Legislature(2017 - 2018)BARNES 124
03/06/2017 03:15 PM House LABOR & COMMERCE
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HB 141-AK WORKFORCE INVESTMENT BOARD;FUNDS 3:18:23 PM CHAIR KITO announced that the next order of business would be HOUSE BILL NO. 141, "An Act relating to allocations of funding for the Alaska Workforce Investment Board; and providing for an effective date." 3:18:43 PM REPRESENTATIVE ZACH FANSLER, Alaska State Legislature, as sponsor, presented HB 141. He read from the sponsor statement, which read as follows [original punctuation provided]: AS 23.15.820 authorizes the Alaska Workforce Investment Board to administer the Alaska Technical and Vocational Education Program (TVEP). This legislation reauthorizes the allocation of the TVEP funding for five years. TVEP was established by Legislature in 2000 with the purpose of enhancing the quality and accessibility of job training across the state, and aligning training with regional workforce demands. TVEP funds are obtained from a portion of employee contributions to the unemployment insurance trust fund. The TVEP funds are allocated to technical and vocational education entities across Alaska designated by AS 23.15.835. Each entity receives a set percentage of the TVEP funds available each fiscal year. The current allocation sunsets June 30, 2017. Unless the allocation is reauthorized this funding will sit unused in the TVEP account instead of being used by these entities to train Alaskans. TVEP recipients are required by statute to track and report program outcomes to the Alaska Workforce Investment Board. Each year the Board compiles and provides to the legislature a TVEP performance report containing this information. In Fiscal Year 2016, the ten TVEP recipients were allocated $12,510,900 and served 10,295 youth and adults. A statewide network of training providers is critical to developing an Alaskan workforce. This legislation is necessary to help educate and train Alaskans for Alaska's jobs. REPRESENTATIVE FANSLER listed the programs that currently receive TVEP funds: University of Alaska statewide receives 45 percent, Galena Interior Learning Academy (GILA) receives 4 percent, the Alaska Technical Center in Kotzebue receives 9 percent, Alaska Vocational Technical Center (AVTEC) in Seward receives 17 percent, the Northwestern Alaska Career and Technical Center (NACTEC) in Nome receives 3 percent, the Southwest Alaska Vocational and Education Center (SAVEC) in King Salmon receives 3 percent, Yuut Elitnaurviat in Bethel receives 9 percent, Partners for Progress in Delta receives 3 percent, the Amundsen Educational Center in Soldotna receives 2 percent, and Ilisagvik College in Utqiagvik receives 5 percent. REPRESENTATIVE FANSLER explained that the bill would reauthorize funding for five years and the distributions would be set until June 30, 2022. He expressed that the bill is important to many communities around the state and is important to the state's resource development systems. The bill would ensure that Alaskans are trained to perform the jobs in their regions. 3:23:12 PM REPRESENTATIVE BIRCH asked where the funds come from. REPRESENTATIVE FANSLER described that TVEP is funded by a portion of the contributions to unemployment insurance paid by every working Alaskan. The funds are distributed to technical and vocational education entities across Alaska's regions in accordance with AS 23.15.835. REPRESENTATIVE BIRCH asked how TVEP benefits his constituents who have funds taken out of their wages. REPRESENTATIVE FANSLER noted that unemployment [insurance contributions] are currently pulled out for "unemployment reasons." He said that one benefit of TVEP is the ability to train a worker for a well-paying job, like those on the North Slope. He added that the programs are regionally based and target the industries of each region. He explained that the Yuut Elitnaurviat in Bethel does a lot of [Commercial Driver's License] (CDL) training. He proposed one might consider the TVEP program as an opportunity for upward mobility for employees to get better jobs, for Alaska to keep its high-paying jobs within the state, and [to have the wages from such jobs remain] in Alaska's economy. 