Legislature(2017 - 2018)BARNES 124

03/06/2017 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 141 AK WORKFORCE INVESTMENT BOARD;FUNDS TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 79 OMNIBUS WORKERS' COMPENSATION TELECONFERENCED
Heard & Held
+ HB 132 TRANSPORTATION NETWORK COMPANIES TELECONFERENCED
Scheduled but Not Heard
<Pending Referral>
+ SB 14 TRANSPORTATION NETWORK COMPANIES TELECONFERENCED
<Bill Hearing Canceled>
<Pending Referral>
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 6, 2017                                                                                          
                           3:16 p.m.                                                                                            
                                                                                                                                
                             DRAFT                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 79                                                                                                               
"An Act  relating to workers' compensation;  repealing the second                                                               
injury  fund upon  satisfaction  of claims;  relating to  service                                                               
fees and  civil penalties  for the  workers' safety  programs and                                                               
the workers'  compensation program; relating to  the liability of                                                               
specified  officers and  members of  specified business  entities                                                               
for  payment   of  workers'   compensation  benefits   and  civil                                                               
penalties;  relating  to  civil penalties  for  underinsuring  or                                                               
failing to  insure or provide security  for workers' compensation                                                               
liability; relating  to preauthorization  and timely  payment for                                                               
medical  treatment and  services provided  to injured  employees;                                                               
relating  to incorporation  of  reference  materials in  workers'                                                               
compensation  regulations;  relating  to proceedings  before  the                                                               
Workers'  Compensation Board;  providing for  methods of  payment                                                               
for  workers' compensation  benefits;  relating  to the  workers'                                                               
compensation benefits  guaranty fund  authority to claim  a lien;                                                               
excluding  independent  contractors  from  workers'  compensation                                                               
coverage;  establishing  the  circumstances under  which  certain                                                               
nonemployee executive  corporate officers and members  of limited                                                               
liability  companies may  obtain workers'  compensation coverage;                                                               
relating to the  duties of injured employees to  report income or                                                               
work; relating  to misclassification  of employees  and deceptive                                                               
leasing;   defining   'employee';   relating  to   the   Workers'                                                               
Compensation Board's approval of attorney fees in a settlement                                                                  
agreement; and providing for an effective date."                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 141                                                                                                              
"An Act relating to allocations of funding for the Alaska                                                                       
Workforce Investment Board; and providing for an effective                                                                      
date."                                                                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 132                                                                                                              
"An Act relating to transportation network companies and                                                                        
transportation network company drivers."                                                                                        
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
SENATE BILL NO. 14                                                                                                              
"An Act relating to transportation network companies and                                                                        
transportation network company drivers."                                                                                        
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 79                                                                                                                   
SHORT TITLE: OMNIBUS WORKERS' COMPENSATION                                                                                      
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/25/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/25/17       (H)       L&C, JUD, FIN                                                                                          
02/20/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
02/20/17       (H)       Heard & Held                                                                                           
02/20/17       (H)       MINUTE(L&C)                                                                                            
03/01/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/01/17       (H)       <Bill Hearing Canceled>                                                                                
03/06/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 141                                                                                                                  
SHORT TITLE: AK WORKFORCE INVESTMENT BOARD;FUNDS                                                                                
SPONSOR(s): FANSLER                                                                                                             
                                                                                                                                
02/22/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/22/17       (H)       L&C, FIN                                                                                               
03/06/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE ZACH FANSLER                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As sponsor, presented HB 141.                                                                            
                                                                                                                                
PALOMA HARBOUR, Director                                                                                                        
Central Office                                                                                                                  
Division of Administrative Services                                                                                             
Department of Labor & Workforce Development (DLWD)                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding HB 141.                                                                     
                                                                                                                                
HEIDI DRYGAS, Commissioner                                                                                                      
Department of Labor & Workforce Development (DLWD)                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding HB 141.                                                                     
                                                                                                                                
FRED VILLA, Associate Vice President                                                                                            
Workforce Programs                                                                                                              
University of Alaska Fairbanks                                                                                                  
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
PEARL BROWER, Ph.D., President                                                                                                  
Ilisagvik College                                                                                                               
Barrow, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
DENNIS DISHION, Executive Director                                                                                              
Yuut Elitnaurviat                                                                                                               
Bethel, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
JOEL ALOWA, Community Health Services Director                                                                                  
Maniilaq Association                                                                                                            
Kotzebue, Alaska                                                                                                                
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
ANISHA ELBIE, Co-executive Director                                                                                             
Southwest Alaska Vocational Educational Center (SAVEC)                                                                          
King Salmon, Alaska                                                                                                             
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
ANNETTE CARUSO, Co-executive Director                                                                                           
Southwest Alaska Vocational Educational Center (SAVEC)                                                                          
King Salmon, Alaska                                                                                                             
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
D'ANNE HAMILTON, Personnel Officer                                                                                              
Teck Alaska                                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
CHERYL EDENSHAW, Director                                                                                                       
Alaska Technical Center (ATC)                                                                                                   
Kotzebue, Alaska                                                                                                                
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
KAREN CEDZO                                                                                                                     
Partners for Progress in Delta                                                                                                  
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
DEBBIE BANASZAK, Legislative Liaison                                                                                            
Office of the Commissioner                                                                                                      
Department of Labor & Workforce Development (DLWD)                                                                              
POSITION STATEMENT:  Presented the proposed changes in HB 79.                                                                 
                                                                                                                                
MARIE MARX, Director                                                                                                            
Division of Workers' Compensation                                                                                               
Department of Labor & Workforce Development (DLWD)                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding HB 79.                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:16:51 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
                                                                                                                                
Committee meeting  to order at  3:16 p.m.   Representatives Wool,                                                               
                                                                                                                                
Knopp,  Sullivan-Leonard,   Stutes,  Josephson,  and   Kito  were                                                               
                                                                                                                                
present at  the call to  order.  Representative Birch  arrived as                                                               
                                                                                                                                
the meeting was in progress.                                                                                                    
                                                                                                                                
