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[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

    REMOVING RED TAPE FROM THE DEPARTMENT OF LABOR'S APPRENTICESHIP 
                            APPROVAL PROCESS

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON REGULATORY REFORM
                        AND PAPERWORK REDUCTION

                                 of the

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                   WASHINGTON, DC, SEPTEMBER 25, 2001

                               __________

                           Serial No. 107-29

                               __________

         Printed for the use of the Committee on Small Business

                  U.S. GOVERNMENT PRINTING OFFICE
76-009                     WASHINGTON : 2001

____________________________________________________________________________
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                      COMMITTEE ON SMALL BUSINESS

                  DONALD MANZULLO, Illinois, Chairman
LARRY COMBEST, Texas                 NYDIA M. VELAZQUEZ, New York
JOEL HEFLEY, Colorado                JUANITA MILLENDER-McDONALD, 
ROSCOE G. BARTLETT, Maryland             California
FRANK A. LoBIONDO, New Jersey        DANNY K. DAVIS, Illinois
SUE W. KELLY, New York               BILL PASCRELL, Jr., New Jersey
STEVE CHABOT, Ohio                   DONNA M. CHRISTENSEN, Virgin 
PATRICK J. TOOMEY, Pennsylvania          Islands
JIM DeMINT, South Carolina           ROBERT A. BRADY, Pennsylvania
JOHN R. THUNE, South Dakota          TOM UDALL, New Mexico
MICHAEL PENCE, Indiana               STEPHANIE TUBBS JONES, Ohio
MIKE FERGUSON, New Jersey            CHARLES A. GONZALEZ, Texas
DARRELL E. ISSA, California          DAVID D. PHELPS, Illinois
SAM GRAVES, Missouri                 GRACE F. NAPOLITANO, California
EDWARD L. SCHROCK, Virginia          BRIAN BAIRD, Washington
FELIX J. GRUCCI, Jr., New York       MARK UDALL, Colorado
W. TODD AKIN, Missouri               JAMES R. LANGEVIN, Rhode Island
SHELLEY MOORE CAPITO, West Virginia  MIKE ROSS, Arkansas
BILL SHUSTER, Pennsylvania           BRAD CARSON, Oklahoma
                                     ANIBAL ACEVEDO-VILA, Puerto Rico
                      Doug Thomas, Staff Director
                  Phil Eskeland, Deputy Staff Director
                  Michael Day, Minority Staff Director
                                 ------                                

            SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT

                     MIKE PENCE, Indiana, Chairman
LARRY COMBEST, Texas                 ROBERT BRADY, Pennsylvania
SUE KELLY, New York                  BILL PASCRELL, Jr., New Jersey
SAM GRAVES, Missouri                 CHARLES GONZALEZ, Texas
ROSCOE BARTLETT, Maryland            DAVID D. PHELPS, Illinois
TODD AKIN, Missouri                  JAMES R. LANGEVIN, Rhode Island
PAT TOOMEY, Pennsylvania             ANIBAL ACEVEDO-VILA, Puerto Rico
                Barry Pineles, Professional Staff Member

                            C O N T E N T S

                                                                   Page
Hearing held on September 25, 2001...............................     1

                               WITNESSES

Wicker, Hon. Roger, U.S. House of Representatives................     4
Dunham, Ken, Executive Director, Inland Northwest AGC............     9
Bonk, John, President, M. Davis & Sons, Inc......................    11
Herzog, John, Staff VP for Public Policy, Air Conditioning 
  Contractor of America..........................................    13
Krul, Robert, National Apprenticeship Coordinator, United Union 
  of Roofers, Waterproofers and Allied Workers...................    15

                                APPENDIX

Opening statements:
    Pence, Hon. Mike.............................................    28
    Brady, Hon. Robert A.........................................    31
Prepared statements:
    Wicker, Hon. Roger...........................................    37
    Dunham, Ken..................................................    40
    Bonk, John...................................................    47
    Herzog, John.................................................    58
    Krul, Robert.................................................    65
Additional material:
    Prepared statement of Mechanical Electrical Sheet Metal 
      Alliance...................................................    69
    Letter to Chairman Pence from Kathleen Garrity, Associated 
      Builders and Contractors of Western Washington.............    76
    Letter to Chairman Pence from Edward Sullivan, Building and 
      Construction Trades Department.............................    78

 
    REMOVING RED TAPE FROM THE DEPARTMENT OF LABOR'S APPRENTICESHIP 
                            APPROVAL PROCESS

                              ----------                              

                      TUESDAY, SEPTEMBER 25, 2001

              House of Representatives,    
          Subcommittee on Regulatory Reform
                                     and Oversight,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:00 a.m. in room 
2360, Rayburn House Office Building, Hon. Mike Pence (chairman 
of the subcommittee) presiding.
    Chairman Pence. This hearing will come to order.
    I would like to welcome all of the participants, as well as 
the ranking member of the Subcommittee on Regulatory Reform and 
Oversight, the gentleman from Pennsylvania, Mr. Robert Brady.
    I want to welcome you to the hearing entitled Removing Red 
Tape from the Department of Labors Apprenticeship Approval 
Process. We have a spate of expert witnesses as well as the 
author of important legislation on this issue.
    Let me begin with a few short thoughts and then we will 
move immediately to my colleague's opening statement and then, 
of course, testimony. My expectation is that the members in the 
room can expect a vote between 10:30 and 11:00. In the event 
that there is a vote on the floor, anyone in attendance and 
witnesses should be advised that we will simply recess for a 
brief period of time and then reconvene. We will complete this 
subcommittee hearing today in the midst of what will probably 
be a busy schedule across the street.
    The hearing today, of course, addresses the need for 
reforming our regulatory procedures used to approve 
apprenticeship programs in the United States. I am honored to 
be a co-sponsor of H.R. 1950, the Apprenticeship Enhancement 
Act of 2001, authored by my good friend in attendance today, 
the gentleman from Mississippi, Mr. Wicker.
    I look forward to his testimony and that of other witnesses 
who will discuss the procedures for registering a federal 
apprenticeship program and the problems they face in receiving 
such approval.
    As the Secretary of Labor recently noted in her Labor Day 
address on the state of the workforce, America, more than ever, 
needs a skilled workforce. The office buildings of our cities, 
the shopping centers of our suburban towns, the homes of our 
rural counties are all built by skilled craftsmen who have 
mastered their art through apprenticeship programs. What 
concerns me and should concern every member of Congress, the 
Administration and businesses is whether America has the 
processes in place to train a new generation of skilled 
craftsmen.
    Since at least the time of the Middle Ages, young men and 
now young women in the modern era have learned trades at the 
hands of masters. The thousands-of-year-old process of training 
new workers continues today.
    During the heights of the worst economic disaster in 
American history, the Great Depression, Congress enacted what 
came to be known as the National Apprenticeship Act to ensure 
that employers did not take advantage of young workers' need 
for training and jobs. The National Apprenticeship Act requires 
that the Secretary of Labor promulgate standards to ensure the 
welfare of apprentices. The act also requires that the 
secretary works with the states to carry out this function. I 
think it is absolutely vital for the future of this country to 
ensure that apprentices are protected yet trained well enough 
that they have a mobility to move where the labor markets 
dictate that they are needed.
    The Department of Labor regulations set forth the criteria 
by which any employer should be able to obtain approval of an 
apprenticeship program. Approval is sought either from the 
United States Department of Labor or a state apprenticeship 
council given that authority by the federal government. An 
applicant that meets the criteria set forth by the Secretary 
should have the program approved with all deliberate speed 
without regard to who is sponsoring the apprenticeship program.
    If the applicant does not meet the criteria, the Department 
or State Apprenticeship Council should provide a written 
explanation of the deficiencies so the applicant can modify the 
program accordingly. The appropriate government agency then 
should meet quickly when the application is resubmitted to 
approve the modified program.
    Yet these simple procedures are not evident in the approval 
of apprenticeship program in America today. In certain 
instances, it has literally taken years and multiple lawsuits 
to obtain approval of a qualified apprenticeship program and 
this is unacceptable. Such behavior, whether at the federal or 
the state level, is wrong and it is our purpose in this 
subcommittee hearing to entertain a proposal before the 
Congress to address this inequity. That is one reason I have 
decided to co-sponsor H.R. 1950 and I believe it would provide 
regulatory certainty to a process fraught with unbridled 
discretion and endless meetings of federal and state 
bureaucrats.
    Ultimately, I think 1950's reforms will help all employers 
interested in providing our young men and women with training 
in skilled crafts that this country will need for not only the 
economic growth of the 21st century but also the economic 
dynamism that our nation may well need in the long struggle 
into which we entered two weeks ago today.
    With that, I yield to the ranking member of this 
subcommittee who is kind to join us today and I recognize Mr. 
Brady for any opening comments.
    [Chairman Pence's statement may be found in appendix.]
    Mr. Brady. Thank you. Thank you, Mr. Chairman. And for the 
sake of time, I am going to make some brief remarks and would 
ask unanimous consent to submit the rest for the record.
    Chairman Pence. Without objection.
    Mr. Brady. Thank you.
    As the population ages and the number of potential workers 
decline, we must find ways to help meet a new demand for 
skilled labor. One way which has been suggested is by changing 
the federal apprenticeship programs.
    Since 1937, the apprenticeship program has a record of 
great success: 440,000 workers are trained under apprenticeship 
programs held to high standards of excellence in the skilled 
trades. We depend upon these workers to make sure that our 
buildings are well built. Sometimes we take for granted how 
well our buildings are put together. In Japan, they build homes 
to last 30 years. In America, we build them to last a century. 
That is the result of high standards of training in skilled 
trades like construction, roofing, plumbing and electrical 
wiring.
    This program makes sure that when you buy a new home and 
turn on the faucet, you do not blow an electrical fuse. The men 
and women who have graduated from apprenticeship programs are 
the professionals who built this country.
    Clearly, we want the strongest apprenticeship programs 
possible. The proposal under consideration does nothing to 
strengthen the current program and, in some instances, may 
weaken it.
    Proponents of this bill see backups and lack of action on 
applications as the problem. I can understand and appreciate 
that frustration. There is a labor shortage in the skilled 
trades and training programs are needed. But the solution is 
not to waive the standards that maintain apprenticeship 
programs at such high quality.
    At best, Mr. Chairman, the proposal in this bill is only a 
small piece to the puzzle. I look forward to working with my 
colleagues in finding a sensible solution to the current 
skilled labor shortage, one that maintains our training 
standards and our apprentice programs and ensures the quality 
workmanship that makes America proud.
    I feel real, real close to this issue. I am not an expert 
on anything, but I am close to an expert on this. I graduated 
from a four-year apprenticeship program in the carpenters 
union. I still carry a current card there. And I am close the 
apprenticeship programs. I tutor on every Tuesday night that I 
am not here and have been for the last seven, eight years in 
our programs that help these young men and women get into them.
    We do need them. It is necessary and, again, I cannot 
express enough of my abilities that I can lend toward helping 
making this remedy the situation that we do find ourselves in. 
So I am pledging to work along with you and with my colleagues 
in trying to come up with a decent solution.
    Thank you.
    [Mr. Brady's statement may be found in appendix.]
    Chairman Pence. Thank you, Mr. Brady.
    And with that, we will recognize our first witness, the 
Honorable Roger Wicker of Mississippi, the author of the 
Apprenticeship Enhancement Act of 2001.
    Good morning.
    We will recognize the gentleman from Washington to 
introduce a constituent and friend before returning to Mr. 
Wicker.
    Mr. Nethercutt, welcome.
    Mr. Nethercutt. Thank you, Mr. Chairman, Mr. Brady, and I 
thank my colleague and my dear friend Mr. Wicker for yielding 
for a moment. I apologize for this.
    I am delighted to be here before the subcommittee to 
introduce Ken Dunham, who will testify on a panel after Mr. 
Wicker testifies.
    I have known Ken Dunham for years. He is a northwesterner. 
He is affiliated with the Association of General Contractors in 
Spokane, Washington. He has a wealth of experience, Mr. 
Chairman, about apprenticeship programs, about the labor force, 
and about the need to have a strong labor force in my region of 
the country. He will be a valuable witness as the subcommittee 
considers this bill. I appreciate your welcoming him, all of 
you here, and I am delighted to have a chance to say a good 
word about Ken Dunham. He is a fine man, a very credible 
citizen with respect to the issues that are facing the 
committee and so I am delighted to do so.
    And I again thank the chairman for his indulgence and I 
thank Mr. Wicker for his and I apologize for having to leave 
early.
    Chairman Pence. Not at all. Thank you very much.
    With that, the author of this legislation, the gentleman 
from Mississippi, Mr. Wicker, is recognized.
    Mr. Wicker. Thank you, Mr. Chairman.

