CSHB 226(FIN)-REPEAL TERMINATION OF STEP PROGRAM  2:18:43 PM CHAIR ELLIS announced CSHB 226(FIN) to be up for consideration and that he has instructed a CS to be written that would extend the program to 2018 to comport with some of the gasline training plans the state hopes to have. He, personally, along with a lot of other people, wanted to see the State Training and Employment Program (STEP) program made permanent in statute. REPRESENTATIVE COGHILL, sponsor of HB 226, explained that when he originally introduced this bill the STEP program was permanent. Mainly he sees that some people who need retraining or who are marginally employed need an avenue to get into the workforce. In the foreseeable future, Alaska is going to have workforce development struggles in every major professional career field. The STEP program has proven to him that it can fill that need. He said the program is not without its problems and union issues revolve around philosophies of different administrations. While he favors non-union, he realized that unions do some good work. They have the best training in the world, for one, and this program has hit one of the sweet spots of Alaska where people really have the need. 2:22:37 PM The House gave it a 2009 sunset date because it wanted to see how the STEP grants were handled. He agreed with that, but he didn't want to sunset it every year. It's right to be accountable, so he proposed putting it into the DOL and then looking for places to fund it. In his view then, the funding would be part of the annual question of what the legislature looks at. He said that part of the funding comes from unemployment insurance, so the annual review would include the workforce development reports and unemployment insurance accounting. This was enough for him, but it wasn't for the majority members in the House. That is why the reporting mechanism is in the bill, and that is okay with him. He said there are other programs, but the STEP program is one good tool that promotes a healthy workforce. 2:27:33 PM CLICK BISHOP, Commissioner, Department of Labor and Workforce Development (DOLWD), said the STEP program has demonstrated tremendous success in training Alaska's workers in Alaska careers for over 19 years. Over 24,000 Alaskans have been served by the program, and each year it is evaluated. It continually demonstrates its overall success. Some of the performance highlights are that more than 94 percent (1,643) of the trainees had employment within 12 months after completing the program. STEP participants earned over $71 million in Alaska wages in the year following training, a 35 percent increase over total pre- training earnings. STEP provides services that benefit the participants in the long term; about 90 percent of participants that completed STEP training in 2003 were still Alaskan residents in 2006. 2:29:03 PM He said intent was developed last year that requires the department to work with all interested stakeholders in reviewing the program's priorities and procedures in both the controlling regulations and statute. A public forum was held in the interim in which all but 4 of the 22 entities testified in favor of STEP's continuance. One comment stands out from that period; that was, "STEP demands deliverables and accountability." He concurred with that. He said that last year he pledged to Representative Coghill to advance STEP one piece at a time. The first goal was the reauthorization of STEP; and the second was to get the recommendations from the public forum on STEP. The third goal was to assemble a task force to work through the comments and recommendations he had received in the course of last year in order to develop any changes or procedures - in regulations or statute - to bring forward in the next legislative session. He had assigned Deputy Commissioner David Stone to that task. He closed saying that everyone needs to keep the dialogue on a professional tack as the program gets improved. 2:31:05 PM SENATOR BUNDE said he would provide some questions in writing. CHAIR ELLIS asked Commissioner Bishop if he was able to find improvements in the procurement process. COMMISSIONER BISHOP answered that one of the areas he was able to work on last spring was to improve the STEP application process. CHAIR ELLIS asked if he was personally involved. COMMISSIONER BISHOP replied yes; "I'm on deck." 2:33:23 PM JOE CRUM, President, Northern Industrial Training Trust, started by saying they had trained 875 Alaskans in 2007 and looked to double that this year. He said the concept of STEP is excellent. It is one of the only programs that has training for someone who is already working. The STEP electronic submittal application for grants is awesome as well as the fact that STEP pays for room and board and other support services for participants. Having STEP funds available for competitive grants ensures that trainees from around the state, not from just population centers, can attend the program. A person from Savoonga, for instance, does not have equal access to a Job Center where he can meet with a counselor in person and receive assistance versus a person from Anchorage. STEP grants circumvent the access problem by allowing the burden to be placed on the grantee and not the state system - and he appreciated that. He summarized that the STEP cuts across barriers; it is open to all ages, abilities, all races and all regions within the state. 