                                                                                                                                
              HB 79-OMNIBUS WORKERS' COMPENSATION                                                                           
                                                                                                                                
                                                                                                                                
3:17:37 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
                                                                                                                                
HOUSE BILL  NO. 79,  "An Act  relating to  workers' compensation;                                                               
                                                                                                                                
repealing  the second  injury fund  upon satisfaction  of claims;                                                               
                                                                                                                                
relating to  service fees  and civil  penalties for  the workers'                                                               
                                                                                                                                
safety programs  and the workers' compensation  program; relating                                                               
                                                                                                                                
to the liability  of specified officers and  members of specified                                                               
                                                                                                                                
business entities  for payment of workers'  compensation benefits                                                               
                                                                                                                                
and   civil   penalties;   relating  to   civil   penalties   for                                                               
                                                                                                                                
underinsuring  or  failing  to insure  or  provide  security  for                                                               
                                                                                                                                
workers'  compensation  liability; relating  to  preauthorization                                                               
                                                                                                                                
and timely  payment for medical  treatment and  services provided                                                               
                                                                                                                                
to  injured employees;  relating  to  incorporation of  reference                                                               
                                                                                                                                
materials  in  workers'  compensation  regulations;  relating  to                                                               
                                                                                                                                
proceedings  before the  Workers'  Compensation Board;  providing                                                               
                                                                                                                                
for  methods  of  payment  for  workers'  compensation  benefits;                                                               
                                                                                                                                
relating  to the  workers'  compensation  benefits guaranty  fund                                                               
                                                                                                                                
authority  to claim  a  lien;  excluding independent  contractors                                                               
                                                                                                                                
from   workers'    compensation   coverage;    establishing   the                                                               
                                                                                                                                
circumstances   under   which   certain   nonemployee   executive                                                               
                                                                                                                                
corporate  officers and  members of  limited liability  companies                                                               
                                                                                                                                
may  obtain  workers'  compensation  coverage;  relating  to  the                                                               
                                                                                                                                
duties of  injured employees to  report income or  work; relating                                                               
                                                                                                                                
to   misclassification  of   employees  and   deceptive  leasing;                                                               
                                                                                                                                
defining  'employee';  relating   to  the  Workers'  Compensation                                                               
                                                                                                                                
Board's approval of attorney fees  in a settlement agreement; and                                                               
                                                                                                                                
providing for an effective date."                                                                                               
                                                                                                                                
                                                                                                                                
3:17:56 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO closed public testimony on HB 79.                                                                                    
                                                                                                                                
                                                                                                                                
[HB 79 was set aside and taken up again later in the meeting.]                                                                  
                                                                                                                                
                                                                                                                                
           HB 141-AK WORKFORCE INVESTMENT BOARD;FUNDS                                                                       
                                                                                                                                
                                                                                                                                
3:18:23 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
                                                                                                                                
HOUSE BILL  NO. 141, "An  Act relating to allocations  of funding                                                               
                                                                                                                                
for the Alaska  Workforce Investment Board; and  providing for an                                                               
                                                                                                                                
effective date."                                                                                                                
                                                                                                                                
                                                                                                                                
3:18:43 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE ZACH FANSLER, Alaska State Legislature, as                                                                       
                                                                                                                                
sponsor, presented HB 141.  He read from the sponsor statement,                                                                 
                                                                                                                                
which read as follows [original punctuation provided]:                                                                          
                                                                                                                                
                                                                                                                                
     AS   23.15.820   authorizes    the   Alaska   Workforce                                                                    
                                                                                                                                
     Investment  Board to  administer  the Alaska  Technical                                                                    
                                                                                                                                
     and   Vocational   Education   Program   (TVEP).   This                                                                    
                                                                                                                                
     legislation  reauthorizes the  allocation  of the  TVEP                                                                    
                                                                                                                                
     funding for five years.                                                                                                    
                                                                                                                                
                                                                                                                                
     TVEP was  established by Legislature  in 2000  with the                                                                    
                                                                                                                                
     purpose of  enhancing the quality and  accessibility of                                                                    
                                                                                                                                
     job training  across the  state, and  aligning training                                                                    
                                                                                                                                
     with  regional   workforce  demands.  TVEP   funds  are                                                                    
                                                                                                                                
     obtained from  a portion  of employee  contributions to                                                                    
                                                                                                                                
     the unemployment insurance trust fund.                                                                                     
                                                                                                                                
                                                                                                                                
     The  TVEP   funds  are   allocated  to   technical  and                                                                    
                                                                                                                                
     vocational education entities  across Alaska designated                                                                    
                                                                                                                                
     by AS 23.15.835. Each entity  receives a set percentage                                                                    
                                                                                                                                
     of  the  TVEP funds  available  each  fiscal year.  The                                                                    
                                                                                                                                
     current allocation  sunsets June  30, 2017.  Unless the                                                                    
                                                                                                                                
     allocation  is  reauthorized   this  funding  will  sit                                                                    
                                                                                                                                
     unused in  the TVEP  account instead  of being  used by                                                                    
                                                                                                                                
     these entities to train Alaskans.                                                                                          
                                                                                                                                
                                                                                                                                
     TVEP recipients  are required by  statute to  track and                                                                    
                                                                                                                                
     report  program   outcomes  to  the   Alaska  Workforce                                                                    
                                                                                                                                
     Investment  Board. Each  year  the  Board compiles  and                                                                    
                                                                                                                                
     provides to  the legislature a TVEP  performance report                                                                    
                                                                                                                                
     containing this  information. In Fiscal Year  2016, the                                                                    
                                                                                                                                
     ten  TVEP  recipients  were allocated  $12,510,900  and                                                                    
                                                                                                                                
     served 10,295 youth and adults.  A statewide network of                                                                    
                                                                                                                                
     training  providers   is  critical  to   developing  an                                                                    
                                                                                                                                
     Alaskan workforce.                                                                                                         
                                                                                                                                
                                                                                                                                
     This  legislation  is  necessary to  help  educate  and                                                                    
                                                                                                                                
     train Alaskans for Alaska's jobs.                                                                                          
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  FANSLER   listed  the  programs   that  currently                                                               
                                                                                                                                
receive TVEP funds:   University of Alaska  statewide receives 45                                                               
                                                                                                                                
percent,  Galena  Interior  Learning Academy  (GILA)  receives  4                                                               
                                                                                                                                
percent,  the  Alaska Technical  Center  in  Kotzebue receives  9                                                               
                                                                                                                                
percent,  Alaska Vocational  Technical Center  (AVTEC) in  Seward                                                               
                                                                                                                                
receives  17   percent,  the   Northwestern  Alaska   Career  and                                                               
                                                                                                                                
Technical  Center  (NACTEC)  in  Nome  receives  3  percent,  the                                                               
                                                                                                                                
Southwest Alaska Vocational and  Education Center (SAVEC) in King                                                               
                                                                                                                                
Salmon receives  3 percent, Yuut Elitnaurviat  in Bethel receives                                                               
                                                                                                                                
9 percent,  Partners for  Progress in  Delta receives  3 percent,                                                               
the Amundsen  Educational Center in Soldotna  receives 2 percent,                                                               
                                                                                                                                
and Ilisagvik College in Utqiagvik receives 5 percent.                                                                          
                                                                                                                                