STATEMENT OF HON. ROGER F. WICKER, A REPRESENTATIVE IN CONGRESS 
                 FROM THE STATE OF MISSISSIPPI

    Mr. Wicker. I do appreciate the subcommittee having this 
hearing and allowing me to testify and I appreciate the remarks 
of both gentlemen who have spoken. I am delighted to know that 
Mr. Brady is a graduate of an apprenticeship program and is 
still involved in that process and I am glad to see that both 
of you have spoken in support of the concept. I think that 
every member of Congress certainly would like to make the 
process better if we can do so.
    My remarks today and my legislation deal simply with 
streamlining the approval process. There may be other things 
that we need to discuss with regard to apprenticeship programs, 
but that is what H.R. 1950 deals with. Let me just say I want 
to talk a little more about what an apprenticeship program is 
and should be, why they need to be registered, why there is a 
need for more skilled workers and then spend a little time 
talking about actual experiences that I have learned from 
business people and contractors in my own district and then a 
brief discussion of my legislation.
    Mr. Brady mentioned 440,000 apprentices in the United 
States now. I had the number of approximately 400,000. But 
certainly while that is a large number of men and women being 
trained, I think we should have the goal of raising that figure 
to one million. Everything I hear is that we need a large 
increase in the number of skilled workers because these 
apprentices are our future electricians, carpenters, plumbers, 
pipe fitters and mechanics.
    And, as Mr. Brady said, they are more educated, they are 
more highly motivated, more productive, better skilled. They 
are more likely to become supervisors. And they are more likely 
to earn higher salaries and experience less unemployment. So we 
need more apprentices and I think we can all agree on that.
    Certainly the reason for registering the apprenticeship 
programs is that only the registered ones are permitted to pay 
apprenticeship wages on projects where there is federal 
funding. Also, many municipalities and states require that the 
apprenticeship program be registered in order to qualify for 
the apprenticeship wage.
    Mr. Chairman and members of the subcommittee, two years 
ago, contractors from my home state of Mississippi came to 
Washington to discuss the challenges facing the construction 
industry. They listed a number of items but they all agreed 
that the critical shortage of skilled workers was a paramount 
issue in the industry.
    One of the electrical contractors related the type of 
apprenticeship program horror story which discourages other 
potential program sponsors from even formulating an 
application. In seeking approval for a line erector's 
apprenticeship program in the State of California, this 
Mississippi company spent nearly $1 million and five years 
before the program was finally approved and then only after a 
successful lawsuit.
    It took the same company two years and $250,000 in expenses 
in the State of Washington not to even get an answer. It is not 
that the program was denied because it was a poor plan. No one 
ever said that. But the State Apprenticeship Council or the SAC 
in that state did not even give the program sponsor an answer.
    After these experiences, the company no longer seeks 
approval of their apprenticeship programs in states that are 
governed by State Apprenticeship Councils.
    During this meeting, the other contractors in the room all 
nodded their heads in understanding. Either they or someone 
they knew had similar experience. The costs in time and money 
to obtain approval for apprenticeship programs is a strong 
disincentive to sponsoring programs of their own. Therefore, 
there are not enough new programs that are submitted for 
approval and the costly and lengthy delays in the approval 
process are denying job training opportunities to thousands who 
are awaiting approval.
    So, members of the subcommittee, to address these concerns, 
I have introduced H.R. 1950, the Apprenticeship Enhancement 
Act. This legislation does not change the standards which are 
required of apprenticeship programs in any way. Those are not 
changed at all under this legislation. Without sacrificing 
standards, we can create more apprenticeship programs, thereby 
creating more job training opportunities.
    All this legislation does is remove bureaucratic roadblocks 
so that apprenticeship programs which meet federal standards 
can be approved in a timely manner, and so that potential 
program sponsors are not discouraged by approval processes that 
can cost hundreds of thousands of dollars and many years.
    The bill currently has 24 bipartisan cosponsors.
    H.R. 1950 requires that the U.S. Department of Labor Bureau 
of Apprenticeship Program and Training, BAT and State 
Apprenticeship Councils, SACS, act on applications within 90 
days after an application is submitted. This should be 
sufficient time for these government agencies to make a 
decision. It should not take more than three months to 
determine if an apprentice application meets the 22 basic 
elements of an acceptable apprenticeship program.
    However, my legislation allows for unforeseen 
circumstances. If for any reason a SAC or BAT cannot render a 
decision within 90 days, they can notify the applicant of the 
status of the application and then make a decision within the 
next 30 days. If after the additional 30-day period there is 
still no verdict, the application would then be forwarded to 
the U.S. Department of Labor. The purpose of this provision is 
to eliminate the possibility of a pocket veto by either a BAT 
or a SAC.
    In addition to these reasonable time lines, H.R. 1950 also 
requires a written justification for disapproval of an 
application. With this explanation, sponsors of programs which 
are denied can work with the agencies to improve their programs 
so that they submit new and approved applications. The 
legislation also allows for an appeal to the Department of 
Labor if the applicant believes that their program was 
improperly denied.
    This legislation, I repeat, does not change standards and 
does not provide for unlimited appeals on the part of a program 
sponsor. Instead, the bill does just one thing; it asks for an 
answer from the government agency.
    I appreciate the opportunity to testify before you on the 
concept of streamlining the application process and I would 
urge the subcommittee to give favorable consideration to the 
legislation, Mr. Chairman.
    [Mr. Wicker's statement may be found in appendix.]
    Chairman Pence. Thank you for that testimony. I know it is 
not customary to ask too many questions of members, but I 
wondered if I might, rather than a question, ask you to 
elaborate on your assertion today that I think is very relevant 
to both sides of this subcommittee that your legislation does 
not change the standards which are required of apprenticeship 
programs in any way.
    In evidence today and in other discussions about your bill, 
there seems to be an impression that it does and I wanted to 
ask you, if time permits, for you to elaborate on that, however 
briefly.
    Mr. Wicker. Well, I would suggest that persons who are 
concerned about that particular issue simply need to read the 
legislation. This is a bill simply about the approval process 
and Ireally cannot state any stronger than that that we leave 
the standards the same. Perhaps the standards need to be revisited by 
the Congress. I do not know. Perhaps they need to be visited by the 
various agencies. But this bill is very narrow in its scope and it 
simply says that under the present standards and guidelines, changing 
none of the criteria whatsoever, the agency should simply give an 
answer: does the application qualify for approval or not?
    And I would submit to members of the subcommittee that 120 
days is ample time in order to see if an application on its 
face meets the criteria.
    Now, perhaps once a program is up and running, I am certain 
there are other safeguards to make sure that they are doing 
what the application proposed to do and promised to do, but 
this legislation simply deals with the question of whether the 
application is sufficient in order for the program to get 
started.
    Chairman Pence. Thank you.
    Mr. Brady, did you have anything else?
    Mr. Brady. Just I would not dare question you, I just 
wanted to ask you for help, so to speak.
    You did all the work on this and I appreciate it. Is there 
any way we could play with the standard or try to--not play 
with the standard, pardon me. With the application and the way 
the application is looked at to speed that up?
    The problem that I have is the 120 days they automatically 
get in and I think then there is no screening process 
whatsoever, there is no qualification whatsoever, and the 
problem with that is through an accredited apprenticeship 
program as I know, I went through one, you have to pass every 
year. And if you get applicants that should not be in the 
program originally, they may fail and you are loading up the 
process with first year apprentices that do not go to the 
second year, do not go to the third year and, in some cases, a 
third year and a fourth year. I went to a four-year program, 
some only have two and some have three. And if you 
automatically let somebody in, it is like waiting in line for 
something, if you wait long enough, you get in automatically.
    Maybe we could work on the problem that they cannot get to 
these people in time and give them some beefing up to make sure 
that they do have enough manpower or whatever the problem is to 
review these applications in time, within the 120-day period.
    Just letting somebody in can cause a problem. If you have 
120 people in the first apprenticeship class in the first year 
and 60 drop out because they should not have been there, then 
you are short in the second year and it is hard to get an 
apprentice--you do not let an apprentice in on your second 
year. They go in the first year and go through a four-year or 
two-year respectively program. That is the main problem that I 
have looking at this.
    And I would love to sit down and work with you a little 
further with it.
    Mr. Wicker. Well, I appreciate the sentiment of that 
question and I would be delighted to work with you on that and 
perhaps craft a bill that you could be a co-sponsor of.
    This bill is somewhat different from the legislation that I 
introduced during the previous Congress as a result of some 
conversations I had with people who had doubts about it, but 
