR. CASHEN  reviewed the performance  of the  Alaska Construction                                                               
Academy  from FY2012  through FY2015.  He  said 200  participants                                                               
entered  the construction  apprenticeship program,  of which,  12                                                               
percent were female,  and 21 percent of  participants were Alaska                                                               
Native.  Both groups  saw a  significantly  higher percentage  of                                                               
employment than the year before.                                                                                                
                                                                                                                                
He  reviewed   the  Vocational  Rehabilitation   Client  Services                                                               
Program's  budget  FY2008-FY2018.   The  Division  of  Vocational                                                               
Rehabilitation  is focused  on  delivering  services to  disabled                                                               
Alaskans,  which  is  critical  to the  department's  mission  of                                                               
advancing    employment   opportunities    for   all    Alaskans.                                                               
Unrestricted general fund  in vocational rehabilitation component                                                               
represents  a required  state match.  For every  dollar of  state                                                               
funding that is reduced, a dollar of federal funding is lost.                                                                   
                                                                                                                                
MR. CASHEN reported that the  average wage of individuals exiting                                                               
the vocational rehabilitation program  employed during FY2016 was                                                               
$14.38  per hour,  which  far exceeded  the  federal and  Alaskan                                                               
minimum  wage  levels.   The  state's  vocational  rehabilitation                                                               
program is  quite successful  given that over  90 percent  of the                                                               
individuals  receiving services  are  significantly disabled.  In                                                               
general, Alaska has a highly  transient population. In 2016, over                                                               
80 percent  of individuals  who exited  from the  program without                                                               
employment did so because staff could no longer locate them.                                                                    
                                                                                                                                
MR.  CASHEN  reviewed  individual training  accounts  (ITA).  The                                                               
department supports  ITAs with  Federal Workforce  Innovation and                                                               
Opportunity  Act (FWIOA)  funding, which  is distributed  through                                                               
job  center case  managers statewide.  They meet  one-on-one with                                                               
participants  to  assess the  needs  and  goals of  clients,  and                                                               
develop an individual employment plan.                                                                                          
                                                                                                                                
1:58:06 PM                                                                                                                    
SENATOR  HUGHES   asked  if  federal   funding  from   the  [U.S.                                                               
Department of Veterans Affairs] feeds into ITAs.                                                                                
                                                                                                                                
COMMISSIONER  DRYGAS  said  she  will confirm,  but  she  doesn't                                                               
believe any funds come from that  agency. Most of the funding for                                                               
ITAs comes from FWIOA - dislocated worker funding.                                                                              
                                                                                                                                
SENATOR HUGHES  asked if  the department  has any  "pass through"                                                               
from the [U.S. Department of  Veterans Affairs] for any workforce                                                               
training.                                                                                                                       
                                                                                                                                
COMMISSIONER DRYGAS  said no, but  they have several  programs to                                                               
train veterans. All  the money comes through  the U.S. Department                                                               
of Labor.                                                                                                                       
                                                                                                                                
1:59:51 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:00:14 PM                                                                                                                    
CHAIR COSTELLO reconvened the meeting.                                                                                          
                                                                                                                                
COMMISSIONER  DRYGAS   discussed  Registered   Apprenticeship,  a                                                               
national system that has been  utilized to meet America's skilled                                                               
workforce  needs for  over  75  years. More  than  90 percent  of                                                               
Alaskans that  graduate from a Registered  Apprenticeship program                                                               
stay  to work  in  Alaska. Apprenticeship  is  a unique  training                                                               
system  that  combines  job-related  technical  instruction  with                                                               
structured   on-the-job   learning   experience.   This   enables                                                               
employers  to develop  and apply  industry standards  to training                                                               
programs that  increase productivity  and improve  retention. The                                                               
Registered Apprenticeship  system effectively meets the  needs of                                                               
both employers  and workers.  The progressive  wage scale  of the                                                               
Registered Apprentice system provides  an opportunity for workers                                                               
seeking high-skilled, high-paying  jobs to work their  way up and                                                               
meets  the  needs  of  employers seeking  to  build  a  qualified                                                               
workforce.                                                                                                                      
                                                                                                                                