                                                                                                                                
REPRESENTATIVE FANSLER explained that  the bill would reauthorize                                                               
                                                                                                                                
funding for five  years and the distributions would  be set until                                                               
                                                                                                                                
June 30, 2022.   He expressed that the bill  is important to many                                                               
                                                                                                                                
communities  around the  state and  is important  to the  state's                                                               
                                                                                                                                
resource  development  systems.    The  bill  would  ensure  that                                                               
                                                                                                                                
Alaskans are trained to perform the jobs in their regions.                                                                      
                                                                                                                                
                                                                                                                                
3:23:12 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH asked where the funds come from.                                                                           
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  FANSLER  described  that  TVEP  is  funded  by  a                                                               
                                                                                                                                
portion of  the contributions to  unemployment insurance  paid by                                                               
                                                                                                                                
every working  Alaskan.  The  funds are distributed  to technical                                                               
                                                                                                                                
and  vocational education  entities  across  Alaska's regions  in                                                               
                                                                                                                                
accordance with AS 23.15.835.                                                                                                   
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  BIRCH asked  how TVEP  benefits his  constituents                                                               
                                                                                                                                
who have funds taken out of their wages.                                                                                        
                                                                                                                                
                                                                                                                                
REPRESENTATIVE   FANSLER  noted   that  unemployment   [insurance                                                               
                                                                                                                                
contributions]  are   currently  pulled  out   for  "unemployment                                                               
                                                                                                                                
reasons."   He said that  one benefit of  TVEP is the  ability to                                                               
                                                                                                                                
train a  worker for a  well-paying job,  like those on  the North                                                               
                                                                                                                                
Slope.   He  added that  the  programs are  regionally based  and                                                               
                                                                                                                                
target  the industries  of each  region.   He explained  that the                                                               
                                                                                                                                
Yuut Elitnaurviat  in Bethel does  a lot of  [Commercial Driver's                                                               
                                                                                                                                
License]  (CDL) training.   He  proposed one  might consider  the                                                               
                                                                                                                                
TVEP program as an opportunity  for upward mobility for employees                                                               
to  get better  jobs, for  Alaska  to keep  its high-paying  jobs                                                               
                                                                                                                                
within the state,  and [to have the wages from  such jobs remain]                                                               
                                                                                                                                
in Alaska's economy.                                                                                                            
                                                                                                                                
                                                                                                                                
3:25:25 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  BIRCH  offered   his  interpretation  that  [TVEP                                                               
                                                                                                                                
funding] "comes  out of the hide  of the working person"  and the                                                               
                                                                                                                                
money is taken  out of an individual's paycheck  to fund training                                                               
                                                                                                                                
for someone that  might replace him/her.  He said  he is not that                                                               
                                                                                                                                
is a good  thing.  He acknowledged  the pot of money  is big, but                                                               
                                                                                                                                
he questioned  what the  return value  is for  the person  who is                                                               
                                                                                                                                
working and seeing his/her paycheck diminish.                                                                                   
                                                                                                                                
                                                                                                                                
REPRESENTATIVE   FANSLER  responded   that   there   is  a   wide                                                               
                                                                                                                                
distribution   of  jobs   around   the  state   that  require   a                                                               
                                                                                                                                
professional degree.   He  said that TVEP  is a  program designed                                                               
                                                                                                                                
specifically  for jobs  that would  utilize resource  development                                                               
                                                                                                                                
industries to  provide skills  to Alaskans.   He stated  that the                                                               
                                                                                                                                
funding mechanisms for [TVEP] have  been in place for many years.                                                               
                                                                                                                                
He remarked:                                                                                                                    
                                                                                                                                
                                                                                                                                
     Ideally, I  think what  we all want  as Alaskans  is to                                                                    
                                                                                                                                
     [at] some  point get to  a place where workers  can ...                                                                    
                                                                                                                                
     get  that upward  mobility and  be able  to say,  "I no                                                                    
                                                                                                                                
     longer ... qualify  for ... just the  bare minimum wage                                                                    
                                                                                                                                
     job."                                                                                                                      
                                                                                                                                
                                                                                                                                
REPRESENTATIVE   FANSLER   suggested   that  TVEP   provides   an                                                               
                                                                                                                                
opportunity for  such a worker  to get  a job with  a respectable                                                               
                                                                                                                                
living wage to  bring back to the community and  help the overall                                                               
                                                                                                                                
economy of Alaska.   He noted that billions of  dollars leave the                                                               
state each year with people that  don't live in Alaska:  He said,                                                               
                                                                                                                                
"They're working  two on,  and then they're  flying down  to live                                                               
                                                                                                                                
their two off."   He observed that such money  is being taken out                                                               
                                                                                                                                
of the  Alaskan economy and  is directly impacting Alaskans.   He                                                               
                                                                                                                                
remarked:                                                                                                                       
                                                                                                                                
                                                                                                                                
     We want  those jobs  to being going  to folks  that are                                                                    
                                                                                                                                
     going  to -  if  they are  taking a  two  on, two  off,                                                                    
                                                                                                                                
     they're  going to  return to  your ...  region; they're                                                                    
                                                                                                                                
     going  to come  back,  and they're  going  to put  that                                                                    
                                                                                                                                
     money back ... into the economy locally.                                                                                   
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  FANSLER offered  that the  goal of  HB 141  is to                                                               
                                                                                                                                
train Alaskans to do Alaska's jobs.                                                                                             
                                                                                                                                
                                                                                                                                
3:28:53 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  STUTES asked  whether the  funds for  the program                                                               
                                                                                                                                
come from "the unemployment that is paid."                                                                                      
                                                                                                                                
                                                                                                                                
REPRESENTATIVE FANSLER answered yes.                                                                                            
                                                                                                                                
                                                                                                                                
REPRESENTATIVE    STUTES   offered    her   understanding    that                                                               
                                                                                                                                
unemployment  insurance would  not be  reduced even  if the  TVEP                                                               
                                                                                                                                
program were discontinued.                                                                                                      
                                                                                                                                
                                                                                                                                
REPRESENTATIVE FANSLER agreed.  He remarked:                                                                                    
                                                                                                                                
