2000-02-16                     House Journal                      Page 2211
HB 378                                                                       
HOUSE BILL NO. 378 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
"An Act eliminating certain taxes under AS 21.09 on premiums                  
from the sale of workers' compensation insurance; relating to the              
establishment, assessment, collection, and accounting for service              
fees for state administration of workers' compensation and worker              
safety programs; establishing civil penalties and sanctions for late           
payment or nonpayment of the service fee; and providing for an                 
effective date."                                                               
                                                                               

2000-02-16                     House Journal                      Page 2212
HB 378                                                                       
was read the first time and referred to the Labor & Commerce,                  
Judiciary, and Finance Committees.                                             
                                                                               
The following fiscal notes apply:                                              
                                                                               
Fiscal note, Dept. of Administration, 2/16/00                                  
Fiscal note, Dept. of Community & Economic Development, 2/16/00                
Fiscal notes (2), Dept. of Labor & Workforce Development, 2/16/00              
                                                                               
The Governor's transmittal letter dated February 11, 2000, appears             
below:                                                                         
                                                                               
"Dear Speaker Porter:                                                          
                                                                               
The state's workers' compensation and worker safety programs in the            
Department of Labor and Workforce Development provide important                
benefits and services to employees and employers throughout Alaska.            
Successive budget cuts to the department have threatened the viability         
of these programs to the point that a takeover of the safety program by        
the federal government is a distinct possibility.                              
                                                                               
Federal management of our occupational health and safety program is            
unacceptable to me and to most employers and employees in Alaska.              
The bill I am introducing changes the way in which these programs are          
funded to ensure these services to Alaskans are put back on firm               
footing.                                                                       
                                                                               
These programs are currently paid for with general funds.  The costs           
roughly equate to the amount of money the state collects from the tax          
on workers' compensation insurance premiums.                                   
                                                                               
The programs clearly benefit all employers, but only those employers           
who purchase workers' compensation insurance are taxed.  Larger self-          
insured employers pay no tax.  This bill more equitably spreads the            
cost/benefit structure of worker safety programs by eliminating the            
premium tax and replacing it with a fee for all employers based on a           
percentage of their individual workers' compensation claims.                   
                                                                               
The fees would be accounted for separately and deposited into a                
worker safety and compensation account.  The money in the account              

2000-02-16                     House Journal                      Page 2213
HB 378                                                                       
would be treated as designated program receipts available for                  
appropriation to the workers' compensation and safety programs.  The           
bill provides for a four-year phase-in of the fees to minimize the             
impact on those self-insured employers who currently pay no tax.  The          
new fee system is designed to raise the same amount of money as the            
current tax.  Because the new system would spread costs among more             
employers, those employers currently paying the premium tax would              
realize a decrease in their payments.                                          
                                                                               
This bill offers a fair, effective way of ensuring continued funding for       
vital worker protection programs.  I urge your prompt and favorable            
action on this measure.                                                        
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"