Registered  Apprenticeships thrive  in  the construction  trades,                                                               
but also  in emerging industries  in Alaska - in  1,000 different                                                               
occupations.   With   some   competitive  federal   grants,   the                                                               
department  has  been  able  to   coordinate  efforts  to  expand                                                               
apprenticeships   into  health   care,  aviation,   and  maritime                                                               
industries. She named  many of the partners  the department works                                                               
with.                                                                                                                           
                                                                                                                                
COMMISSIONER DRYGAS  stated that  across sectors,  the department                                                               
is  working  to  expand  the   number  of  veterans,  women,  and                                                               
minorities    in    apprenticeships.     Job    Center    veteran                                                               
representatives  help connect  veterans with  apprenticeships and                                                               
training. Alaska's construction  apprenticeships have three times                                                               
the number  of women per capita  than the percentage of  women in                                                               
the construction industry overall.  Alaska Natives participate in                                                               
apprenticeships at  rates that  slightly exceed  their proportion                                                               
of the overall state population.  The department will continue to                                                               
work with Alaska Native partners.                                                                                               
                                                                                                                              
2:03:12 PM                                                                                                                    
COMMISSIONER DRYGAS offered to answer questions.                                                                                
                                                                                                                                
SENATOR GARDNER asked if state  and federal funding is correlated                                                               
due to matching funds.                                                                                                          
                                                                                                                                
COMMISSIONER DRYGAS deferred the question to Ms. Harbour.                                                                       
                                                                                                                                
SENATOR  GARDNER clarified  that she  is referring  to the  AVTEC                                                               
budget by fund source.                                                                                                          
                                                                                                                                
2:05:05 PM                                                                                                                    
PALOMA  HARBOUR, Director,  Division of  Administrative Services,                                                               
Department of  Labor and Workforce Development  (DOLWD), answered                                                               
questions  related to  the  Alaska  Vocational Technical  (AVTEC)                                                               
budget. She  clarified that the  federal funding  Senator Gardner                                                               
is  referring to  is pass  through funding  to students  for Pell                                                               
Grants and  direct loans.  She noted there  was a  federal change                                                               
that  required   federal  direct   loans  to  pass   through  the                                                               
institution  that   the  student  attends,  which   explains  the                                                               
increase.                                                                                                                       
                                                                                                                                
SENATOR  GARDNER asked  why there  are  dramatic fluctuations  in                                                               
short-term enrollment in AVTEC.                                                                                                 
                                                                                                                                
COMMISSIONER  DRYGAS  responded  that  the  department  has  been                                                               
partnering more effectively with  private industry, especially in                                                               
the  maritime   industry,  to   provide  training   for  existing                                                               
employees.                                                                                                                      
                                                                                                                                
2:06:19 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:07:43 PM                                                                                                                    
CHAIR COSTELLO reconvened the meeting.                                                                                          
                                                                                                                                
^Northern Industrial Training                                                                                                   
2:08:12 PM                                                                                                                    
JOEY  CRUM,  President  and  CEO,  Northern  Industrial  Training                                                               
(NIT),  presented  information   about  vocational  education  in                                                               
Alaska.  He  explained  that  NIT   is  a  privately-owned  post-                                                               
secondary  vocational training  facility  statewide. The  program                                                               
has trained  and/or tested over  22,000 students  since inception                                                               
in  2003. They  are  a third  party  Commercial Driver's  License                                                               
(CDL) site for the state.                                                                                                       
                                                                                                                                
He  shared  NIT's  five  foundational  anchors:  professionalism,                                                               
integrity,  respect, consistency,  and  the will  to succeed.  He                                                               
said their  programmatic accreditations include:  National Center                                                               
for  Construction Education  Research, Professional  Truck Driver                                                               
Institute, Alaska Department of  Motor Vehicles, American Welding                                                               
Society,  and Crane  Institute Certification.  He  said that  NIT                                                               
chose this programmatic  accreditation path as a  response to the                                                               
needs of industry. They tried  to find relevant training programs                                                               
that   provide   national    level   certifications   to   expand                                                               
opportunities for Alaskans to seek  employment. He explained that                                                               
NIT is  currently a candidate for  national accreditation through                                                               
the  Council on  Occupation Education.  Their visit  is scheduled                                                               
for  September   2017.  It  will   be  an  opportunity   to  gain                                                               
partnerships with  higher education and to  open pathways between                                                               
other states.                                                                                                                   
                                                                                                                                