                                                                                                                                
     This is not  going to be a means of  putting money back                                                                    
                                                                                                                                
     in the pockets of currently  working Alaskans.  This is                                                                    
                                                                                                                                
     money that is simply  designated from that unemployment                                                                    
     removal to make sure that we can get as many Alaskans                                                                      
                                                                                                                                
     back to work as possible.                                                                                                  
                                                                                                                                
                                                                                                                                
3:29:56 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE WOOL  asked where  the Alaska Technical  Center is                                                               
                                                                                                                                
located.                                                                                                                        
                                                                                                                                
                                                                                                                                
REPRESENTATIVE FANSLER said it is in Kotzebue, Alaska.                                                                          
                                                                                                                                
                                                                                                                                
3:30:14 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  if other  states  make  similar                                                               
                                                                                                                                
investments with unemployment insurance  benefits.  He also asked                                                               
                                                                                                                                
what  percent of  all the  collected unemployment  insurance TVEP                                                               
                                                                                                                                
receives.                                                                                                                       
                                                                                                                                
                                                                                                                                
REPRESENTATIVE FANSLER  said he would follow  up with information                                                               
                                                                                                                                
on other  states' unemployment investments.   He noted  that TVEP                                                               
                                                                                                                                
receives  .16  percent  of the  employee  unemployment  insurance                                                               
                                                                                                                                
contributions.                                                                                                                  
                                                                                                                                
                                                                                                                                
3:31:34 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH  asked if [paying unemployment]  is optional                                                               
                                                                                                                                
to the  employee.  He said,  "Obviously, if people ...  choose to                                                               
                                                                                                                                
have  a  benefit,  then  they  can  opt  to."    He  offered  his                                                               
                                                                                                                                
understanding that  the program is basically  just "layered into"                                                               
                                                                                                                                
what  is perceived  to be  unemployment  insurance; however,  the                                                               
                                                                                                                                
program takes $5 million from  working people's paychecks to fund                                                               
                                                                                                                                
training all over the state.                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE FANSLER responded that there  is a good chance the                                                               
                                                                                                                                
working Alaskans [who contribute  to unemployment insurance] have                                                               
                                                                                                                                
passed  through TVEP  programs to  qualify  for their  jobs.   He                                                               
                                                                                                                                
suggested  that they  are  paying  back into  a  system that  has                                                               
                                                                                                                                
already benefited them.   He mentioned that  the program provides                                                               
                                                                                                                                
training  at a  reasonable  price close  to communities  allowing                                                               
                                                                                                                                
individuals  to  become a  "very  important  part of  our  fiscal                                                               
                                                                                                                                
climate."                                                                                                                       
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  BIRCH pointed  out  that employees  don't have  a                                                               
                                                                                                                                
choice to participate.                                                                                                          
                                                                                                                                
                                                                                                                                
3:33:33 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR  KITO  indicated  that  the  money is  being  paid  by  the                                                               
                                                                                                                                
employees  regardless   of  whether  or  not   the  TVEP  program                                                               
                                                                                                                                
continues.  He commented that  the program provides opportunities                                                               
                                                                                                                                
for  retraining  individuals  who  might need  to  change  career                                                               
                                                                                                                                
paths.  He remarked:                                                                                                            
                                                                                                                                
                                                                                                                                
     Not having that opportunity, I  think, is going to be a                                                                    
                                                                                                                                
     challenge  for   Alaska,  especially  when  we   see  a                                                                    
                                                                                                                                
     contraction in  the economy where people  might need to                                                                    
                                                                                                                                
     be  retrained.   So, we  could  we let  the program  go                                                                    
                                                                                                                                
     away, but  then we're  not going to  have opportunities                                                                    
                                                                                                                                
     for individuals  in Alaska that could  get the training                                                                    
                                                                                                                                
     that  could get  them  into productive  careers in  the                                                                    
                                                                                                                                
     future.   So I do think  that the idea is  ... keep the                                                                    
                                                                                                                                
     program going  so we can  keep some  training available                                                                    
                                                                                                                                
     for people that might need to change careers.                                                                              
                                                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH asked for clarification  that the program is                                                               
                                                                                                                                
paid for with unemployment insurance.                                                                                           
                                                                                                                                
                                                                                                                                
CHAIR KITO answered, "Correct."                                                                                                 
                                                                                                                                
                                                                                                                                
3:34:34 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  KNOPP   expressed  that   Representative  Birch's                                                               
                                                                                                                                
concerns  are unrelated  to  HB  141.   He  noted  that the  bill                                                               
                                                                                                                                
extends the deadline by five  years and allocates a percentage of                                                               
                                                                                                                                
money already collected.                                                                                                        
                                                                                                                                
                                                                                                                                
3:35:05 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE FANSLER agreed  that the bill does  not affect how                                                               
                                                                                                                                
much is taken out of  the unemployment compensation.  Rather, the                                                               
                                                                                                                                
bill designates  a method to  use those funds for  vocational and                                                               
                                                                                                                                
technical education programs.                                                                                                   
                                                                                                                                
                                                                                                                                
3:36:17 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  WOOL asked  if the  approximately $4  million [of                                                               
                                                                                                                                
TVEP funds] represents .016 of  all [unemployment insurance] (UI)                                                               
                                                                                                                                
contributions.                                                                                                                  
                                                                                                                                
                                                                                                                                
REPRESENTATIVE FANSLER clarified that it is .16 percent.                                                                        
                                                                                                                                
                                                                                                                                
3:37:28 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  asked   how  much  unemployment                                                               
                                                                                                                                
insurance is captured  on an average yearly basis  since it began                                                               
                                                                                                                                
in 2000.                                                                                                                        
                                                                                                                                
                                                                                                                                
3:37:49 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
PALOMA   HARBOUR,   Director,   Central   Office,   Division   of                                                               
                                                                                                                                
Administrative   Services,  Department   of  Labor   &  Workforce                                                               
                                                                                                                                
Development (DLWD),  responded that she  does not have  a rolling                                                               
                                                                                                                                
total from 2000.   She explained that the amount  projected to be                                                               
                                                                                                                                
available in  the fund for  distribution in fiscal year  2018 (FY                                                               
                                                                                                                                
18) is  almost $12 million,  which is  similar to the  last three                                                               
                                                                                                                                
years.                                                                                                                          
                                                                                                                                
                                                                                                                                
3:38:49 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO asked whether $12  million is the entire collection of                                                               
                                                                                                                                
unemployment insurance or the amount available for TVEP.                                                                        
                                                                                                                                
                                                                                                                                
MS. HARBOUR clarified that it is the amount available for TVEP.                                                                 
                                                                                                                                