2:35:39 PM On the improvement side, he said, grant announcements have a deadline for submittal and a required training schedule, but there is no deadline for when the grants are awarded. This typically takes several months, which makes the original training schedule that must accompany the application invalid. This delay severely shortens the recruitment timeframe. STEP reimbursements take a considerable time to be paid back, so when a grantee is purchasing training equipment for the grant training they have to pay in advance and wait two or three months to be paid back. That causes undue financial hardship for his organization as well as many others, and there is no recourse for late payment from the State of Alaska. MR. CRUM also suggested using a flat rate for tuition in the grant, because going back for a breakdown of costs for facility rental, telephone and fax use and insurance amounts is very cumbersome. The last suggestion he had was to consider using the new Denali Commission application process which is awesome. CHAIR ELLIS commented those were the most specific comments he had heard in a long time and he said the Deputy Commissioner of the Department of Law (DOL), Guy Bell, was taking notes. 2:38:00 PM DENNIS TRAYLOR, Southcentral Alaska Building and Construction Trades, supported HB 226 and said one of Alaska's major challenges over the coming decade is workforce development. STEP grants benefit working Alaskans, because as a past instructor of a training program he has seen firsthand the assistance the STEP grant provided. Most of the trainees are men and women from rural areas who are already supporting a household with family members on a trainee's budget. Going to a training facility to complete their training while supporting an additional household crates a financial hardship, and these grants are a lifesaver for these men and women. Otherwise, he said, these slots would ultimately go to a trainee within a city where the training is being offered. This is not a union/non union issue, because any of the trainees, union or non union, can use the STEP grant. When he was an instructor, the AVTEC program in Seward received a $5 million grant and was able to purchase training equipment he wasn't able to. When Dan Logan, one of the AVTEC directors came to his facility looking for curriculum to put together a concentric conduit bending program, he invited him in and opened up the curriculum to him. While he was jealous of the grant, he knew they were all working towards the same goal or training the working men and women of Alaska to become skilled workers. He urged that the unions, the universities, AVTEC and the ABC all work together to meet the incredible challenge this state faces. 2:41:24 PM TOM BRICE, Alaska District Counsel of Laborers, supported HB 226. His folks deal with private construction laborers of Alaska, Locals 341 and 942. Specifically, they appreciate the STEP program because it is competitive and that insures quality. It ensures deliverable and accountability for state funds spent. 2:43:27 PM JOHN MACKINNON, Executive Director, Associated General Contractors, supported HB 226. The Association represents over 650 members statewide, and it is very heavily involved in workforce development, training and continuing education. 2:44:14 PM KEN PELTIER, Administrator, Alaska Operating Engineers and Employers Training Trust, said the trust is a jointly administered labor-management trust fund between the Operating Engineers Local 302 and Associated General Contractors. They train heavy equipment operators, mechanics and service oilers in the construction field and have provided training services independent in Alaska since 1989. The Training Trust has successfully received STEP funding for the last 10 years. He said that the Department of Labor and Workforce Development (DOLWD) has identified the construction field as a high priority occupational training area and Alaska is experiencing a critical shortage of resident workers with construction skills. Historically this industry relies on non-residents to fill jobs where they cannot find qualified Alaskans. Without the necessary training available, contractors are more likely to hire experienced individuals from outside the state. The department estimates construction job growth will exceed 15 percent over the next decade; more than 40 percent of the workforce is over the age of 45 and could retire within a decade. The job growth and replacing the aging workforce will require about 1000 new constructions workers each year; if a gas pipeline is built, thousands more will be needed. Opportunities for employment of rural Alaskans are limited primarily due to a lack of appropriate skills. The STEP program has expanded training opportunities to rural individuals and has increased the number of available trainee slots for rural participants to attend the apprenticeship program in Palmer. He concluded by saying through STEP funding, the Training Trust believes it will be able to increase employability for more of its Alaskans by providing training resulting in credentials and certifications. This training will make them ready to meet the needs of labor shortages and expanding job opportunities and to fill positions otherwise filled by non residents. He stated that STEP training will meet the job needs of those in areas with a high rate of unemployment. MR. PELTIER added that this is a unique and viable program that Alaskans can be proud of. No matter what the field of work, it is a program that encourages workers to improve their skills, allowing them to obtain better paying jobs and decrease their dependence on unemployment funds. He encouraged the legislature to take the STEP program from a pilot to a permanent state program. 2:47:17 PM JONATHAN SMITH, Alaska Regional Council of Carpenters, supported HB 226. He said the STEP funds have helped the millwright, machine erectors, pile drivers and carpenters across the state. 2:47:45 PM CHAIR ELLIS summed up that it's highly likely that the legislature would extend the STEP program. He didn't sense any controversy, but the accountability piece could still be discussed. He had proposed a longer extension period than came to the committee and he wanted members to think about what period of time they are comfortable with. SENATOR BUNDE said he had no quarrel with 2018 if he could hear the rationale.