SENATOR HUGHES  asked if  they have been  trying to  connect with                                                               
the University of Alaska for 13 years.                                                                                          
                                                                                                                                
MR. CRUM  said yes. The  conversations with the  university never                                                               
got off  the ground and  he has not  been given a  reason. Credit                                                               
transfers are an issue.                                                                                                         
                                                                                                                                
MR. CRUM  displayed long-term program  enrollment data  for 2013-                                                               
2015 for  five programs: CDL,  welding, heavy  equipment, project                                                               
management  &   health,  safety,  and   environmental  technician                                                               
(HSET), carpentry  & roustabout, and mechanics.  The CDL increase                                                               
in enrollment is due to partnerships in the Lower 48.                                                                           
                                                                                                                                
2:15:39 PM                                                                                                                    
SENATOR  GARDNER asked  how confident  he is  that students  will                                                               
return to Alaska after training.                                                                                                
                                                                                                                                
MR. CRUM  reported that  in the  last year  less than  10 percent                                                               
have  exited Alaska.  It is  a risk  they face  because there  is                                                               
little market in Alaska.                                                                                                        
                                                                                                                                
He said in 2016 there were  no courses in carpentry & roustabout.                                                               
In 2015  they predicted the  market could bear few  new carpentry                                                               
entries into  the work force, so  they didn't run any  courses in                                                               
2016. They would rather fall short than train too many.                                                                         
                                                                                                                                
2:18:04 PM                                                                                                                    
SENATOR MEYER asked where most  graduates go. He commented on the                                                               
lack of truck drivers and asked if they go to the North Slope.                                                                  
                                                                                                                                
MR. CRUM replied a significant portion  used to work on the North                                                               
Slope. Many now work at  slope companies and welders are employed                                                               
in  Anchorage  and at  Vigor  in  Seward and  Ketchikan.  Project                                                               
management and HSET are employed in much smaller numbers.                                                                       
                                                                                                                                
SENATOR MEYER asked if there are enough CDLs in Alaska.                                                                         
                                                                                                                                
MR. CRUM replied that, currently,  the need for truck drivers has                                                               
slowed.  There are  about 33,000  CDL holders  in Alaska  and the                                                               
number of  truck drivers in the  Alaska market has slowed  in the                                                               
last year. None of the CDL programs they run are at capacity.                                                                   
                                                                                                                                
SENATOR MEYER said it appears that  the CDL program is one of the                                                               
few that has experienced increased enrollment.                                                                                  
                                                                                                                                
MR. CRUM agreed that was  encouraging and he credits out-of-state                                                               
employers that are hiring Alaska drivers.                                                                                       
                                                                                                                                
SENATOR HUGHES  asked if  there is  duplication of  programs with                                                               
AVTEC.                                                                                                                          
                                                                                                                                
MR. CRUM replied  that there is some overlap in  welding and in a                                                               
few  mechanic  programs. The  University  of  Alaska also  offers                                                               
similar programing. He maintained that  the NIT programs are more                                                               
rigorous.                                                                                                                       
                                                                                                                                
SENATOR HUGHES  asked if NIT could  pick up the slack  if some of                                                               
the state-funded programs went away.                                                                                            
                                                                                                                                
MR. CRUM said yes.                                                                                                              
                                                                                                                                
SENATOR GARDNER asked if NIT is for profit.                                                                                     
                                                                                                                                
MR. CRUM  said they decided  to organize as a  for-profit company                                                               
as an internal  and motivating decision. They do  not receive any                                                               
funds from  the state. They  are eligible for the  Alaska Student                                                               
Loan,  VA benefits,  individual training  accounts, and  they can                                                               
bid on  step-competitive bid processes allowable  for third-party                                                               
training  providers.  He  said  he  doesn't  know  the  costs  of                                                               
programs, but he could provide that information.                                                                                
                                                                                                                                
SENATOR GARDNER  asked for  information on  the cost  of programs                                                               
compared  to  state programs  and  for  the completion  rates  of                                                               
students.                                                                                                                       
                                                                                                                                