3:25:25 PM REPRESENTATIVE BIRCH offered his interpretation that [TVEP funding] "comes out of the hide of the working person" and the money is taken out of an individual's paycheck to fund training for someone that might replace him/her. He said he is not convinced that is a good thing. He acknowledged the pot of money is big, but he questioned what the return value is for the person who is working and seeing his/her paycheck diminish. REPRESENTATIVE FANSLER responded that there is a wide distribution of jobs around the state that require a professional degree. He said that TVEP is a program designed specifically for jobs that would utilize resource development industries to provide skills to Alaskans. He stated that the funding mechanisms for [TVEP] have been in place for many years. He remarked: Ideally, I think what we all want as Alaskans is to [at] some point get to a place where workers can ... get that upward mobility and be able to say, "I no longer ... qualify for ... just the bare minimum wage job." REPRESENTATIVE FANSLER suggested that TVEP provides an opportunity for such a worker to get a job with a respectable living wage to bring back to the community and help the overall economy of Alaska. He noted that billions of dollars leave the state each year with people that don't live in Alaska: He said, "They're working two on, and then they're flying down to live their two off." He observed that such money is being taken out of the Alaskan economy and is directly impacting Alaskans. He remarked: We want those jobs to being going to folks that are going to - if they are taking a two on, two off, they're going to return to your ... region; they're going to come back, and they're going to put that money back ... into the economy locally. REPRESENTATIVE FANSLER offered that the goal of HB 141 is to train Alaskans to do Alaska's jobs. 3:28:53 PM REPRESENTATIVE STUTES asked whether the funds for the program come from "the unemployment that is paid." REPRESENTATIVE FANSLER answered yes. REPRESENTATIVE STUTES offered her understanding that unemployment insurance would not be reduced even if the TVEP program were discontinued. REPRESENTATIVE FANSLER agreed. He remarked: This is not going to be a means of putting money back in the pockets of currently working Alaskans. This is money that is simply designated from that unemployment removal to make sure that we can get as many Alaskans back to work as possible. 3:29:56 PM REPRESENTATIVE WOOL asked where the Alaska Technical Center is located. REPRESENTATIVE FANSLER said it is in Kotzebue, Alaska. 3:30:14 PM REPRESENTATIVE JOSEPHSON asked if other states make similar investments with unemployment insurance benefits. He also asked what percent of all the collected unemployment insurance TVEP receives. REPRESENTATIVE FANSLER said he would follow up with information on other states' unemployment investments. He noted that TVEP receives .16 percent of the employee unemployment insurance contributions. 3:31:34 PM REPRESENTATIVE BIRCH asked if [paying unemployment] is optional to the employee. He said, "Obviously, if people ... choose to have a benefit, then they can opt to." He offered his understanding that the program is basically just "layered into" what is perceived to be unemployment insurance; however, the program takes $5 million from working people's paychecks to fund training all over the state. REPRESENTATIVE FANSLER responded that there is a good chance the working Alaskans [who contribute to unemployment insurance] have passed through TVEP programs to qualify for their jobs. He suggested that they are paying back into a system that has already benefited them. He mentioned that the program provides training at a reasonable price close to communities allowing individuals to become a "very important part of our fiscal climate." REPRESENTATIVE BIRCH pointed out that employees don't have a choice to participate. 3:33:33 PM CHAIR KITO indicated that the money is being paid by the employees regardless of whether or not the TVEP program continues. He commented that the program provides opportunities for retraining individuals who might need to change career paths. He remarked: Not having that opportunity, I think, is going to be a challenge for Alaska, especially when we see a contraction in the economy where people might need to be retrained. So, we could we let the program go away, but then we're not going to have opportunities for individuals in Alaska that could get the training that could get them into productive careers in the future. So I do think that the idea is ... keep the program going so we can keep some training available for people that might need to change careers. REPRESENTATIVE BIRCH asked for clarification that the program is paid for with unemployment insurance. CHAIR KITO answered, "Correct." 3:34:34 PM REPRESENTATIVE KNOPP expressed that Representative Birch's concerns are unrelated to HB 141. He noted that the bill extends the deadline by five years and allocates a percentage of money already collected. 3:35:05 PM REPRESENTATIVE FANSLER agreed that the bill does not affect how much is taken out of the unemployment compensation. Rather, the bill designates a method to use those funds for vocational and technical education programs. 