2020-01-27                     House Journal                      Page 1467
HB 215                                                                                                                        
HOUSE BILL NO. 215 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
                                                                                                                                
     "An Act relating to unemployment insurance contribution rates;                                                             
     and providing for an effective date."                                                                                      
                                                                                                                                
was read the first time and referred to the Labor & Commerce and                                                                
Finance Committees.                                                                                                             
                                                                                                                                
The following fiscal note(s) apply:                                                                                             
                                                                                                                                
1.  Fiscal, Dept. of Labor & Workforce Development                                                                              
                                                                                                                                
The Governor's transmittal letter dated January 21 follows:                                                                     
                                                                                                                                
                                                                                                                                

2020-01-27                     House Journal                      Page 1468
"Dear Speaker Edgmon:                                                                                                           
                                                                                                                                
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill relating to unemployment                                                                 
insurance employer contribution rates.                                                                                          
                                                                                                                                
In Alaska, the Unemployment Insurance Tax is one of the primary                                                                 
taxes that employers must pay. Alaska is the only state that currently                                                          
has a fixed minimum tax rate contribution of one percent. This                                                                  
minimum tax is assessed on businesses, irrespective of an employers'                                                            
experience factor.                                                                                                              
                                                                                                                                
Currently, AS 23.20.290(c) requires employers to make contributions                                                             
of not less than one percent in unemployment insurance taxes. This                                                              
bill lowers the minimum tax rate for employers in rate classes 1-9                                                              
from the existing one percent, to a rate correlated to the employer's                                                           
experience factor. Experience factors for classes 1-9 range from 0.4 to                                                         
0.9 percent.  These changes are intended to address the                                                                         
disproportionately high employer tax rate contributions for small                                                               
business employers.                                                                                                             
                                                                                                                                
This legislation reduces the tax burden on Alaska businesses and                                                                
employers, while preserving the health of the Alaska Unemployment                                                               
Trust Fund, ensuring that Alaska workers are able to access benefits                                                            
when necessary.                                                                                                                 
                                                                                                                                
I urge your prompt and favorable action on this measure.                                                                        
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Mike Dunleavy                                                                                                                   
Governor"