MR.  CRUM  said the  current  enrollment  slide shows  graduation                                                               
rates.                                                                                                                          
                                                                                                                                
2:26:09 PM                                                                                                                    
MR.  CRUM  displayed  a  bar  graph  showing  short-term  program                                                               
information  for  2015  versus  2016.   He  said  the  number  of                                                               
enrollments  in 2015  was 2,688;  in 2016  there were  1,224. The                                                               
number of  certificates issued were  2,496 in 2015, and  1,081 in                                                               
2016.                                                                                                                           
                                                                                                                                
2:27:49 PM                                                                                                                    
MR.  CRUM turned  to long-term  program information.  Enrollments                                                               
were 415  in 2015  and 376  in 2016;  the number  of certificates                                                               
issued  in 2015  were  1,748 and  1,241 in  2016.  There were  49                                                               
returning  students  in 2015  and  in  2016  there were  32.  NIT                                                               
focuses  on the  output and  screens  the input.  They require  a                                                               
physical  and  a  drug  test,   which  simulates  the  real  work                                                               
environment.  This  helps  with   performance  numbers.  He  said                                                               
workforce  develop is  about connecting  students with  potential                                                               
employers and allowing them a choice of the one that fits best.                                                                 
                                                                                                                                
2:29:40 PM                                                                                                                    
SENATOR GARDNER asked about automatic versus random enrollment.                                                                 
                                                                                                                                
Mr. Crum explained that federal law  requires a drug test for CDL                                                               
drivers  and the  company  must maintain  records.  As a  driving                                                               
school, students are viewed as  employees and must be enrolled in                                                               
random testing.                                                                                                                 
                                                                                                                                
SENATOR GARDNER  summarized that all  students are treated  as if                                                               
they were CDL-licensed and may be randomly tested.                                                                              
                                                                                                                                
MR. CRUM clarified that enrollment  in CDL is dictated by federal                                                               
law, and the others are tested randomly.                                                                                        
                                                                                                                                
CHAIR COSTELLO  said they  simulate the  work environment  in the                                                               
training as much as possible.                                                                                                   
                                                                                                                                
SENATOR HUGHES shared her experience  visiting the NIT center and                                                               
expressed appreciation  that they  follow the  state's employment                                                               
needs and focusing on graduate employment.                                                                                      
                                                                                                                                
2:32:34 PM                                                                                                                    
SENATOR HUGHES asked  if NIT is doing anything to  let youth know                                                               
about the opportunities.                                                                                                        
                                                                                                                                
MR.  CRUM  said  they  have   recruiting  efforts  statewide  and                                                               
educational  efforts, such  as  job fairs.  They  work with  high                                                               
schools and support Skills USA,  and travel around to do outreach                                                               
to Alaska youth.                                                                                                                
                                                                                                                                
CHAIR COSTELLO thanked Mr. Crum for the presentation.                                                                           
                                                                                                                                
2:35:28 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
^Associated Builders and Contractors of Alaska                                                                                  
2:37:18 PM                                                                                                                    
CHAIR  COSTELLO reconvened  the meeting  and welcomed  Amy Nibert                                                               
and Amber Cartier.                                                                                                              
                                                                                                                                
2:37:25 PM                                                                                                                    
AMY   NIBERT,  President   and  CEO,   Associated  Builders   and                                                               
Contractors (ABC)  of Alaska, provided  information about  ABC of                                                               
Alaska programs. She  reviewed the history of ABC  and the Alaska                                                               
Chapter, noting  the apprenticeship program started  in 1999. The                                                               
Alaska  Chapter  has  over  140  members, 70  of  which  use  the                                                               
apprenticeship  program.  She  related  that  the  apprenticeship                                                               
program is member-funded and receives no state grants.                                                                          
                                                                                                                                
MS. NIBERT  listed the trades they  offer: carpentry, electrical,                                                               
glazier,  HVAC,  insulating,   laborer,  pipe-fitting,  plumbing,                                                               
sheet  metal,  and  sprinkler  fitting.   The  primary  ones  are                                                               
electrical   and  plumbing   and  are   accredited  through   the                                                               
Department of Labor and Workforce Development (DOLWD).                                                                          
                                                                                                                                