3:36:17 PM REPRESENTATIVE WOOL asked if the approximately $4 million [of TVEP funds] represents .016 of all [unemployment insurance] (UI) contributions. REPRESENTATIVE FANSLER clarified that it is .16 percent. 3:37:28 PM REPRESENTATIVE SULLIVAN-LEONARD asked how much unemployment insurance is captured on an average yearly basis since it began in 2000. 3:37:49 PM PALOMA HARBOUR, Director, Central Office, Division of Administrative Services, Department of Labor & Workforce Development (DLWD), responded that she does not have a rolling total from 2000. She explained that the amount projected to be available in the fund for distribution in fiscal year 2018 (FY 18) is almost $12 million, which is similar to the last three years. 3:38:49 PM CHAIR KITO asked whether $12 million is the entire collection of unemployment insurance or the amount available for TVEP. MS. HARBOUR clarified that it is the amount available for TVEP. 3:39:03 PM REPRESENTATIVE BIRCH asked what flexibility the legislature has in designating the use of the TVEP funds. MS. HARBOUR reported that the entities are designated in statute; therefore, the legislature decides who receives the funding and what percentage they receive. She noted that HB 141 is a straight reauthorization of the current distribution for five more years. REPRESENTATIVE BIRCH asked if the .16 percent is the percentage of the total unemployment insurance received by TVEP. MS. HARBOUR responded that .16 percent is the percent of each employee's UI taxable wage base - which is close to $40,000 - that goes into the TVEP fund for each employee. She noted that overall UI employment contributions vary each year, but on average they are about .5 percent of the taxable wage base. REPRESENTATIVE BIRCH asked, "So .16 goes into .5 about 3 times, so it's like 30 percent?" MS. HARBOUR responded, "That would makes sense." REPRESENTATIVE BIRCH concluded that 30 percent of the unemployment insurance is being redirected to TVEP funds. MS. HARBOUR answered no. She explained that 30 percent of an employees' contribution goes to TVEP, and the employer pays another .7 percent. REPRESENTATIVE BIRCH described that one-third of employee's contribution is being directed by the legislature to these programs. He asked whether there are any constraints on the percentages. He said he is challenged by the idea that unemployment insurance is funding education. MS. HARBOUR stated that [the legislature] could direct up to 100 percent of the employee contribution to TVEP. She explained that doing so would impact the amount contributed by the employer: There is a formula describing how much money needs to be collected to support unemployment insurance. She remarked, "If you decide to divert more of the employee's contribution to training programs, then the employer will have to fund more of that total contribution that's needed to fund unemployment insurance." REPRESENTATIVE BIRCH said that unemployment insurance is supposed to be available to those who are unemployed. He offered his belief that using a third of the insurance to fund an education program for those who are already employed is not using the funds as they were originally intended. 3:43:24 PM HEIDI DRYGAS, Commissioner, Department of Labor & Workforce Development (DLWD), said she will follow up with the percentage of overall UI [that goes to TVEP]. She offered her understanding that TVEP has been working since 2000. She offered that the adage 'A rising tide lifts all boats' really encapsulates what the TVEP program is about. She stated that UI is an insurance program which kicks in when someone is out of work. She explained that the TVEP programs fall "squarely within the ambit of unemployment insurance." She opined that the idea is for people to collectively have a portion of their insurance syphoned off to help all Alaskans go back to work. She noted that TVEP has 10 recipients across the state who use the money to train Alaskans for jobs - which is why UI was created. She noted that the program has been extremely successful and the department fully supports the program. REPRESENTATIVE BIRCH expressed that he buys insurances which benefit him or his beneficiaries. He opined that the one-third of employees' contributions to unemployment insurance is being taken away to train other people, which does not benefit the payers. He offered that [the TVEP program] doesn't fill the role of insurance since it does not benefit the payer. Syphoning off a third of $12 million to support colleges and learning academies is not insignificant. He again noted that he is not comfortable with using unemployment insurance for that purpose. 