                                                                                                                                
3:39:03 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH  asked what flexibility the  legislature has                                                               
                                                                                                                                
in designating the use of the TVEP funds.                                                                                       
                                                                                                                                
                                                                                                                                
MS.  HARBOUR  reported  that  the   entities  are  designated  in                                                               
                                                                                                                                
statute;  therefore, the  legislature  decides  who receives  the                                                               
                                                                                                                                
funding and what percentage they receive.   She noted that HB 141                                                               
                                                                                                                                
is  a straight  reauthorization of  the current  distribution for                                                               
                                                                                                                                
five more years.                                                                                                                
                                                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH asked  if the .16 percent  is the percentage                                                               
                                                                                                                                
of the total unemployment insurance received by TVEP.                                                                           
                                                                                                                                
                                                                                                                                
MS. HARBOUR  responded that  .16 percent is  the percent  of each                                                               
                                                                                                                                
employee's UI  taxable wage base  - which  is close to  $40,000 -                                                               
                                                                                                                                
that goes into  the TVEP fund for each employee.   She noted that                                                               
                                                                                                                                
overall  UI  employment  contributions  vary each  year,  but  on                                                               
                                                                                                                                
average they are about .5 percent of the taxable wage base.                                                                     
                                                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH asked,  "So .16 goes into .5  about 3 times,                                                               
                                                                                                                                
so it's like 30 percent?"                                                                                                       
                                                                                                                                
                                                                                                                                
MS. HARBOUR responded, "That would makes sense."                                                                                
                                                                                                                                
                                                                                                                                
REPRESENTATIVE   BIRCH  concluded   that   30   percent  of   the                                                               
                                                                                                                                
unemployment insurance is being redirected to TVEP funds.                                                                       
                                                                                                                                
                                                                                                                                
MS. HARBOUR  answered no.   She explained  that 30 percent  of an                                                               
                                                                                                                                
employees'  contribution  goes to  TVEP,  and  the employer  pays                                                               
                                                                                                                                
another .7 percent.                                                                                                             
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  BIRCH  described  that  one-third  of  employee's                                                               
                                                                                                                                
contribution  is  being  directed  by the  legislature  to  these                                                               
                                                                                                                                
programs.   He  asked whether  there are  any constraints  on the                                                               
                                                                                                                                
percentages.    He  said  he  is  challenged  by  the  idea  that                                                               
                                                                                                                                
unemployment insurance is funding education.                                                                                    
                                                                                                                                
                                                                                                                                
MS. HARBOUR stated that [the  legislature] could direct up to 100                                                               
                                                                                                                                
percent  of the  employee contribution  to TVEP.   She  explained                                                               
                                                                                                                                
that  doing  so  would  impact  the  amount  contributed  by  the                                                               
                                                                                                                                
employer:  There is a formula  describing how much money needs to                                                               
                                                                                                                                
be collected  to support unemployment  insurance.   She remarked,                                                               
                                                                                                                                
"If you decide  to divert more of the  employee's contribution to                                                               
                                                                                                                                
training programs,  then the employer  will have to fund  more of                                                               
that  total  contribution  that's  needed  to  fund  unemployment                                                               
                                                                                                                                
insurance."                                                                                                                     
                                                                                                                                
                                                                                                                                
REPRESENTATIVE   BIRCH  said   that  unemployment   insurance  is                                                               
                                                                                                                                
supposed  to  be available  to  those  who  are unemployed.    He                                                               
                                                                                                                                
offered his  belief that using a  third of the insurance  to fund                                                               
                                                                                                                                
an education  program for those  who are already employed  is not                                                               
                                                                                                                                
using the funds as they were originally intended.                                                                               
                                                                                                                                
                                                                                                                                
3:43:24 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
HEIDI  DRYGAS,  Commissioner,  Department of  Labor  &  Workforce                                                               
                                                                                                                                
Development (DLWD), said  she will follow up  with the percentage                                                               
                                                                                                                                
of  overall   UI  [that   goes  to  TVEP].     She   offered  her                                                               
                                                                                                                                
understanding  that  TVEP  has  been working  since  2000.    She                                                               
                                                                                                                                
offered that  the adage  'A rising tide  lifts all  boats' really                                                               
                                                                                                                                
encapsulates what the TVEP program is  about.  She stated that UI                                                               
                                                                                                                                
is an  insurance program which  kicks in  when someone is  out of                                                               
                                                                                                                                
work.    She explained  that  the  TVEP programs  fall  "squarely                                                               
                                                                                                                                
within the  ambit of  unemployment insurance."   She  opined that                                                               
                                                                                                                                
the idea  is for people to  collectively have a portion  of their                                                               
                                                                                                                                
insurance  syphoned off  to help  all Alaskans  go back  to work.                                                               
                                                                                                                                
She noted  that TVEP has 10  recipients across the state  who use                                                               
                                                                                                                                
the  money to  train Alaskans  for  jobs -  which is  why UI  was                                                               
                                                                                                                                
created.    She  noted  that   the  program  has  been  extremely                                                               
                                                                                                                                
successful and the department fully supports the program.                                                                       
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  BIRCH expressed  that  he  buys insurances  which                                                               
                                                                                                                                
benefit him or  his beneficiaries.  He opined  that the one-third                                                               
                                                                                                                                
of employees'  contributions to  unemployment insurance  is being                                                               
                                                                                                                                
taken  away to  train other  people, which  does not  benefit the                                                               
                                                                                                                                
payers.   He  offered that  [the TVEP  program] doesn't  fill the                                                               
role  of  insurance   since  it  does  not   benefit  the  payer.                                                               
                                                                                                                                
Syphoning  off a  third of  $12 million  to support  colleges and                                                               
                                                                                                                                
learning academies is not insignificant.   He again noted that he                                                               
                                                                                                                                
is  not comfortable  with using  unemployment insurance  for that                                                               
                                                                                                                                
purpose.                                                                                                                        
                                                                                                                                
                                                                                                                                
3:46:24 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR  KITO  offered that  he  pays  for auto  insurance  without                                                               
                                                                                                                                
receiving a benefit  unless he is in an accident.   He stated, "I                                                               
                                                                                                                                
can  pay  for many  years  and  not  receive  a benefit  of  that                                                               
                                                                                                                                
insurance."   He added  that [employees] pay  to try  and benefit                                                               
                                                                                                                                
the overall  program which provides education  and retraining for                                                               
                                                                                                                                
unemployed individuals.                                                                                                         
                                                                                                                                
                                                                                                                                
3:47:10 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
FRED  VILLA,   Associate  Vice  President,   Workforce  Programs,                                                               
                                                                                                                                