She stated that  the mission of the apprenticeship  program is to                                                               
provide an  opportunity for  interested and  qualified applicants                                                               
to  receive   craft  and  safety   training  while   working  for                                                               
participating   member  employers.   It  offers   individuals  an                                                               
opportunity  to  receive  an academic  and  vocational  education                                                               
while working on the job for wages.                                                                                             
                                                                                                                                
She reviewed  the benefits of  being an ABC apprentice:  there is                                                               
one-on-one  training   with  a   journeyman,  it   qualifies  the                                                               
apprentice for a  higher level of pay, it  exposes the apprentice                                                               
to the latest technology and  building codes, and it offers life-                                                               
long job mobility.                                                                                                              
                                                                                                                                
She reviewed the eight-step apprenticeship progression chart.                                                                   
                                                                                                                                
She explained ABC's program details  which begin with the ranking                                                               
of  applicants,   then  member   company  interviews.   Next  the                                                               
apprentice is indentured  into the program and  works through the                                                               
program progression.                                                                                                            
                                                                                                                                
2:43:18 PM                                                                                                                    
In  FY2014  ABC  of  Alaska  received a  grant  from  the  Alaska                                                               
Workforce Investment  Board to support training  projects focused                                                               
on targeted occupations  - oil and gas  training and construction                                                               
jobs related to oil and gas.  They were challenged that year with                                                               
more people in  rural areas wanting to train  as apprentices, but                                                               
without the opportunity to travel  to Anchorage or Fairbanks. ABC                                                               
used the grant to bring the training to them via technology.                                                                    
                                                                                                                                
SENATOR GARDNER asked if the grant  program was a victim of state                                                               
budget cuts.                                                                                                                    
                                                                                                                                
MS.  NIBERT  explained  that  there   were  only  two  people  to                                                               
administer  the grant  to 385  apprentices. It  was overwhelming,                                                               
and they  stepped back and hired  more staff. This year  they are                                                               
considering another grant for continuing education.                                                                             
                                                                                                                                
She reviewed  a graph of ABC's  apprenticeship enrollment numbers                                                               
from FY2013  through FY 2016.,  There were about  100 apprentices                                                               
five  years  ago, and  today  309  apprentices are  enrolled  and                                                               
working today.                                                                                                                  
                                                                                                                                
2:45:54 PM                                                                                                                    
AMBER  CARTIER, Director  of Apprenticeship,  Associated Builders                                                               
and  Contractors  (ABC)  of Alaska,  provided  information  about                                                               
ABC's growing apprenticeship completion  rate. She reviewed ABC's                                                               
apprenticeship completion rates by year.                                                                                        
                                                                                                                                
CHAIR  COSTELLO  requested  that  she  read  the  percentages  of                                                               
completion by year.                                                                                                             
                                                                                                                                
MS.  CARTIER reported  that in  2013 the  completion rate  was 20                                                               
percent; in  2014 it was 30  percent; in 2015 it  was 32 percent;                                                               
and in 2016 it was 33 percent.                                                                                                  
                                                                                                                                
SENATOR GARDNER asked  what this says about  people who completed                                                               
the program versus those who went on to do other things.                                                                        
                                                                                                                                
MS. CARTIER said  the numbers are only representative  of the 309                                                               
apprentices on the books last year.                                                                                             
                                                                                                                                
CHAIR COSTELLO  summarized that  32 percent  of 309  graduated in                                                               
that year.                                                                                                                      
                                                                                                                                
SENATOR GARDNER asked what 20 percent of 220 means in 2013.                                                                     
                                                                                                                                
MS. CARTIER  said she does  not have a five-year  progression. It                                                               
represents the number that graduated in 2013.                                                                                   
                                                                                                                                
CHAIR COSTELLO requested  information on how many  people, of the                                                               
people who entered the program, graduated.                                                                                      
                                                                                                                                
MS. CARTIER said she would get that information.                                                                                
                                                                                                                                
2:48:54 PM                                                                                                                    
MS.  NIBERT reviewed  ABC's involvement  in rural  communities of                                                               
Alaska. She  provided examples  of ABC  member companies'  use of                                                               
the apprenticeship program.                                                                                                     
                                                                                                                                