let me address several of your concerns.
    First of all, the legislation does not provide for an 
automatic approval after the initial 90-day period with the 30-
day extension. All it says is that after that 120-day period if 
an agency will not give an answer, yes or no, then it goes up 
to a higher authority to make the decision. After the second 
period, which is a 30-day period, the application is then 
forwarded to the United States Department of Labor. It is still 
then an application and there is no directive in the 
legislation that says the Department of Labor should 
automatically approve it. It just says after 120 days we need a 
yes or no answer or we are going to give it to somebody who can 
look at it.
    So I hope that addresses your concern in that regard.
    Congressman, if there is a need for additional manpower in 
order to actually view the applications and see if they are 
adequate, then I think that is a legitimate issue that might be 
very cost effective for this Congress to look at, if we need 
more people to make the approval process run more efficiently.
    But there is no reason--and I hope you will agree with 
this, Congressman, there is no excuse for year after year after 
year, the same application not even receiving an answer, not 
even receiving a status report about what the problem is, what 
is wrong with this application. We certainly need to fix that 
aspect. And that is all this legislation does.
    With regard to an additional point that you made, if a 
program that submits an effective application is then up and 
running and proves not to be effective there should certainly 
be sanctions by the government agencies to address that 
particular problem.
    Chairman Pence. The chair would welcome the gentleman from 
Illinois, Mr. Phelps, and provide an opportunity for any 
opening comments that you might have.
    Mr. Phelps. Thank you.
    Chairman Pence. With that, again, our thanks to the 
gentleman from Mississippi for a direct and candid exchange. We 
are very grateful for your leadership on this issue.
    Mr. Wicker. I am grateful to you also, Mr. Chairman.
    Chairman Pence. And we will allow you to move on to a busy 
day and then ask our panel of four to move to the witness 
table.
    Thank you.
    I would like to welcome all of our witnesses to this 
hearing of the Subcommittee on Regulatory Reform and Oversight 
of the Small Business Committee. And I know I speak on behalf 
of the entire subcommittee in welcoming you and expressing 
appreciation for your time and expertise today.
    The procedure that we will follow is I will give a brief 
introduction of each witness and then you will be individually 
recognized after your introduction for what will be five 
minutes of time. Most of you are veterans of this institution, 
but for those that may not, you can observe the lights and 
respond accordingly. The yellow does not mean step on the 
accelerator, it means being to slow down and then the red means 
to wrap up your comments.
    We will entertain brief remarks from each of the witnesses 
in the interests of time and then move into any questions that 
your comments have stimulated from myself, the ranking member 
or the gentleman from Illinois or any other member that joins 
us.
    With that, Mr. Ken Dunham is with us, already having been 
generously introduced by the gentleman from Washington, 
Congressman Nethercutt, earlier today.
    Ken Dunham is Executive Director of the Inland Northwest 
AGC, a chapter of the Associated General Contractors of 
America, which is a national construction industry trade 
association. The Spokane-based organization has a membership of 
nearly 560 firms, representing the highway, utility and 
commercial building industry subcontractors and suppliers.
    Prior to coming to Spokane in 1993, Mr. Dunham held a 
similar position from 1990 to 1993 with the Montana Contractors 
Association. He is a graduate of the University of Montana with 
a degree in radio and television journalism, which is my 
background as well, so we will expect a stellar presentation. A 
native of Troy, Montana and is recognized for five minutes.
    Mr. Ken Dunham.

 STATEMENT OF KEN DUNHAM, EXECUTIVE DIRECTOR, INLAND NORTHWEST 
     AGC, SPOKANE, WASHINGTON, FOR THE ASSOCIATED GENERAL 
                          CONTRACTORS

    Mr. Dunham. Thank you very much. Good morning, Mr. Chairman 
and distinguished members of the committee. I am pleased to be 
here this morning to discuss the issue of apprenticeship 
training. My name is Ken Dunham. I am the Executive Director of 
the Inland Northwest Associated General Contractors in Spokane, 
Washington.
    The members of the AGC of America have consistently ranked 
the shortage of skilled construction labor among their most 
critical business issues. The construction industry needs more 
skilled workers. By encouraging the development of more 
registered apprenticeship programs, we will have more skilled 
and better trained craftspeople in all aspects of construction. 
We need to abandon those practices that have restricted 
apprenticeship registration.
    House Resolution 1950 will help bring some accountability 
to the approval process and is a great start to the process of 
raising both the number and the skill levels of our workers 
throughout construction.
    I hope to be able to provide the committee today with an 
illustration of how the approval process works in real life and 
impress upon you the need for reform and accountability.
    I have oversight of apprenticeship and training programs 
for the AGC chapter in Spokane. In this capacity, I serve as a 
trustee for the open shop/non-union carpenters' and 
construction equipment operators' apprentice program as well as 
serving as both a trustee and an apprentice committee member 
for an AGC Teamster's apprenticeship program. This background 
has allowed me to have that rare perspective of serving in both 
union and open shop apprenticeship programs.
    Until the early 1980s, most of the apprenticeship programs 
were administered as joint labor and management programs. 
Attempts to open up the process to non-union programs has met 
with some success in certain areas. However, patchwork 
acceptance of open shop programs does not help fill the need 
for more trained workers. We do believe that there is a place 
for both the union-affiliated apprenticeship programs and 
apprenticeship programs for the open shop segment of the 
industry.
    The Inland Northwest AGC attempted to gain approval for 
construction trade programs without success for ten years, 
beginning in 1983. The chapter applied for carpentry and 
construction equipment operator programs in January of 1994. In 
that same year, we re-submitted carpentry apprenticeship 
programs and operator programs for approval and were denied 
twice that year, despite the approval of both the SAC staff and 
the BAT staff in the State of Washington.
    Following those denials, we had no choice but to file suit 
against the Washington State Department of Labor and Industry, 
as well as each member individually of the State Apprentice 
Council.
    In January 1995, the two programs were finally approved 
after a council meeting that was punctuated by much shouting, 
threats, and the attempt of the council to go into an illegally 
closed meeting to discuss strategies to again deny our program.
    The end result was that the programs were finally approved. 
This action then resulted in the withdrawal of our lawsuit. The 
challenges to our programs continue today and include 
unwarranted, unreasonable and often contradictory demands for 
data and oversight.
    I have observed that that same level of oversight and 
interference is not present in the union program on which I 
serve as a trustee and a committee member.
    The latest issue with the State of Washington 
Apprenticeship Council was the July 2001 denial of approval for 
an open shop construction craft laborers apprentice program. 
The SAC rejected the program after vague, confusing and often 
contradictory arguments were made on the grounds that it was 
unnecessary because the union program was in place, that AGC 
jurisdiction lines did not match up with union lines and 
challenges were made on the professional and trade 
qualifications of the proposed members of the committee. None 
of these were valid criticisms and the programs again had 
garnered the support of both the SAC staff and the BAT staff. 
We have resubmitted the program for the next meeting in 
October.
    The AGC supports Congressman Wicker in his efforts and 
applauds H.R. 1950 as a step in the right direction. We welcome 
all attempts, legislative and regulatory, to improve a system 
that is so vital to the construction industry and the nation's 
economy.
    In the past, there have been efforts to improve, revamp and 
update the regulations governing apprenticeship. In the early 
1990s, the Department of Labor developed an initiative to 
improve the apprentice system in the nation. I list those ideas 
in which we agreed with the Department of Labor in my written 
comments.
    The AGC believes that this is a good time to revisit many 
of these ideas and to use the legislative and regulatory 
processes in concert with one another to improve the 
apprenticeship system.
    Thank you for your time and interest today in this crucial 
matter. I am happy to answer any questions that you might have 
regarding my testimony. It is my hope that together we can find 
a positive way to address the concerns raised and help workers 
secure and maintain rewarding careers in the construction 
industry.
    Thank you very much.
    [Mr. Dunham's statement may be found in appendix.]
    Chairman Pence. Thank you, Mr. Dunham.
    And, again, we will run through the witnesses and their 
presentations and then hopefully have a very productive 
dialogue with the members present.
    John Bonk is also with us today. He was raised in the 
Wilmington area, graduated from St. Elizabeth's High School and 
attended Drexel University and University of Delaware, where he 
started working in the construction field at a very early age. 
He was a certified welder an still holds a long boom crane 
operator's license.
    John started with M. Davis & Sons in 1978 as a project 
engineer when the company had 15 employees. he is currently 
president and part owner of that company now, which has over 
400 full-time employees and performs work both regionally and 
nationwide.
    He is also past president of the Delaware chapter of 
Associated Builders and Contractors and on the national board 
and is recognized for five minutes.
    Welcome, Mr. Bonk.