University of Alaska Fairbanks (UAF),  testified in support of HB                                                               
                                                                                                                                
141.  He stated that the  university uses TVEP funding to respond                                                               
                                                                                                                                
to  the needs  of the  state of  Alaska with  outreach, academic,                                                               
                                                                                                                                
certification, and  professional development  programs.   He said                                                               
                                                                                                                                
that  the funding  is critical  to provide  the size,  scope, and                                                               
                                                                                                                                
quality  of  the  programs  and  is critical  to  the  access  to                                                               
                                                                                                                                
programs throughout  the state.   He relayed that  the university                                                               
                                                                                                                                
is  focused  on  career   pathways,  opportunities  for  economic                                                               
                                                                                                                                
development, and high-demand jobs  in areas throughout the state.                                                               
                                                                                                                                
He remarked:                                                                                                                    
                                                                                                                                
                                                                                                                                
     We   work   specifically   based  on   the   priorities                                                                    
                                                                                                                                
     established  by   the  [Alaska]   Workforce  Investment                                                                    
                                                                                                                                
     Board,  in priority  industries  and  occupations.   So                                                                    
        this is a critical[ly] important program to the                                                                         
                                                                                                                                
     university as we look at addressing issues across the                                                                      
                                                                                                                                
     state.                                                                                                                     
                                                                                                                                
                                                                                                                                
MR. VILLA drew attention to  documents [included in the committee                                                               
                                                                                                                                
packet]  which show  the milestones  and  contributions TVEP  has                                                               
                                                                                                                                
made across  the university system.   He explained that  TVEP has                                                               
                                                                                                                                
helped all health  related fields, which is  the largest industry                                                               
                                                                                                                                
sector  in  the state;  TVEP  has  helped  double the  number  of                                                               
                                                                                                                                
engineers; and it has helped  high school students receive double                                                               
                                                                                                                                
credit for technical skills.                                                                                                    
                                                                                                                                
                                                                                                                                
3:49:53 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
PEARL BROWER,  Ph.D., President, Ilisagvik College,  testified in                                                               
                                                                                                                                
support  of HB  141.   She  explained that  Ilisagvik College  is                                                               
                                                                                                                                
Alaska's  only  tribal  college and  only  independent  community                                                               
                                                                                                                                
college.   In  the fall  of  2016, it  was rated  the number  two                                                               
                                                                                                                                
community  college   in  the  nation  and   Alaska's  number  one                                                               
                                                                                                                                
community  college.   Ilisagvik College  is a  public institution                                                               
                                                                                                                                
accredited   by  the   Northwest  Commission   on  Colleges   and                                                               
                                                                                                                                
Universities.   She stated that  Ilisagvik College  advocates for                                                               
                                                                                                                                
the reauthorization of the TVEP  funds through HB 141.  Ilisagvik                                                               
                                                                                                                                
College is  among nine other  organizations that are part  of the                                                               
                                                                                                                                
[TVEP] program and that all  have a mission of providing quality,                                                               
                                                                                                                                
workforce development designed education  to support the needs of                                                               
                                                                                                                                
Alaskans.                                                                                                                       
                                                                                                                                
                                                                                                                                
DR. BROWER noted that Ilisagvik  College receives five percent of                                                               
                                                                                                                                
the allocated  TVEP funding.   The funding has  allowed Ilisagvik                                                               
                                                                                                                                
to serve  over 700 students.   She stated that  Ilisagvik College                                                               
                                                                                                                                
ranks  the  highest  in  2016   performance  measures  among  the                                                               
programs  that  receive TVEP  funding.    She relayed  that  82.7                                                               
                                                                                                                                
percent of Ilisagvik's TVEP students  were employed with a median                                                               
                                                                                                                                
wage of  over $24,000  within seven to  twelve months  of exiting                                                               
                                                                                                                                
the program.                                                                                                                    
                                                                                                                                
                                                                                                                                
DR. BROWER explained that TVEP  allows Ilisagvik College to offer                                                               
                                                                                                                                
training opportunities to residents across  the state in order to                                                               
                                                                                                                                
get credentialed  for jobs or  to advance in their  current jobs.                                                               
                                                                                                                                
Due to the many  required certifications, many employed residents                                                               
                                                                                                                                
must get certified  and recertified every year.   She stated that                                                               
                                                                                                                                
without  TVEP funding,  Ilisagvik College  would not  be able  to                                                               
                                                                                                                                
reach as many  Alaskans or provide as  many workforce development                                                               
                                                                                                                                
training opportunities.  She remarked:                                                                                          
                                                                                                                                
                                                                                                                                
     As we  look to the future,  I believe we all  know that                                                                    
                                                                                                                                
     education must  be a priority  for all of  us Alaskans.                                                                    
                                                                                                                                
     We  must  continue  to support  programs  that  provide                                                                    
                                                                                                                                
     opportunity  for   the  future   of  our  state.     At                                                                    
                                                                                                                                
     Ilisagvik, we say, "More  education, more options, more                                                                    
                                                                                                                                
     out of life."                                                                                                              
                                                                                                                                
                                                                                                                                
3:52:44 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
DENNIS DISHION, Executive  Director, Yuut Elitnaurviat, testified                                                               
                                                                                                                                
in  support of  HB  141.   He  explained  that Yuut  Elitnaurviat                                                               
                                                                                                                                
translates  to  "The  people's  learning  center."    The  center                                                               
                                                                                                                                
educates  local people  for family-wage  jobs  locally.   Various                                                               
                                                                                                                                
programs use TVEP  funding for new training  and incumbent worker                                                               
                                                                                                                                
training,  and several  programs operate  on an  as-needed basis.                                                               
                                                                                                                                
He remarked, "All of our  programs are structured to where people                                                               
                                                                                                                                
go to work at  the completion of their program."   In FY 16, Yuut                                                               
Elitnaurviat   provided  1,082   services  to   2,400  individual                                                               
                                                                                                                                
students.                                                                                                                       
                                                                                                                                
                                                                                                                                
MR.  DISHION  noted  that  the   programs  at  Yuut  Elitnaurviat                                                               
                                                                                                                                
include:     National  Center  for  Construction   and  Education                                                               
                                                                                                                                
Research   certifications,   adult  basic   education,   [General                                                               
                                                                                                                                
Educational  Development](GED) training,    dental assistant  and                                                               
                                                                                                                                
health aid therapy training,  certified nursing training, federal                                                               
                                                                                                                                
apprenticeship programs  for plumbers and  electricians, driver's                                                               
                                                                                                                                
license and  CDL programs, and other  various on-demand trainings                                                               
                                                                                                                                
that  lead  directly  to  employment.    He  said  that  TVEP  is                                                               
                                                                                                                                
important to Yuut Elitnaurviat to  maintain its structure and the                                                               
                                                                                                                                
ability to  train local  Alaskans close to  their home  for high-                                                               
                                                                                                                                
paying jobs.                                                                                                                    
                                                                                                                                