As of 2017,  74 percent of apprenticeships are  in electrical, 17                                                               
percent  are in  plumbing,  and  9 percent  are  other trades.  A                                                               
breakdown by region  for 2016 shows that the  Arctic Slope Region                                                               
has 62 apprentices,  Southeast & Southwest have 9,  Kenai has 40,                                                               
Mat-Su has 60, Anchorage has 80,  and Fairbanks has 20. She noted                                                               
in 2014 the  Arctic Slope Region has the most  apprentices due to                                                               
oil jobs. Now  the rates are more even due  to projects returning                                                               
to the Mat-Su and Anchorage.                                                                                                    
                                                                                                                                
2:50:58 PM                                                                                                                    
MS.  NIBERT showed  a graph  of equal  opportunity enrollment  by                                                               
trade. It  shows women and  minorities are highest  in electrical                                                               
and plumbing. Veterans average about 10 percent.                                                                                
                                                                                                                                
2:51:29 PM                                                                                                                    
MS.  NIBERT  offered  to send  the  apprentice  statements  later                                                               
because  the  video  wasn't  available  today.  She  provided  an                                                               
example of the success of an apprentice with no experience.                                                                     
                                                                                                                                
CHAIR COSTELLO said she would like that.                                                                                        
                                                                                                                                
MS. NIBERT discussed how ABC stands apart from the union.                                                                       
                                                                                                                                
       ABC's    Apprenticeship    Program   is    paid    through                                                               
       participating employers - no union dues                                                                                  
                                                                                                                                
       The Apprentice is not required to take time off work or                                                                  
       use unemployment for classroom study                                                                                     
                                                                                                                                
       ABC's open enrollment is available year-round - there's no                                                               
       need to wait to apply                                                                                                    
                                                                                                                                
       ABC utilizes standardized curricula that is recognized                                                                   
       nationwide (NCCER)                                                                                                       
                                                                                                                                
       ABC maintains apprentice and applicant pools for employer                                                                
       use, providing applicants with employment opportunities                                                                  
       throughout the industry                                                                                                  
                                                                                                                                
       There are more employment opportunities when work is slow                                                                
                                                                                                                                
       Greater promotion/pay increase opportunities based on                                                                    
       performance                                                                                                              
                                                                                                                                
       Free certification classes in OSHA 10, OSHA 30 and First                                                                 
       Aid/CPR, and others                                                                                                      
                                                                                                                                
2:54:36 PM                                                                                                                    
SENATOR GARDNER  noted that AVTEC  students pay tuition  and have                                                               
employers that often are from  industry. She said limitations are                                                               
that  they pay  tuition and  can only  come into  a class  at the                                                               
beginning of it, whereas ABC  has open enrollment. She asked what                                                               
ABC costs and who pays for it, and how open enrollment works.                                                                   
                                                                                                                                
MS. CARTIER explained  that there is a $50  application fee. Once                                                               
an  apprentice   is  indentured,  the  employer   starts  to  pay                                                               
$95/month.  There  are  no classroom  teachings,  currently.  The                                                               
courses  are  via  correspondence,  and  the  journeyman  is  the                                                               
mentor.                                                                                                                         
                                                                                                                                
SENATOR   GARDNER  asked   when  they   graduate  or   receive  a                                                               
certification.                                                                                                                  
                                                                                                                                
MS.  CARTIER  related  that the  licensed  trades  receive  their                                                               
journeyman  card if  they  decide to  "journey  out" through  the                                                               
electrical or  plumbing programs. Both licensed  and non-licensed                                                               
trades  receive a  certificate to  the U.S.  Department of  Labor                                                               
saying that they completed the ABC program.                                                                                     
                                                                                                                                
SENATOR GARDNER asked what the completion rate is.                                                                              
                                                                                                                                
MS. CARTIER  said they tried to  represent that in the  pie chart                                                               
and will follow up with the information.                                                                                        
                                                                                                                                
SENATOR  STEVENS  asked  for the  ratio  of  on-the-job  training                                                               
versus book work.                                                                                                               
                                                                                                                                
MS. CARTIER replied that there are 160 hours of book work per                                                                   
level and 6,000 to 8,000 hours of on-the-job training.                                                                          
                                                                                                                                
SENATOR STEVENS asked how important the on-the-job training is.                                                                 
                                                                                                                                