   STATEMENT OF JOHN BONK, PRESIDENT, M. DAVIS & SONS, INC., 
  WILMINGTON, DE, FOR THE ASSOCIATED BUILDERS AND CONTRACTORS

    Mr. Bonk. Good morning, Mr. Chairman and members of the 
committee. My name is John Bonk. I am President of M. Davis & 
Sons, Inc., located in Wilmington, Delaware.
    On behalf of Associated Builders and Contractors, I would 
like to thank Chairman Pence and the members of the 
Subcommittee on Regulatory Reform and Oversight for this 
opportunity to address ABC's concerns regarding the hurdles and 
often overburdensome procedures faced by businesses when they 
seek approval of their apprenticeship programs. I will be 
summarizing my comments, but I request that my full statement 
be submitted for the official record.
    Additionally, ABC chapters from Hawaii, Washington and 
California will be submitting additional comments regarding 
this issue and we request that their statements also be 
included in the record.
    Chairman Pence. Without objection.
    Mr. Bonk. For over 100 years, M. Davis & Sons has offered 
fully integrated industrial construction. We have built our 
reputation through providing quality workmanship for our 
clients and safe, healthy work sites for our employees. We 
normally have 60 to 70 registered apprentices. In addition, we 
employ a full-time training manager and spend in excess of 
$300,000 per year in training.
    M. Davis & Sons has been a member of the Delaware Chapter 
of ABC for 20 years. ABC is a national trade association 
representing more than 2300 merit shop contractors, 
subcontractors, material suppliers, and construction-related 
firms within a network of 82 chapters throughout the United 
States and Guam. According to the National Bureau of Labor 
Statistics, merit shop contractors comprised 87 percent of the 
construction workforce in 1997, up from 17 percent in 1947.
    Our diverse membership is bound by a shared commitment to 
the merit shop philosophy within the construction industry. 
This philosophy is based on the principles of full and open 
competition unfettered by the government and non-discrimination 
based on labor affiliation in the awarding of construction 
contracts to the lowest responsive bidder through open and 
competitive bidding. This process assures that taxpayers and 
consumers will receive the most for their construction dollars.
    ABC's commitment to quality training is unquestioned. 
Beginning in 1960 with the establishment of ABC's first 
apprenticeship program in Baltimore, ABC recognized that the 
future of the construction industry lies in its ability to 
attract and retain the men and women necessary to meet the 
nation's construction needs. ABC provides formal apprenticeship 
training programs that are registered with the Department of 
Labor's Bureau of Apprenticeship and Training. These programs 
meet all federal and state requirements for formal 
apprenticeship and prevailing wage work, including employer-
sponsored classroom instruction and on-the-job training. Upon 
successful completion, craft workers are recognized at the 
journey level in their trade and awarded their BAT certificate.
    The depression-era National Apprenticeship Act which serves 
as the basis for the voluntary national apprenticeship system 
is no longer responsive to needs of both employers and 
employees. The regulations which govern apprenticeship do not 
address the new and innovative training techniques that are 
utilized by employers and employees today.
    Delaware has a state-sponsored apprenticeship program. 
While the State Department of Labor employees who administer 
the program are dedicated individuals, the program is 
antiquated and hamstrung by bureaucracy. Because of the time 
and effort it would take to register ABC's apprenticeship 
program in Delaware, the contracting community has accepted the 
status quo.
    Over the years, Delaware has lost much of its manufacturing 
base and construction could fill the job void this has left. 
Unfortunately, numerous apprenticeship problems preclude this. 
It is hard to keep students in the apprenticeship training 
because they get bored with the outdated training methods. Lack 
of reciprocity with neighboring states make it economically 
unwise to utilize apprentices in some instances.
    In Delaware and nationally, we have an ever increasing need 
for skilled people which is going unanswered. The contracting 
community is willing to invest the time and money it would take 
to establish good apprenticeship programs, but are reluctant in 
the face of the government.
    ABC is looking to accomplish five things. The first of 
those is due process. Through the enactment of the 
Apprenticeship Enhancement Act of 2001 sponsored by 
Representative Roger Wicker and Ruben Hinojosa, the federal 
government could restore much needed balance and fairness to 
the approval of apprenticeship programs.
    Reciprocity. It is essential to require one state's 
apprentices to recognize those registered in other states. 
Apprentices should be able to work in more than one state.
    Portability. Registered apprentices currently in training 
need to have the ability to move from state to state and enter 
into another state's registered apprenticeship program at the 
same level they had attained in a prior state without penalty.
    Competency based training. Employees who have previously 
acquired skill sets should not be required to begin the 
apprenticeship program from the beginning.
    Distance learning. In order to achieve apprenticeship 
reform, the Department of Labor must increase their usage of 
technology and the Internet. There is a great need for 
flexibility and variable options and training methods.
    Thank you for this opportunity to be here today. I welcome 
any questions that the committee may have.
    [Mr. Bonk's statement may be found in appendix.]
    Chairman Pence. Thank you, Mr. Bonk, for your presentation.
    With that, we will take a brief recess while the members 
discharge their duty across the street and then we will return 
for Mr. Herzog's and Mr. Krul's presentations and then the 
following questions.
    Thank you.
    [Recess.]
    Chairman Pence. I would like to thank everyone for their 
patience. I am informed that the ranking member will be joining 
us momentarily, as other members are also returning from the 
House floor.
    I want to welcome you back to this hearing of the 
Subcommittee on Regulatory Reform and Oversight entitled 
Removing Red Tape from the Department of Labor's Apprenticeship 
Approval Process, where we are focusing specifically on H.R. 
1950, the Apprenticeship Enhancement Act of 2001.
    As I mentioned before, we will complete with our testimony 
and then move to any questions or dialogue thereafter and we 
should be able to complete our work here before it is time to 
break for lunch.
    Our next witness is John Herzog, who is the Staff Vice 
President for Public Policy for Air Conditioning Contractors of 
America. John has nearly 15 years of government experience, 
including elective and appointed positions at the local, state 
and federal levels of government. In addition, he ran his own 
advertising and public relations business in Colorado for 
approximately 20 years. Prior to joining ACCA, he was vice 
president of a Washington, D.C. based public affairs firm where 
he represented the interests of small business and rural 
associates on Capitol Hill.
    In addition to his undergraduate degree from the University 
of Colorado, he holds an M.S. injournalism from UCLA and has 
taught journalism, marketing, consumer behavior, business 
communications and technical writing at the college level. He is, among 
other things, listed in the Who's Who in Politics in America.
    And with that, I recognize Mr. John Herzog gratefully for 
five minutes.