                                                                                                                                
3:54:44 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO opened public testimony on HB 141.                                                                                   
                                                                                                                                
                                                                                                                                
3:55:08 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
JOEL   ALOWA,  Community   Health  Services   Director,  Maniilaq                                                               
                                                                                                                                
Association, testified in  support of HB 141.   He explained that                                                               
                                                                                                                                
the Maniilaq  Association is a regional  non-profit that provides                                                               
                                                                                                                                
medical, social, and  tribal services for the  8,500 residents of                                                               
                                                                                                                                
the Northwest Artic Borough and the  community of Point Hope.  He                                                               
                                                                                                                                
said  that  the Maniilaq  Association  has  an important  working                                                               
                                                                                                                                
relationship with the Alaska Technical  Center (ACT) in Kotzebue,                                                               
                                                                                                                                
which  provides training  and  training  facilities for  regional                                                               
                                                                                                                                
medical  providers   and  water  sanitation   and  infrastructure                                                               
                                                                                                                                
technicians.    He observed that the medical and  health field is                                                               
                                                                                                                                
continually  changing  with new  practices  and  technology.   He                                                               
remarked,  "Our partnership  with  ACT enables  our  staff to  be                                                               
                                                                                                                                
trained  and  be  provided  with  the  best  medical  and  health                                                               
                                                                                                                                
environment services  possible to all  of our regional  and state                                                               
                                                                                                                                
residents."   He  stated  his support  of HB  141  and urged  the                                                               
                                                                                                                                
reauthorization of funds for technical training.                                                                                
                                                                                                                                
                                                                                                                                
3:56:39 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
ANISHA ELBIE, Co-executive  Director, Southwest Alaska Vocational                                                               
                                                                                                                                
Educational Center  (SAVEC), urged the committee's  support of HB                                                               
                                                                                                                                
141.  She stated that with  large declines in taxable wages, TVEP                                                               
                                                                                                                                
will have  a shortfall of  $1.32 million,  and SAVEC will  have a                                                               
                                                                                                                                
detriment  of  $39,600  for  FY  18.   She  said  that  providing                                                               
                                                                                                                                
training and  retraining Alaskans  for Alaskan jobs  becomes more                                                               
                                                                                                                                
important  as more  workers get  displaced.   She explained  that                                                               
                                                                                                                                
SAVEC  provides workforce  training  for 31  villages within  its                                                               
                                                                                                                                
service area,  which has  a direct impact  on the  local economy.                                                               
                                                                                                                                
She remarked:                                                                                                                   
                                                                                                                                
                                                                                                                                
     In  the  state's  2014  wage   report  for  SAVEC,  115                                                                    
                                                                                                                                
     [Hazardous  Waste  Operations and  Emergency  Response]                                                                    
                                                                                                                                
     (HAZWOPER) trainees contributed over  $5 million to the                                                                    
                                                                                                                                
     state's  economy  in  the first  year  after  training.                                                                    
                                                                                                                                
     This April, SAVEC will  have three HAZWOPER restructure                                                                    
                                                                                                                                
     courses  and   one  40-hour  HAZWOPER  class.     These                                                                    
                                                                                                                                
     students  ... will  continue to  add to  the local  and                                                                    
                                                                                                                                
     state economy.                                                                                                             
                                                                                                                                
                                                                                                                                
MS. ELBIE  noted that SAVEC is  working to improve the  hiring of                                                               
                                                                                                                                
Alaskans in  the seafood processing  industry.   She acknowledged                                                               
                                                                                                                                
that  the state  has made  gains  in hiring  residents but  still                                                               
                                                                                                                                
battles  non-resident hire.    She pointed  out  the Bristol  Bay                                                               
Borough has a non-resident hire  rate of 93.8 percent, Dillingham                                                               
                                                                                                                                
84.6 percent, and Lake and  Peninsula Borough 91.3 percent.  This                                                               
                                                                                                                                
amounts to over  3,300 jobs and over $29 million  that could have                                                               
                                                                                                                                
stayed in  the state and  multiplied in  the local economy.   She                                                               
                                                                                                                                
expressed that  SAVEC provides workforce training  through strong                                                               
                                                                                                                                
partnership funding  including TVEP and local  contributions from                                                               
                                                                                                                                
regional organizations:  the Bristol Bay Native  Corporation, the                                                               
                                                                                                                                
Bristol Bay Native Association, the  Bristol Bay Borough, and the                                                               
                                                                                                                                
Bristol Bay Housing  Authority.  She stated  that the [University                                                               
                                                                                                                                
of Alaska  Fairbanks] (UAF)  Bristol Bay  Campus and  the Bristol                                                               
                                                                                                                                
Bay  Economic   Development  Corporation   provide  contributions                                                               
                                                                                                                                
directly  for training.   Since  the fall  of 2016,  152 students                                                               
                                                                                                                                
have been trained  in 22 classes at SAVEC, and  there are 12 more                                                               
                                                                                                                                
trainings planned  this spring.   She  thanked the  committee and                                                               
                                                                                                                                
the bill sponsor.                                                                                                               
                                                                                                                                
                                                                                                                                
4:00:06 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
ANNETTE   CARUSO,   Co-executive   Director,   Southwest   Alaska                                                               
                                                                                                                                
Vocational Educational  Center (SAVEC),  testified in  support of                                                               
                                                                                                                                
HB 141.   She stated that she  had nothing further to  add to Ms.                                                               
                                                                                                                                
Elbie's testimony.                                                                                                              
                                                                                                                                
                                                                                                                                
4:00:19 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
D'ANNE  HAMILTON, Personnel  Officer, Teck  Alaska, testified  in                                                               
                                                                                                                                
support of HB  141.  She explained that Teck  Alaska operates the                                                               
                                                                                                                                
Red Dog  mine in Northwest Alaska  and employs 600 people  at its                                                               
                                                                                                                                
busiest time  of the  year.   She stated  that Teck  Alaska works                                                               
                                                                                                                                
closely with  the Alaska Technical  Center and provides  input to                                                               
                                                                                                                                
develop  [Alaska  Technical  Center's] (ATC)  process  technology                                                               
                                                                                                                                
program.   She  noted  that  the ATC  responded  quickly to  Teck                                                               
Alaska's  request  for more  soft  skill  development, which  was                                                               
                                                                                                                                
important to  Teck Alaska.   She explained  that ATC  revised its                                                               
                                                                                                                                
schedule to demonstrate  to students what working long  days at a                                                               
                                                                                                                                
mine would  be like and show  a realistic viewpoint of  life in a                                                               
                                                                                                                                
mine.                                                                                                                           
                                                                                                                                