3:46:24 PM CHAIR KITO offered that he pays for auto insurance without receiving a benefit unless he is in an accident. He stated, "I can pay for many years and not receive a benefit of that insurance." He added that [employees] pay to try and benefit the overall program which provides education and retraining for unemployed individuals. 3:47:10 PM FRED VILLA, Associate Vice President, Workforce Programs, University of Alaska Fairbanks (UAF), testified in support of HB 141. He stated that the university uses TVEP funding to respond to the needs of the state of Alaska with outreach, academic, certification, and professional development programs. He said that the funding is critical to provide the size, scope, and quality of the programs and is critical to the access to programs throughout the state. He relayed that the university is focused on career pathways, opportunities for economic development, and high-demand jobs in areas throughout the state. He remarked: We work specifically based on the priorities established by the [Alaska] Workforce Investment Board, in priority industries and occupations. So this is a critical[ly] important program to the university as we look at addressing issues across the state. MR. VILLA drew attention to documents [included in the committee packet] which show the milestones and contributions TVEP has made across the university system. He explained that TVEP has helped all health related fields, which is the largest industry sector in the state; TVEP has helped double the number of engineers; and it has helped high school students receive double credit for technical skills. 3:49:53 PM PEARL BROWER, Ph.D., President, Ilisagvik College, testified in support of HB 141. She explained that Ilisagvik College is Alaska's only tribal college and only independent community college. In the fall of 2016, it was rated the number two community college in the nation and Alaska's number one community college. Ilisagvik College is a public institution accredited by the Northwest Commission on Colleges and Universities. She stated that Ilisagvik College advocates for the reauthorization of the TVEP funds through HB 141. Ilisagvik College is among nine other organizations that are part of the [TVEP] program and that all have a mission of providing quality, workforce development designed education to support the needs of Alaskans. DR. BROWER noted that Ilisagvik College receives five percent of the allocated TVEP funding. The funding has allowed Ilisagvik to serve over 700 students. She stated that Ilisagvik College ranks the highest in 2016 performance measures among the programs that receive TVEP funding. She relayed that 82.7 percent of Ilisagvik's TVEP students were employed with a median wage of over $24,000 within seven to twelve months of exiting the program. DR. BROWER explained that TVEP allows Ilisagvik College to offer training opportunities to residents across the state in order to get credentialed for jobs or to advance in their current jobs. Due to the many required certifications, many employed residents must get certified and recertified every year. She stated that without TVEP funding, Ilisagvik College would not be able to reach as many Alaskans or provide as many workforce development training opportunities. She remarked: As we look to the future, I believe we all know that education must be a priority for all of us Alaskans. We must continue to support programs that provide opportunity for the future of our state. At Ilisagvik, we say, "More education, more options, more out of life." 3:52:44 PM DENNIS DISHION, Executive Director, Yuut Elitnaurviat, testified in support of HB 141. He explained that Yuut Elitnaurviat translates to "The people's learning center." The center educates local people for family-wage jobs locally. Various programs use TVEP funding for new training and incumbent worker training, and several programs operate on an as-needed basis. He remarked, "All of our programs are structured to where people go to work at the completion of their program." In FY 16, Yuut Elitnaurviat serviced 724 individual students with 1,082 services given. MR. DISHION noted that the programs at Yuut Elitnaurviat include: National Center for Construction and Education Research certifications, adult basic education, [General Educational Development](GED) training, dental assistant and health aid therapy training, certified nursing training, federal apprenticeship programs for plumbers and electricians, driver's license and CDL programs, and other various on-demand trainings that lead directly to employment. He said that TVEP is important to Yuut Elitnaurviat to maintain its structure and the ability to train local Alaskans close to their home for high- paying jobs. 3:54:44 PM CHAIR KITO opened public testimony on HB 141. 