   STATEMENT OF JOHN HERZOG, STAFF VICE PRESIDENT FOR PUBLIC 
 POLICY, AIR CONDITIONING CONTRACTORS OF AMERICA, ARLINGTON, VA

    Mr. Herzog. Thank you, Mr. Pence and Representative Brady. 
We appreciate the opportunity to enter in to the national 
dialogue on improving the recruitment and training of America's 
skilled workforces.
    Originally, as you know, Dick Stilwilll, chapter manager 
for the Oregon-Washington chapter of ACCA was scheduled to 
testify. The events of September 11th changed that. 
Consequently, he asked me to deliver his message and I have 
also spoken with several other of our chapter executives who 
operate apprenticeship programs, so I think you will find the 
information of help.
    As you know, ACCA is the nation's largest trade association 
of those who design, install and maintain heating, ventilating, 
commercial, residential, refrigeration and air conditioning 
systems, known as HVACR.
    We are a federation of 60 state and local affiliated 
organizations representing approximately 9000 contractor 
companies nationwide. Approximately 20 percent of our 
membership is union affiliated.
    Prior to September 11th, the number one concern of our 
members, union and non-union, was addressing the labor shortage 
in the industry. It is not an issue of union versus non-union, 
but one of simply putting enough qualified people on the 
streets to meet the needs of our community.
    Discounting the fallout on the economy from the terrorist 
attacks, the Bureau of Labor Statistics had projected that the 
HVACR contracting industry will face a labor shorting of 
104,000 by the year 2004. The entire industry employees 600,000 
to 800,000 people, so you can see this represents a significant 
shortfall.
    Part of the solution lies in the way we train technicians. 
To begin, we support the Apprenticeship Enhancement Act for it 
addresses part of the problem. However, our experience 
highlights other barriers to training that deserve your 
attention.
    ACCA became involved in apprenticeship training about 20 
years ago through our chapters. Today, I would like to focus on 
specific problems that Dick had encountered in Oregon. Our 
Oregon chapter is often allied with another local trade 
association. Dick said they planned to start a SAC-approved 
apprenticeship program but became discouraged by what the other 
group experienced.
    Oregon has adopted a random selection pool process. This 
means a contractor interested in hiring someone to put through 
an apprenticeship program can only select the person at the top 
of the list. They hire sight unseen.
    Dick said that prior to 1999, Oregon operated on a method D 
selection process approved by BAT. This is the traditional 
hiring process. However, the addition of affirmative action 
stipulations, which is already addressed by BAT, changed the 
Oregon process. It created today's random selection pool 
process that has failed to meet the needs of the contractors or 
the students.
    This presents an especially sticky problem for company 
owners who cannot even place their children in a program with 
their own company unless the timing is absolutely perfect.
    The Oregon SAC requires applicants to have a high school 
diploma or equivalent with the additional requirement for HVAC 
only that they have a C in algebra.
    SAC is being driven because it is the only way one can work 
on public projects in Oregon, Washington, and California and 
meet the prevailing wage requirement for apprentices. This 
assumes you want to use apprentices and very few businesses, 
regardless of size, can afford to work with only journeyman on 
a job.
    I see that my time is running out. I have experience on 
Florida and Maryland. During questioning, if you would like to 
hear about those states, I will be happy to share that with 
you.
    Thank you.
    [Mr. Herzog's statement may be found in appendix.]
    Chairman Pence. Thank you, Mr. Herzog, and thank you 
especially for coming in and filling in at late notice. We 
appreciate your remarks and hope as you are comfortable to have 
some additional dialogue about some of the remarks that were 
capably presented.
    Our final witness today is Robert J. Krul. Mr. Krul is the 
National Apprenticeship Coordinator for the United Union of 
Roofers, Waterproofers and Allied Workers and has held that 
position since 1979. He is a 29-year member of Roofers Local 74 
in Buffalo, New York, a graduate of their apprenticeship 
program and is proud to say he was voted the outstanding 
apprentice of his class. He was an instructor and coordinator 
in his local union as well as a journeyman roofer and 
waterproofer, serving in a foreman and estimator capacity for 
several western New York roofing companies. He has served on 
the Federal Committee on Apprenticeship, is currently a member 
of the Building and Construction Trades Department 
Apprenticeship Committee, is chairman of the Secretary of 
Labor's Advisory Committee on Construction, Safety and Health, 
and is also chairman of the Building and Construction Trades 
Department Safety and Health Committee.
    So it is with deep appreciation that we recognize Mr. 
Robert Krul for five minutes.

     STATEMENT OF ROBERT J. KRUL, NATIONAL APPRENTICESHIP 
COORDINATOR, UNITED UNION OF ROOFERS, WATERPROOFERS AND ALLIED 
  WORKERS, WASHINGTON, DC, FOR THE BUILDING AND CONSTRUCTION 
                         TRADES AFL-CIO