MS. CARTIER said it is required.                                                                                                
                                                                                                                                
2:59:16 PM                                                                                                                    
MS. NIBERT discussed future goals of  the ABC program. One of the                                                               
goals in  the next five  years is to  open a training  center for                                                               
all  apprentices to  come in  and  have a  hands-on learning  and                                                               
training  experience  outside  of   the  work  environment  using                                                               
virtual tools and the latest technology.                                                                                        
                                                                                                                                
She  said ABC  chapters  have national  craft championships  each                                                               
year  for third  and fourth  year apprentices.  ABC of  Alaska is                                                               
proud to have had a national  champion in 2012 and a second-place                                                               
finish in 2014 in plumbing.                                                                                                     
                                                                                                                                
CHAIR  COSTELLO  thanked  Ms.  Nibert and  Ms.  Cartier  for  the                                                               
presentation.                                                                                                                   
                                                                                                                                
3:00:33 PM                                                                                                                  
At ease                                                                                                                         
                                                                                                                                
^Maritime Works - Ketchikan Shipyard                                                                                            
3:02:11 PM                                                                                                                    
CHAIR  COSTELLO reconvened  the  meeting and  welcomed Doug  Ward                                                               
from the Ketchikan Shipyard.                                                                                                    
                                                                                                                                
3:02:39 PM                                                                                                                    
DOUG WARD, Director of  Shipyard Development, Ketchikan Shipyard,                                                               
provided information  about vocational training at  the Ketchikan                                                               
Shipyard. He said he has enjoyed  being the director for the past                                                               
22 years. In  that time, they learned how to  build a world-class                                                               
shipyard and to build world-class  ships. More recently they have                                                               
learned  how to  turn out  Alaska-class ferries  and Alaska-class                                                               
shipbuilders. He introduced Matt Alwood.                                                                                        
                                                                                                                                
MR. WARD said they had a  public rollout of a training initiative                                                               
called Advancing  Alaskan Workers,  supported by  Maritime Works.                                                               
It is the  first demonstration project of  an employer-led, jobs-                                                               
driven  training initiative  that  advances  workers from  middle                                                               
skills to advance skills.                                                                                                       
                                                                                                                                
3:06:09 PM                                                                                                                    
MR. WARD gave some background  about VIGOR, which brings a strong                                                               
commitment  to front-line  workers to  develop production  skills                                                               
and  be strong  members of  the  community. He  said that  Alaska                                                               
Industrial Development  and Export  Authority (AIDEA)  noted that                                                               
commitment when it  reviewed the proposal to  reopen the shipyard                                                               
in 2012. It is because of  the emphasis on skill building that he                                                               
is  here today.  He  related that  VIGOR has  a  diverse line  of                                                               
business  that  includes  shipbuilding,  ship  repair,  specialty                                                               
boats, and heavy, complex fabrications.                                                                                         
                                                                                                                                
He discussed  current employment at  the shipyard. There  are 180                                                               
direct  jobs and  90 indirect  jobs, paying  over $14  million in                                                               
wages.  Wages are  35 percent  higher in  Ketchikan than  average                                                               
private sector wages. The workforce  is young with an average age                                                               
of 38 years old.                                                                                                                
                                                                                                                                
3:11:32 PM                                                                                                                    
MR. WARD addressed the beginnings  of Maritime Works. They became                                                               
involved with the National Ship  Building Research Program funded                                                               
by the  U.S. Navy to  reduce the  cost of building  and repairing                                                               
warships.  Out  of  this  came  cutting  edge  information  about                                                               
building a  commercial ship building  industry. He  described the                                                               
cyclical nature of ship building that  is leveled out by having a                                                               
strong ship building workforce.                                                                                                 
                                                                                                                                
He described how in 2001  Maritime Works looked at the functional                                                               
industrial processes  required to build  ships and the  key tasks                                                               
of each process to set skill standards.                                                                                         
                                                                                                                                
3:16:23 PM                                                                                                                    
MR. WARD  discussed Maritime  Works' Alaska  careers partnerships                                                               
that increased the number of  Alaskans working in the skilled and                                                               
well-paying  maritime occupations.  They  developed a  responsive                                                               
workforce, enabling  the maritime sector to  remain a substantial                                                               
contributor  to  the  state's  economy.  The  partnerships  guide                                                               
Alaska's workforce to discover and  prepare for the wide range of                                                               
employment opportunities.                                                                                                       
                                                                                                                                