3:55:08 PM JOEL ALOWA, Community Health Services Director, Maniilaq Association, testified in support of HB 141. He explained that the Maniilaq Association is a regional non-profit that provides medical, social, and tribal services for the 8,500 residents of the Northwest Artic Borough and the community of Point Hope. He said that the Maniilaq Association has an important working relationship with the Alaska Technical Center (ATC) in Kotzebue, which provides training and training facilities for regional medical providers and water sanitation and infrastructure technicians. He observed that the medical and health field is continually changing with new practices and technology. He remarked, "Our partnership with ATC enables our staff to be trained and be provided with the best medical and health environment services possible to all of our regional and state residents." He stated his support of HB 141 and urged the reauthorization of funds for technical training. 3:56:39 PM ANISHA ELBIE, Co-executive Director, Southwest Alaska Vocational Educational Center (SAVEC), urged the committee's support of HB 141. She stated that with large declines in taxable wages, TVEP will have a shortfall of $1.32 million, and SAVEC will have a detriment of $39,600 for FY 18. She said that providing training and retraining Alaskans for Alaskan jobs becomes more important as more workers get displaced. She explained that SAVEC provides workforce training for 31 villages within its service area, which has a direct impact on the local economy. She remarked: In the state's 2014 wage report for SAVEC, 115 [Hazardous Waste Operations and Emergency Response] (HAZWOPER) trainees contributed over $5 million to the state's economy in the first year after training. This April, SAVEC will have three HAZWOPER restructure courses and one 40-hour HAZWOPER class. These students ... will continue to add to the local and state economy. MS. ELBIE noted that SAVEC is working to improve the hiring of Alaskans in the seafood processing industry. She acknowledged that the state has made gains in hiring residents but still battles [high] non-resident hire. She pointed out the Bristol Bay Borough has a non-resident hire rate of 93.8 percent, Dillingham 84.6 percent, and Lake and Peninsula Borough 91.3 percent. This amounts to over 3,300 jobs and over $29 million that could have stayed in the state and multiplied in the local economy. She expressed that SAVEC provides workforce training through strong partnership funding including TVEP and local contributions from regional organizations: the Bristol Bay Native Corporation, the Bristol Bay Native Association, the Bristol Bay Borough, and the Bristol Bay Housing Authority. She stated that the [University of Alaska Fairbanks] (UAF) Bristol Bay Campus and the Bristol Bay Economic Development Corporation provide contributions directly for training. Since the fall of 2016, 152 students have been trained in 22 classes at SAVEC, and there are 12 more trainings planned this spring. She thanked the committee and the bill sponsor. 4:00:06 PM ANNETTE CARUSO, Co-executive Director, Southwest Alaska Vocational Educational Center (SAVEC), testified in support of HB 141. She stated that she had nothing further to add to Ms. Elbie's testimony. 4:00:19 PM D'ANNE HAMILTON, Personnel Officer, Teck Alaska, testified in support of HB 141. She explained that Teck Alaska operates the Red Dog mine in Northwest Alaska and employs 600 people at its busiest time of the year. She stated that Teck Alaska works closely with the Alaska Technical Center and provides input to develop [Alaska Technical Center's] (ATC) process technology program. She noted that the ATC responded quickly to Teck Alaska's request for more soft skill development, which was important to Teck Alaska. She explained that ATC revised its schedule to demonstrate to students what working long days at a mine would be like and show a realistic viewpoint of life in a mine. MS. HAMILTON offered her belief that [training at ATC] improves employee retention. She noted that Teck Alaska recently brought 11 ATC students to the mine to build on ATC training by providing job shadow experience and allowing the students to see firsthand the work they could be doing after completing training. She remarked that ATC helps students gain access to high-paying jobs and make connections to the industry that would likely not have happened without ATC. Through its process technology and millwright maintenance programs, ATC works very hard to teach the skills needed at the mine. She expressed that TVEP funding is important for ATC to continue its work and she urged the committee to reauthorize funding for TVEP by passing HB 141. 