    Mr. Krul. Thank you, Mr. Chairman, for that kind 
introduction and I would like to thank the members of the 
subcommittee for this opportunity to address an issue that the 
14 affiliated unions of the Building and Construction Trades 
Department feel is of utmost importance and those of us who are 
products of this apprenticeship training system feel compelled 
to address.
    H.R. 1950, the Apprenticeship Enhancement Act, purports to 
streamline the process of registering apprenticeship training 
programs and increase the numbers of programs in this country. 
In this period of extreme shortages of skilled workers in all 
industries in this nation, and most particularly in the 
construction industry, the purpose of the legislation at first 
glance seems to address a pressing need. But no matter how 
noble one thinks the purpose of the bill is, the unions of the 
Building Trades and the organized segment of the apprenticeship 
community have one salient point regarding its enactment: what 
will be the price to the current standards of apprenticeship 
training that have served this country well for at least 64 
years?
    Under the current system, the Department of Labor has 
issued national guidelines defining apprenticeship training 
criteria for numerous occupations and minimum standards 
governing apprenticeship training that all those making 
applications office review an apprenticeship program must abide 
by. These standards include items like affirmative action 
goals, health and safety training, classroom hours, curricula, 
wage progression for apprentices, ratios, and otheraspects of 
the program that ensure the welfare of the apprenticeship is protected 
and, most importantly, that actual training will be conducted and the 
apprentices will learn a trade or a craft. The system as it exists was 
designed to make sure that everyone who submits an application for an 
apprenticeship program adheres to a given set of national standards for 
a particular industry or trade, protected the welfare of apprentices 
being trained and ensured that the apprentice completed his or her 
training by learning a craft or a trade.
    H.R. 1950 will undermine the Department of Labor's Office 
of Apprenticeship Training, Employer and Labor Services and the 
State Apprenticeship Councils. Under H.R. 1950, a contractor or 
entity wishing to receive approval for a training program that 
may not meet the standards established for their particular 
industry or trade can play a waiting game and file continual 
appeals in order to receive an apprenticeship training program 
approval from the Secretary of Labor's office without being 
held to the OATELS's or SACs' high standards.
    Those established sets of standards have served the 
apprenticeship community for over six decades. Are we ready to 
say in this time of critical shortage of skilled workers in the 
construction and other industries that we are ready to lower 
the bar? Are we ready to say that construction workers need not 
be completely skilled in what they do, that they only need 
partial training or task training in order to work in this 
industry?
    If the answer to those questions in anyone's mind is yes, 
then I hold out to you that the workers who eventually rebuild 
our World Trade Center and the Pentagon need not be of top 
quality or possess utmost skills. If mediocrity in the form of 
so-so work that leads to future problems in building and 
construction is our goal, then let us lower the bar of 
excellence.
    I have never understood why it is that many in this country 
look down at construction work as just another occupation that 
requires no marketable skills or standards by which to judge 
those skills. Just think of the standards and skills that must 
be measured in a host of occupations and vocations in our 
everyday life. Lawyers must pass a bar exam in order to 
practice law. Accountants must pass a standard certification to 
receive their CPA license. And pilots must conform to a set of 
established standards in their training before being allowed to 
fly. And for the general public, all of us must pass tests and 
demonstrate proficiencies before being issued a driver's 
license.
    For each of these examples, there are always individuals 
who do not pass muster with the tests administered or the 
standards established in a particular industry, craft or 
profession. Is the answer to accommodate them by changing or 
weakening the standards or tests? Of course not.
    The same should be true of apprenticeship standards. Yes, 
the standards are tough, but they are tough for the same 
reasons that any industry standards are tough: to ensure that 
men and women who enroll in these apprenticeship and training 
programs will be properly trained to safely and competently 
perform their work. Instead of lowering the bar, we should be 
committed to making sure that the standards of apprenticeship 
that have served us so well over the last six decades are never 
weakened and, in fact, they should be strengthened and 
protected.
    I understand the frustration of those who come before you 
today and relate that they have experienced difficulty in 
registering what they feel is a bona fide apprenticeship 
training program that meets the required standards. I am not 
here to attempt to convince you that this system is never in 
need of repair or adjustment. But I would hope that conjecture, 
anecdotes and what seems to be a few minor administrative 
infractions will not be the catalyst for amending the National 
Apprenticeship Act of 1937.
    The committee should look to the Federal Committee on 
Registered Apprenticeship for guidance on how to address the 
issues raised by H.R. 1950 and its proponents. In fact, the 
FCRA has been working for the past two years on the very area 
of concern addressed by H.R. 1950.
    I see my time is up and I just would like to sum up by 
saying that I and my colleagues in the Building Trades from 
both labor and management urge the subcommittee to look to 
those experts in the apprenticeship community for any remedies 
that will be done so that the original purpose and intent of 
the Fitzgerald Act to safeguard the welfare of apprentices is 
the primary concern that we look at.
    Thank you very much for this opportunity to testify.
    [Mr. Krul's statement may be found in appendix.]
    Chairman Pence. Thank you, Mr. Krul, and thank you to all 
of our witnesses today.
    The chair will entertain a few questions to our witnesses 
and then we will recognize our ranking member, the gentleman 
from Pennsylvania and the gentleman from Illinois for any 
questions or comments that they might have.
    Beginning with Mr. Dunham, I am intrigued by the fact that 
you have been involved in union and non-union apprenticeship 
programs, which seems in some part of this to be a fault line 
of this debate, and you have been involved in programs that 
have been approved under the National Apprenticeship Act. Do 
you believe that union and non-union registered apprenticeship 
programs result in graduating skilled craftsmen as a general 
rule?
    Mr. Dunham. Yes, I do. In our case, the standards that we 
are using for the open shop programs are models, the mirrors, 
of the union programs under the requirement that the programs 
have to parallel each other. So the standards that we use and 
the education processes throughout it are the same and we have 
had no major objection with that.
    I think there should probably be some standardization. 
Carpenters are carpenters, operators are operators. The work 
processes are much the same.
    The difficulty we have is just simply getting the program 
considered by the State Apprenticeship Council in the first 
place and that is what we think the whole issue is with H.R. 
1950.
    Chairman Pence. One follow-up question, Mr. Dunham.
    You referred in your remarks to past efforts to update the 
apprenticeship system with new ideas. I know Mr. Bonk laid out 
a few ideas and Mr. Krul also referred to the debate over how 
we improve the system. I wondered if you might elaborate 
briefly on how outside of H.R. 1950 we might consider improving 
the system that would raise the level and the quality of our 
apprenticeship workforce?
    Mr. Dunham. Mr. Chairman, the issues Mr. Bonk raised are 
certainly valid ones, perhaps maybe slightly apart from what 
the intent of this bill is, to simply get access to the 
program. We certainly agree with the issues of reciprocity, the 
issues of training, some of the others. We listed those in our 
written comments.
    But the major problem is simply gaining access to the 
process of registering a program in the first place. We do not 
say the system needs to be broken, it just needs to be utilized 
better.
    Chairman Pence. And to Mr. Bonk, I appreciate both you and 
Mr. Krul's hands-on experience, I am someone who believes that 
the ability to perform a trade which is far beyond my talent 
base is an awesome ability to observe and will probably be much 
in evidence at those tragic sites in Manhattan and here in 
Washington.
    With that piece of admiration expressed to both of you, let 
me ask you about how would you characterize the extent of this 
problem?
    We have heard a wide range of views among the testimony 
today, some saying this is a very acute problem with regard to 
the approval process. I know that some thought that non-union 
contractors in Delaware have chosen not even to apply for 
approval of apprenticeship programs.
    How would you characterize the depth of this problem? Are 
these isolated instances or is this a pattern, both in your 
home jurisdiction and around the country?
    Mr. Bonk. Having served on the national board of ABC, I was 
in frequent meetings with contractors all over the United 
States and it is a country-wide problem, that all ABC 
contractors are looking for is a chance to get out of the 
batter's box up to the plate. If they strike out, they strike 
out. If they get a hit, they get a hit, but we cannot even get 
to the batter's box right now.
    No one is trying to put the standards aside or minimize the 
standards. All we want is a chance to stand at the plate.
    In Delaware, we have a State Apprenticeship Council. It is 
comprised of members of the Department of Labor, members of the 
business community and members of organized labor. However, 
some of the members of the business community are also owners 
of organized labor contracting companies, so nothing ever gets 
through the State Apprenticeship Council in Delaware. So the 
curriculum is poor--and it is not to demean the people in the 
Department of Labor, they are well intentioned, good, hard 
working people--the curriculum is outdated, the teaching 
methods are outdated. We are using systems that were brought 
about 50 years ago. We are ignoring CD-ROMs, the Internet. We 
are ignoring the ability to bring someone in and test them.
    If you have someone that has been in the trade for 20 
years, why not test them? Why subject that person to a first 
year apprenticeship program? He is not going to want to do 
that. Or she is not going to want to do it. Why not recognize 
their skill in that field?
    We do it at the college and university level, we let people 
test out of a class there. Why not do it in the apprenticeship 
program? But we are always at loggerheads because of these 
State Apprenticeship Councils.
    Once again, it is not meant to reduce the standards, just 
give us a shot at the plate.
    Chairman Pence. Mr. Herzog, it is my understanding that 
State Apprenticeship Councils are supposed to follow federal 
regulations. Now, I also understand that federal regulations do 
not permit the establishment of new apprenticeship programs 
even though an apprenticeship program of that nature and in 
that craft currently exist in the state. Is that something that 
we ought to address specifically in terms of--should we make 
federal regulations explicit that an SAC cannot prohibit the 
establishment of a new program simply because there is already 
a program in that craft?
    Mr. Herzog. Definitely. And this is one of the problems 
that they faced in Oregon. They also had that same pattern in 
Florida. And this is local requirements. All the state SACs 
have to do is meet minimum federal standards, which is very 
true for a lot of federal programs given to the states. The 
states can then build upon these as long as they are meeting 
the federal standards.
    But if you are in a situation--and, actually, there is a 
lawsuit in California where they had approved a program for 
Sacramento, and they wanted to have satellite programs for the 
rest of the state. California is rather a large state so they 
tried it, but the union came in and sued them and now there is 
a possibility they are going to lose everything because it is 
such a mess.
    In Washington State, there is another example. The 9th 
District Court ruled that the state had to provide parallel 
non-union programs. In effect, the SAC is undergirding that 
decision by creating new regulations that make it extremely 