3:18:09 PM                                                                                                                    
CHAIR  COSTELLO said  it  is  not lost  on  me the  comprehensive                                                               
process  and significance  of you  drilling down  into the  skill                                                               
that is required  to perform a given task. That  is a significant                                                               
undertaking.                                                                                                                    
                                                                                                                                
MR. WARD  said there  was significant  debate about  that. Having                                                               
ship  production  managers  on the  Workforce  panel  contributed                                                               
greatly to the discussions.                                                                                                     
                                                                                                                                
He reported that  Maritime Works is a new  organization and their                                                               
job  is   to  implement  the   2014  Alaska   Maritime  Workforce                                                               
Development Plan. Six individuals worked  on it.  He related that                                                               
Maritime Works  was put into  the Alaska Process  Industry Career                                                               
Consortium (APICC)  in Anchorage.  They shared APICC's  values of                                                               
partnerships, leadership, awareness and advocacy, and alignment.                                                                
                                                                                                                                
He said it is an  innovative training program aimed at developing                                                               
a highly  productive, advanced manufacturing  workforce comprised                                                               
of  Alaska  residents  at  the Ketchikan  Shipyard.  He  gave  an                                                               
example of one of the interns.                                                                                                  
                                                                                                                                
3:22:33 PM                                                                                                                    
He noted  the importance  of internships.  They have  two interns                                                               
from the  Webb Institute working toward  blue collar, high-dollar                                                               
maritime careers.                                                                                                               
                                                                                                                                
3:23:04 PM                                                                                                                    
CHAIR COSTELLO noted that Senator  Stedman and Senator Bishop had                                                               
joined the committee.                                                                                                           
                                                                                                                                
3:23:30 PM                                                                                                                    
MR.  WARD  described  the  business metrics  they  use,  such  as                                                               
reportable  accident rates,  workforce  retention,  and cost  and                                                               
schedule  performance indexes.  They apply  business measures  to                                                               
structured  on-the-job  training  (SOJT)  in Phase  1  to  decide                                                               
whether they are competitive.                                                                                                   
                                                                                                                                
They  use a  safety application.  In 2013  they had  a reportable                                                               
incident  rate  of  15  and  now it  is  1.82.  With  the  safety                                                               
application you  can take a  picture of the potential  threat and                                                               
send it  to the entire  production team.  In less than  two years                                                               
they have seen improvement.                                                                                                     
                                                                                                                                
3:26:19 PM                                                                                                                    
CHAIR COSTELLO asked him to provide his information in writing.                                                                 
                                                                                                                                
SENATOR GARDNER said  she collects phrases and she  is adding his                                                               
statement  that  they  are  learning "how  to  design  and  build                                                               
Alaska-class shipbuilders."                                                                                                     
                                                                                                                                
MR. WARD  said it was  the most important  job. The CEO  of Vigor                                                               
said  the Ketchikan  Shipyard has  become the  heart and  soul of                                                               
Vigor.                                                                                                                          
                                                                                                                                
CHAIR COSTELLO thanked Mr. Ward  and all the presenters for their                                                               
presentations.                                                                                                                  
                                                                                                                                
3:27:59 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Costello adjourned the Labor & Commerce Standing Committee                                                                
meeting at 3:27 p.m.                                                                                                            

Document Name Date/Time Subjects
2017.01.31 - DOL&WD Presentation.pdf SL&C 1/31/2017 1:30:00 PM
2017.01.31 - ABC of Alaska Presentation.pdf SL&C 1/31/2017 1:30:00 PM
2017.01.31 - NIT Presentation.pdf SL&C 1/31/2017 1:30:00 PM
2017.01.31 - Maritime Works Presentation.pdf SL&C 1/31/2017 1:30:00 PM
2017.01.31 - Doug Ward Testimony.pdf SL&C 1/31/2017 1:30:00 PM
2017.01.31 - Ketchikan's Maritime Economy Handout.pdf SL&C 1/31/2017 1:30:00 PM