Legislature(2001 - 2002)
04/26/2001 01:53 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 58
An Act relating to the calculation and payment of
unemployment compensation benefits; and providing for
an effective date.
REBECCA NANCE-GAMEZ, DEPUTY COMMISSIONER, DEPARTMENT OF
LABOR AND WORKFORCE DEVELOPMENT, stated that Alaska's
economy includes many seasonal industries with employees who
rely on their unemployment benefits to fill the gaps between
times of work. The current rate of unemployment insurance
payments falls short in helping families cover living
expenses. Alaska's unemployment insurance provides the
lowest percentage of the State's average weekly wage of any
state. Alaska's maximum weekly benefit amount of $248 ranks
th
To correct the inadequacy, HB 58 has been transmitted to
increase unemployment insurance benefits and then index the
benefits to the State's average weekly wage, so that future
adjustments would be automatic and synchronized to the
State's economy.
Ms. Nance-Gamez commented that under the bill, the maximum
weekly benefit amount would increase January 1, 2002, to
$284. Those earning $31,250 or more per year would be
eligible for the maximum benefit. A year later, the maximum
weekly benefit amount would be indexed to the average weekly
wage in the State for the preceding fiscal year, set at
fifty percent of that wage. Based on current projections,
the maximum weekly benefit amount in 2003 would be $320 for
those claimants who earned $35,500 or more. She urged
support for the legislation
BILL CRAMER, ACTING ASSISTANT DIRECTOR, UNEMPLOYMENT
INSURANCE DIVISION, DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT, responded to questions by Co-Chair Williams and
noted that the State of Alaska is last and that the
percentage of the average weekly wage is 32%; the next
lowest paying state is Illinois at a 38% replacement of the
average weekly wage. The average weekly cost of a living
wage increase was in 1996, moving from $212 to $248 dollars.
Representative Foster asked the employee and employer
percentage being paid. Ms. Nance-Gamez replied that in
Alaska, employers pay 80%. New Jersey is the other state
that has an employer's contribution.
PAM LABOLLE, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE,
JUNEAU, stated that the increase proposed would increase
unemployment compensation by 29% above the present level.
Alaska employers would pay the cost of the increase, which
would be $10 million dollars. The Alaska State Chamber of
Commerce believes that the increase would be exorbitant.
She noted that the State Chamber does oppose the
legislation.
Representative Hudson asked the first year cost to the
employer. Ms. LaBolle responded that if the increase were
$10 million dollars, the first year increase would be $3.5
million dollars.
DON ETHERIDGE, ALASKA STATE AFL-CIO, JUNEAU, voiced strong
support for the legislation. He noted that the proposed
legislation was the number one priority this year for the
Union.
KIM GARNERO, DIRECTOR, DIVISION OF FINANCE, DEPARTMENT OF
ADMINISTRATION, addressed the fiscal note. She stated that
the State of Alaska is a reimbursable employer for
employment insurance purposes. The State pays tax
contributions based on the employers experience rating and
the employees contribute. The State reimburses the fund for
actual payments made to former employees.
Representative Foster MOVED to ADOPT Amendment #1. [Copy on
File]. He asked Ms. LaBolle to speak to the amendment. Co-
Chair Williams OBJECTED for purposes of discussion.
Ms. LaBolle explained that the amendment would supports the
position of the State Chamber of Commerce that an increase
only occurs on the first level.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Mulder
OPPOSED: Bunde, Croft, Davies, Harris, Hudson,
Lancaster, Whitaker
Representative Moses was not present for the vote.
The MOTION FAILED (2-8).
Representative J. Davies MOVED to report CS HB 58 (L&C) out
of Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS HB 58 (L&C) was reported out of Committee with a "do
pass" recommendation and with fiscal note #1 by Department
of Labor and Workforce Development, #2 by Department of
Administration and #4 by the University of Alaska.
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