difficult for the non-union programs to get started.
    So if you want to have enough workers, if that is the goal, 
you have to make these programs available so that they are 
fairly convenient, so apprentices do not have to travel 200 
miles to get to a program, and they have to be cost effective 
so apprentices and employers can afford it.
    Chairman Pence. And, Mr. Krul, you said, I think, that the 
number one point has to do with maintaining the current 
standards among these apprenticeship programs. And I ask this 
very sincerely, as someone who obviously has forgotten more 
today about these programs than I have yet learned, how 
specifically in your mind does H.R. 1950 erode the standards 
that currently exist in the law, at least the last 20 years?
    How are the standards that you described eroded in any way 
by simply creating a time table for a yes or no decision?
    Mr. Krul. Well, Congressman, it is a fair question and, as 
I said in my remarks, we are not here to tell you that the 
system is not in need of repair or adjustment. We would much 
rather see the Federal Committee on Registered Apprenticeship 
make suggestions.
    To answer your immediate question, I would repeat what 
Congressman Brady had said. The way this bill is structured, it 
builds in an appeals process that seems to be an endless 
process that would allow a contractor or an entity to merely 
stand in line and wait for the time limitations to run out.
    A State Apprenticeship Council with all the stories we are 
hearing from the folks that are testifying at the table and 
Congressman Wicker, the states have the right to state if 
deficiencies exist in standards that are being put forward.
    Now, there seems to be a time table debate, that it takes 
too long. And if there have been years, then obviously 
something is wrong and it needs to be fixed, if it takes years 
to get an apprenticeship program looked at, or there should be 
at least an oversight by some other entity. And we think that 
back in 1990, the Bureau of Apprenticeship and Training 
proposed rules to address this in program registration, denials 
and deregistration, that it would come back through the 
Department of Labor.
    But understanding the way these State Apprenticeship 
Councils work, that they meet quarterly, there should not be 
any big reason for people to get upset that it is 90 days in 
between the review of the program. If that program was reviewed 
and denied because it did not meet standards existing for a 
particular industry, then those standards need to be brought 
up.
    I mean, there are non-union programs being--I hate to bring 
that debate up, but there are non-union programs being 
registered, apprenticeship programs being registered, in this 
country. It is not like it is--in fact, what I am looking at 
from those who submitted testimony, the non-union programs are 
registered in far greater numbers than union programs are. But 
the inverse relationship that exists is that the preponderance 
of registered apprentices who graduate from the programs come 
from that minority union sector.
    So we are looking at--if that many registered programs are 
in the non-union sector, could it be that the states are 
exercising states' rights in saying that we will not let a 
program come into our particular borders that is less than what 
is established for an industry or trade?
    If there are some egregious--and I am sure that we have 
zealots, some of them my union brothers and sisters, I am 
sure--then there ought to be oversight capabilities. But I do 
not think amending the National Apprenticeship Act is the way 
that the apprenticeship system ought to be looked at to have 
those adjustments made and repairs made to it.
    I think those who have equity in this system, both in the 
organized and unorganized sectors, sit on the Federal Committee 
on Registered Apprenticeship, there are folks there from the 
private and the public sector, and I think those experts would 
better be able to tell this body if legislation is needed or if 
it could be done through Part 29 of Title 29 of the Code of 
Federal Regulations, which currently exists for the regulation 
of apprenticeship programs.
    Chairman Pence. Thank you.
    Mr. Brady?
    Mr. Brady. Thank you, Mr. Chairman, and thank all of you 
for testifying today. We appreciate you being here.
    My question would be for Mr. Bonk.
    Your program has apprentices pay a fee of $700 to $1000 to 
participate in that program. Is that correct? And how do they 
pay that?
    Mr. Bonk. I am not aware of any apprentice paying for their 
education.
    Mr. Brady. I understand that to join the apprenticeship 
program that there is a fee for that.
    Mr. Bonk. That is not true.
    Mr. Brady. Not at all?
    Mr. Bonk. I am not aware of any ABC chapter or member that 
charges for their apprentices. They are usually borne by the 
company. I have registered apprentices in the State of Maryland 
that I pay the ABC chapter there for their training.
    Mr. Brady. You pay for the apprentices' training?
    Mr. Bonk. Yes.
    Mr. Brady. What happens in the second year through lack of 
work, an apprentice put two years in and he now longer has no 
work? Do they get laid off and they just go about the wayside? 
Do you keep track of them? I mean, do you try to bring them 
back a year later when there is work? Are they a member or what 
happens?
    Mr. Bonk. I do not recall the last person that I laid off. 
It must have been at least ten years ago, Congressman.
    Mr. Brady. That is good when we are booming, but right now 
we are not booming. And if we stop booming, what would happen? 
I mean, somebody had to get laid off somewhere, a single 
employer had to lay people off. What happens to those 
apprentices?
    Mr. Bonk. Well, part of the problem is the lack of 
portability. In construction, you have some training in a vo 
tech arena, different levels of training once you get out, and 
there is no portability with the thing, so that someone after 
two years may get lost in the backwash.
    What is happening now with the National Center for 
Construction Education and Research, as you take these 
programs, you actually acquire a transcript so that whether you 
are in Wilmington, Delaware or Spokane, Washington, you can 
take this transcript and once again catch up on your education.
    Mr. Brady. But to catch up on your education, you have to 
have a job with somebody, correct?
    Mr. Bonk. With the great demand for construction workers in 
this country, I do not see any construction workers looking for 
a job.
    Mr. Brady. Well, the point I am making is when there are, 
and we are in a boom right now, there is no question about it, 
but there are times when we do have a lack of work. And the 
difference between the programs that I see, because I have been 
involved in them and I have had a lack of work, is that in a 
union program they keep you. They keep you and they keep you 
for as long as you keep your card up and they will find work 
for you. And we have a mandate on so many employees, so many 
journeymen, they must have apprentices. And I am wondering 
whether you have that same thing.
    Mr. Bonk. I do not feel there is any difference in the open 
shop sector. January, February, March were very difficult 
months for my company. I came out of pocket to get work for my 
people. Once again, I have not laid someone off in ten years.
    Mr. Brady. Yes, but that is you. There are other people out 
there that do lay people off.
    Mr. Bonk. Well, I do not know that my story is that 
different than the rest of the industry.
    Mr. Brady. Well, I do. I mean, that is absolutely true, 
there are people that lay people off. I know people that have 
gotten laid off. I was just wanting to know what happens to 
these apprentices that put two years or three years in on a 
four-year program. I mean, in a union position, they have a 
union card that they maintain their dues which are minimal and 
they even make them lower when they are not working, when they 
are out of work, and they stay for life. I mean, you could come 
back 10, 15 years and go back into the trade. And I was just 
trying to find the distinction.
    Mr. Bonk. I have hired people that have completed one year, 
two years, three years at other companies and they have 
completed their apprenticeship programs within my company.
    Mr. Brady. Okay.
    Mr. Krul, how do you see this bill addressing the problems 
in the current shortage of the skilled workers?
    Mr. Krul. I hate to keep falling back on my standards 
crutch. I do not see this bill addressing skills. It will 
address skills shortage, it will address shortages in the 
construction industry. Will it address skilled worker 
shortages? I have my doubts. I have my doubts.
    I am listening to the laments of the folks here at the 
table and issues that we disagree on. Portability and 
reciprocity, I do not think those are the kinds of things 
personally that the apprenticeship system ought to entertain. 
However, I would defer to experts in the field.
    And I do think, I would like to repeat, that the question 
that you just asked me would be best answered by those folks 
sitting on the Federal Committee on Registered Apprenticeship 
who have dealt with these issues before and, in fact, are 
dealing with this very issue that H.R. 1950 addresses right now 
and would like to address the issue of the critical skill 
shortages.
    There are no silver bullets, no magic solutions to the 
skilled worker shortages in this country. But I do not believe 
H.R. 1950 addresses that, sir.
    Mr. Brady. How will the overall quality of apprenticeship 
programs be affected under H.R. 1950 if it is enacted?
    Mr. Krul. If it is enacted, the quality of those people, if 
substandard programs, programs that undermine the standards 
that are currently existing for an apprenticeship program are 
allowed to go into place, for instance, if wage progressions 
are not equal, if wages and fringe benefit levels are not 
equal, there is a huge bidding advantage for a contractor in 
the construction industry who would register a program, pay his 
people lesser monies than someone in the organized sector would 
be doing, and to come in and underbid fair contractors in a 
union setting.
    Mr. Brady. Thank you.
    And thank you, Mr. Chairman.
    Again, I thank all of you.
    Chairman Pence. The chair recognizes Mr. Phelps of Illinois 
for any questions or comments of our panel.
    Mr. Phelps. Thank you, Mr. Chairman. I want to thank you 
for calling this hearing and examining a very important piece 
of legislation and the panel members for testifying. Very 
enlightening.
    What protection, Mr. Bonk, do you think an apprentice 
worker would have under an employer-sponsored apprenticeship 
program if after two years they fire them, an employee, to hire 
another apprentice to keep the costs down, so people maybe are 
not being laid off, but have you hired people fired?
    Mr. Bonk. We have fired people, not--you know, there has to 
be a reason to fire someone or it will not stand up in court. 
We do not just arbitrarily go out and fire someone.
    Mr. Phelps. No, I am not indicating that. But those that--I 
guess if the concerns of labor are not addressed, one of the 
things that they evidently are concerned about would be the 
competition of what eventually comes to wages, which has all 
kinds of ramifications, what Mr. Krul says, from the 
competition of bids, how much skill there is involved in those 
because of lower costs versus those that had to pay more to get 
more skilled. Do we have an even playing field with everything 
that is proposed in H.R. 1950?
    Mr. Bonk. No, I do not believe we have an even playing 
field. I think you will find more situations where journeymen 
are less likely to find work in the organized labor section, in 
a closed shop, than in an open shop sector, because in order to 
get a good average wage on a job, you are going to find union 
contractors want a lot of apprentices to get the average wage 
down. However, once they reach journeyman status, I think 
statistically it has been proven that they are going to sit in 
the hall. There is not as much demand for the journeymen as 
there is for the apprentice because of the reduced wage.
    That is not the situation in the open shop arena. If I am 
going to spend all this time and effort on a person, I want to 
retain them. I think there is more of an affinity towards the 
company in the open shop arena. There is an allegiance there. I 
take care of my people. And I think you will find they are more 
likely to stay with me. I do not send them back to the hall, I 
give them the opportunity to work within other trades.
    The construction industry does not work in a vacuum. If I 
start doing shoddy work, I am not going to be out there. If my 
employees perform poorly, people are not going to utilize me. 
Architects look at our work. Engineers look at our work. 
License and inspections people look at our work. I cannot do 
shoddy work. So the idea that we can put in a poor 
apprenticeship program and do shoddy work to keep the costs 