4:02:28 PM CHERYL EDENSHAW, Director, Alaska Technical Center (ATC), testified in support of the reauthorization of funding for TVEP proposed under HB 141. She noted that ATC is recognized by the state as a statewide post-secondary training center eligible for TVEP funding. She thanked the committee and the State of Alaska for the support of workforce development by investments to ATC over the years. She stated that ATC has key partnerships with business and industry to train safe and responsible Alaskan workers and to help develop and sustain the state's economy. She remarked: Without the TVEP funds, we would not be in a position to maintain our long-term commitment to meet employers' needs in the local and statewide economy that we fulfilled since our inception in 1981. Without TVEP funding, we would not be able to provide training necessary for jobs in the ... areas of health care, resource development, process technology, culinary arts, and construction training. We would also be not poised to respond to employers' market- driven, on-demand training needs in a timely fashion to align with those job opportunities. I urge you to support reauthorization of TVEP and, with the state's help, we can build a future for Alaskans strengthening our families and communities across the state. 4:04:35 PM KAREN CEDZO, Partners for Progress in Delta, testified in support of HB 141. She explained that Partners for Progress in Delta has been a part of TVEP's regional training center group since 2008. Partners in Progress for Delta came about as a result of the U.S. Department of Defense (DoD) identifying a lack of skilled workers in Delta Junction when it was making the decision whether to establish a ground-based military installation in Delta Junction. She noted that the DoD completed an economic development report identifying a lack of skilled workers, which resulted in the Delta/Greely School District taking the lead to bring educational partners together. This led to a very formal educational consortium which includes partners such as: the Delta/Greely School District, the Alaska Works Partnership, the UAF Community and Technical College, and the UAF Cooperative Extension Service. She stated that all the partners have a dedicated vision of building Alaska's workforce through education and training. MS. CEDZO stated that "the board" remains committed to that mission. She stated her interviews with students involved in the program have shown her how life-changing the program is, especially for the young people in the community. She stated, "Many would not have the opportunity to go on and get real jobs and be able to contribute to a fund that makes it possible for those in need to be assisted." She noted that some young people who do not plan on attending college are not sure what do to with their lives. The quality of the augmented career and technical classes at the Delta/Greely High School operated by Delta/Greely School district and Partners for Progress in Delta would be at risk without TVEP funding. MS. CEDZO explained that some high school students are taking dual-credit courses such as occupational endorsements for welding, certificates in applied business, expanded health classes, construction trade, math for a trade, English 111, and other core requirement classes. Additionally, a wealth of programs are offered through [UAF] Cooperative Extension for pesticide certification and agricultural related programs. She relayed that there are adults in Delta who are not able to go to Fairbanks to earn a degree, but can work towards a degree in Delta with the local access to the facility. She stated, "It's an amazing experience to walk into that building and see young people's eyes light up getting an idea of what might be an option for a career path in their future." She added that a significant component of the program is the entry-level summer construction trade academy which is a three-week intensive training program in Delta. It is an approved training program from which some participants might have direct opportunities. MS. CEDZO explained that since the inception of the academy in 2006, more than 125 participants have been accepted for opportunities in apprenticeships or construction trade related industry [positions]. She indicated that the academy's twelfth program would be offered in June as a three-week intensive program. Students walk away from the program with work ethic and safety skills, as well as certifications in such things as [Mine Safety and Health Administration] (MSHA), [Occupational Safety and Health Administration] (OSHA), and forklift training. She listed that participants of the program have come from North Pole, Delta, Tok, Glen Allen, Valdez, Juneau, and some rural villages. She stated that the program has a very successful working relationship with the operating engineers. 4:10:13 PM CHAIR KITO announced that HB 141 was held over.