down, I am not going to survive in a free market system.
    Mr. Phelps. Mr. Herzog or Krul, would you respond to that 
as far as the effect on the journeyman, the point he made? Do 
you have an opinion on that?
    Mr. Herzog. Fortunately, we do not have that problem. Our 
members cannot find enough workers to do the work that they 
have. And this situation has been going on for many years.
    Mr. Phelps. Why is that, you think?
    Mr. Herzog. Because there is a shortage of people that want 
to get into these quote blue collar trades because it is not 
very sexy. Students can get work in the computer industry. We 
have talked with the BAT people here, they have been very 
helpful and understand this situation. You cannot attract the 
kids into these programs. The high school counselors are 
sending them elsewhere. Our people are actually going down to 
the junior high level trying to convince students that this is 
a possible trade one can get into if you are not college bound.
    Mr. Phelps. So we have this factor with the 25-to-40-year 
olds' decreasing interest in the industry.
    Mr. Herzog. Getting them at 18, getting high school 
graduates to go into this industry. We would love to have a lot 
more people.
    Mr. Phelps. So is that--maybe you would say let the market 
work without too much intervention or influence from the 
government? Does that not mean, then, that that would have an 
effect on wages, trying to recruit in shortage areas?
    Mr. Herzog. Yes. Obviously, what wages one pays determines 
how competitive you are in competing against others, whether 
union or non-union. You can only afford to pay a certain amount 
of money. The market determines what the rates are, except 
prevailing wages where everybody pays the same.
    Mr. Phelps. Mr. Krul, did you have a response?
    Mr. Krul. I do not mean to get into colloquy here, but I 
could not think of a quicker way for a union contractor to go 
into Chapter 7 or 11 bankruptcy than to put all apprentices out 
on a job and not use his most skilled manpower in the form of 
his journeyman and top estimators.
    The fact is that all contractors in the organized sector, 
and I can only speak for the organized sector, that is where my 
experience is, they understand under the collective bargaining 
process that they are required to hire apprentices in the ratio 
that the standards of the program are registered under. There 
would certainly be no contractor who would ever consider going 
beyond those ratios in some quote-unquote cost saving measure 
because the apprentices are being paid a portion of the 
journeyman's rate. The skill level is not there for an 
apprentice. He or she is still learning. And when you are on a 
big outage on a power plant or if you are going through a 
decommissioning a nuclear plant, you are not going to put 
apprentices in there. You are going to have your top people 
doing that.
    Mr. Phelps. Mr. Dunham, do you have a response?
    Mr. Dunham. Many of the public work contracts in the State 
of Washington now have a requirement in them for a certain 
percentage of apprentices and whether it is open shop or union 
contractors bidding on that, that is how many apprentices will 
be on the job. So it is really not that much of an issue.
    The issue, too, for the contractor is, whether they are 
union or open shop, is that they want to do a quality job and 
be able to stay in business and continue to do work in the 
future and they are not going to put unskilled, untrained 
people on the job that would affect their ability to do that.
    The standards in our situation, standards that the 
apprentices adhere to, are virtually the same for both the 
union and open shop segment. Our issue is just one of simply 
getting the open shop programs registered in the first place.
    Mr. Phelps. One last question for any of you to respond or 
all of you.
    One of the main reasons expressed for the need for this 
bill is to streamline the application process. How do time 
limits on the application approval streamline the process in 
your opinions?
    Mr. Bonk. I think no matter what industry you are in, if 
you have a time limit you are more apt to perform. I always 
laugh at contractors at bid meetings, the first question is can 
we get an extension on the time to bid. And it does not matter 
how much time you have, you are going to do it at the end, so 
if there is some pressure at some point in time to get this 
done, it will get done. If there is no pressure to come up with 
an answer, whether it be positive or negative, it is just human 
nature to let it slide.
    Mr. Phelps. Okay. So the time table provides pressure, in 
your opinion, to move it right along.
    Mr. Bonk. In my opinion, yes.
    Mr. Krul. Congressman, I would just repeat what I said 
before. It is my understanding, and I would stand to be 
corrected, that most State Apprenticeship Councils, those 
members, serve in a voluntary capacity and meet quarterly, so 
any time limit, for instance, the 90 days proposed in this 
bill, would put pressure on. If the review happens 90 days--an 
apprenticeship program is submitted and it is found to be 
deficient and that State Apprenticeship Council will not meet 
again for 90 days, I do not know how this bill's time table and 
the time table of the State Apprenticeship Council--who is 
going to authorize or enforce that they meet sooner in order to 
accommodate that time table?
    Mr. Phelps. Mr. Bonk, what do you say to that?
    Mr. Bonk. I do not feel the 90 days is an issue. I think 20 
years is an issue.
    Mr. Krul. I would agree.
    Mr. Phelps. Twenty years? I missed something.
    Mr. Bonk. The ABC Washington chapter waited 20 years for an 
answer.
    Mr. Phelps. Oh, I am sorry.
    Mr. Bonk. I feel that if we are being given due process, if 
someone is legitimately looking at the thing, that is fine. The 
30 days, 90 days, six months, I think it is all irrelevant. I 
do not feel they are being given an honest----
    Mr. Phelps. Except the pressure time table, you said. That 
is relevant.
    Mr. Bonk. The 90 days is relevant. I do not know that these 
apprentice councils only meet quarterly. I do not think that is 
the issue. The real issue is get someone to look at it. Let us 
get out of the batter's box up to the plate. If we strike out, 
we strike out.
    Mr. Herzog. We have a perfect example for you. In Florida, 
our chapter executive applied for a program. She was on the 
SAC, she knew the people, she made her application. After four 
to six months not hearing anything, she called the chairman of 
the SAC and raised Cain. She asked what is going on, why have I 
not heard? And immediately thereafter, the program was 
approved.
    If she did not know anybody there, if she was just out 
there like everyone else, she would still be waiting. And if 
you have a problem on the time limit, determine it based on 
when you start the clock. If a SAC does not meet less than 
quarterly, and start the clock at that first quarterly meeting. 
But you have to make it known to everybody applying for the 
program when that clock is going to start.
    So, if I am applying for a program and the SAC met, say, 
two weeks ago and then I apply, I will know ahead of time that 
there is not going to be any action at least for two and a half 
months because they are not meeting.
    The other problem they have in Florida is they cut their 
budget to $1.3 million to oversee 347 programs. They lost their 
specialist and now they put the program under the unemployment 
department. So that is another problem, the funding of these 
programs is probably why there is the slowdown in response.
    Mr. Phelps. So do you think these people are properly 
communicated with, with the quarter timing, to understand where 
they are?
    Mr. Herzog. It is a certainty. Yes. You have to know what 
the game plan is. You have to know when to expect a response so 
that you are not sitting on the phone and telling people who 
have signed up to become apprentices, yes, maybe they will hear 
something next week, when it could be months before you know 
anything.
    Mr. Dunham. Mr. Congressman, in the State of Washington, 
the staff of the SAC obviously goes to work every day and works 
on that and has correspondence and discussion with the council 
members on a very regular basis. The quarterly meetings that 
are conducted by the SAC in some instances are formal occasions 
to enroll for the public record actions taken by that group, 
but they obviously do not work in a vacuum, the work is done 
constantly, and that is why I think the 90 days is probably a 
reasonable way to say that you should take some positive action 
toward us.
    Any of us who have a program, if we found some deficiency 
in our standards, which we rarely would because they model the 
union programs that have been in existence for years, we could 
take care of that and the issue of 90 days would not be a major 
issue.
    Mr. Phelps. So if I hear you all right, even though you 
might differ on the time table process, you think that it is 
necessary to have a time table.
    Mr. Dunham. That is correct.
    Mr. Phelps. And that whether it is 90 days, you think it is 
irrelevant, you all think it is working as it is?
    Mr. Krul. I would respectfully state, as I said in my 
testimony, that rather than do this legislatively, I would 
rather see this done through the CFR. And I would, if I could, 
leave with your staff a copy of that 1990 proposal that never 
went anywhere that did give the then Bureau of Apprenticeship 
and Training Director within 30 days the right to review a 
denial of a program.
    Mr. Phelps. Thank you. That would be very valuable.
    Anybody else have anything to add?
    Mr. Bonk. I think one of the most basic management premises 
is what gets measured gets done. Right now, there is no 
measurement. Put some kind of measurement in and it will get 
done.
    Mr. Herzog. I might add, too, that a lot of our chapters 
just went with the BAT process and they said that the 
difference is like night and day. It has been a pleasant 
experience, they have been very helpful.
    Mr. Phelps. The BAT process?
    Mr. Herzog. The BAT process. They understand----
    Mr. Phelps. So maybe that would be a model?
    Mr. Herzog. They do not have a time line. It is just that 
they are more efficient and maybe it is because they have more 
people. I do not know.
    Mr. Phelps. Thank you all very much.
    Mr. Chairman?
    Chairman Pence. Mr. Brady, did you have any other follow-up 
questions?
    Mr. Brady. Just an observation. The DOL does not keep 
statistics, I do not believe, on the amount of complaints. I 
think that we should probably look at that and maybe try to 
compile what amount of complaints there really are and how 
widespread it is before we consider legislation. I mean, we do 
not know that.
    And I do not know whether or not--I am not trying to be an 
obstructionist--I do not know whether or not we can even get 
that information, but I think in due diligence we should try to 
and find out if it is two complaints from this part of the 
state and maybe just three from here, maybe Mr. Bonk has a 
legitimate complaint from just his own area, but if we can just 
see where it is at instead of putting in broadbased legislation 
for the United States of America for apprentices, we should 
probably try in due diligence to get those statistics.
    Chairman Pence. I want to thank all of those who presented 
testimony today and especially thank my colleagues, the ranking 
member, Mr. Brady from Pennsylvania, and Mr. Phelps from 
Illinois for joining us.
    I especially want to thank the public spirited nature of 
all of your comments. This is an issue that affects today 
440,000 some odd families. It is our hope that we could proceed 
in a positive way so that we could have nearly a million people 
to meet the market need that seems inarguable in the coming 
years.
    I just would hope that we would go forward with the idea 
that whatever we do that one principle would come shining out 
and that would be that the law that is on the books is enforced 
and that if we need to make changes in that law or in the way 
that it is interpreted through regulation, it is my hope that 
our subcommittee would be a part of that discussion, but I 
remain a strong advocate of H.R. 1950 inasmuch as it simply 
calls for a streamlining and application of existing standards 
and I also would endorse the principle that performance 
measured is performance enhanced.
    One clarification, for the record, according to my 
understanding, the time clock for the 90 days begins after the 
initial SAC meeting and so it would accommodate the quarterly 
schedule that many states do employ in their meeting, thereby 
giving as much as a six-month initial window with another 30-
day extension on top of that in reality.
    That being said, again, thank you to our witnesses and to 
my colleagues. This hearing is adjourned.
    [Whereupon, at 11:55 a.m., the subcommittee was adjourned.]

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