                                                                                                                                
MS. HAMILTON offered  her belief that [training  at ATC] improves                                                               
                                                                                                                                
employee retention.  She noted  that Teck Alaska recently brought                                                               
                                                                                                                                
11  ATC  students  to  the  mine to  build  on  ATC  training  by                                                               
                                                                                                                                
providing job shadow experience and  allowing the students to see                                                               
                                                                                                                                
firsthand  the   work  they  could  be   doing  after  completing                                                               
                                                                                                                                
training.   She remarked that  ATC helps students gain  access to                                                               
                                                                                                                                
high-paying jobs and make connections  to the industry that would                                                               
                                                                                                                                
likely  not  have happened  without  ATC.   Through  its  process                                                               
                                                                                                                                
technology and  millwright maintenance  programs, ATC  works very                                                               
                                                                                                                                
hard to teach the skills needed  at the mine.  She expressed that                                                               
                                                                                                                                
TVEP funding  is important for ATC  to continue its work  and she                                                               
                                                                                                                                
urged the  committee to reauthorize  funding for TVEP  by passing                                                               
                                                                                                                                
HB 141.                                                                                                                         
                                                                                                                                
                                                                                                                                
4:02:28 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHERYL  EDENSHAW,   Director,  Alaska  Technical   Center  (ATC),                                                               
                                                                                                                                
testified in support  of the reauthorization of  funding for TVEP                                                               
                                                                                                                                
proposed under HB  141.  She noted that ATC  is recognized by the                                                               
                                                                                                                                
state as a statewide post-secondary  training center eligible for                                                               
                                                                                                                                
TVEP funding.  She thanked the  committee and the State of Alaska                                                               
                                                                                                                                
for the  support of workforce  development by investments  to ATC                                                               
                                                                                                                                
over the  years.  She stated  that ATC has key  partnerships with                                                               
                                                                                                                                
business  and  industry to  train  safe  and responsible  Alaskan                                                               
                                                                                                                                
workers  and to  help develop  and sustain  the state's  economy.                                                               
                                                                                                                                
She remarked:                                                                                                                   
                                                                                                                                
                                                                                                                                
     Without the TVEP  funds, we would not be  in a position                                                                    
                                                                                                                                
     to   maintain   our   long-term  commitment   to   meet                                                                    
                                                                                                                                
     employers'  needs in  the local  and statewide  economy                                                                    
                                                                                                                                
     that  we   fulfilled  since  our  inception   in  1981.                                                                    
                                                                                                                                
     Without TVEP funding,  we would not be  able to provide                                                                    
                                                                                                                                
     training necessary for jobs in  the ... areas of health                                                                    
                                                                                                                                
     care,   resource   development,   process   technology,                                                                    
                                                                                                                                
     culinary  arts, and  construction training.   We  would                                                                    
                                                                                                                                
     also  be not  poised to  respond to  employers' market-                                                                    
                                                                                                                                
     driven, on-demand  training needs  in a  timely fashion                                                                    
                                                                                                                                
     to align with  those job opportunities.  I  urge you to                                                                    
                                                                                                                                
     support reauthorization  of TVEP and, with  the state's                                                                    
                                                                                                                                
     help, we can build  a future for Alaskans strengthening                                                                    
                                                                                                                                
     our families and communities across the state.                                                                             
                                                                                                                                
                                                                                                                                
4:04:35 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
KAREN  CEDZO,  Partners  for  Progress  in  Delta,  testified  in                                                               
                                                                                                                                
support of HB  141.  She explained that Partners  for Progress in                                                               
                                                                                                                                
Delta has  been a part  of TVEP's regional training  center group                                                               
                                                                                                                                
since  2008.   Partners in  Progress for  Delta came  about as  a                                                               
                                                                                                                                
result  of the  U.S. Department  of Defense  (DoD) identifying  a                                                               
                                                                                                                                
lack of skilled workers in Delta  Junction when it was making the                                                               
                                                                                                                                
decision   whether   to   establish   a   ground-based   military                                                               
                                                                                                                                
installation  in  Delta  Junction.     She  noted  that  the  DoD                                                               
                                                                                                                                
completed an  economic development  report identifying a  lack of                                                               
                                                                                                                                
skilled  workers,  which  resulted  in  the  Delta/Greely  School                                                               
                                                                                                                                
District taking the lead to  bring educational partners together.                                                               
                                                                                                                                
This led to  a very formal educational  consortium which includes                                                               
                                                                                                                                
partners such  as: the Delta/Greely  School District,  the Alaska                                                               
                                                                                                                                
Works Partnership,  the UAF Community and  Technical College, and                                                               
the UAF Cooperative  Extension Service.  She stated  that all the                                                               
                                                                                                                                
partners have  a dedicated vision of  building Alaska's workforce                                                               
                                                                                                                                
through education and training.                                                                                                 
                                                                                                                                
                                                                                                                                
MS.  CEDZO stated  that  "the board"  remains  committed to  that                                                               
                                                                                                                                
vision.  She stated her  interviews with students involved in the                                                               
                                                                                                                                
program  have  shown  her  how   life-changing  the  program  is,                                                               
                                                                                                                                
especially for  the young people  in the community.   She stated,                                                               
                                                                                                                                
"Many would not  have the opportunity to go on  and get real jobs                                                               
                                                                                                                                
and be  able to contribute to  a fund that makes  it possible for                                                               
                                                                                                                                
those in need to be assisted."   She noted that some young people                                                               
                                                                                                                                
who do  not plan  on attending  college are not  sure what  do to                                                               
                                                                                                                                
with  their lives.    The  quality of  the  augmented career  and                                                               
                                                                                                                                
technical  classes at  the Delta/Greely  High School  operated by                                                               
                                                                                                                                
Delta/Greely School  district and Partners for  Progress in Delta                                                               
                                                                                                                                
would be at risk without TVEP funding.                                                                                          
                                                                                                                                
                                                                                                                                
MS. CEDZO  explained that  some high  school students  are taking                                                               
                                                                                                                                
dual-credit  courses   such  as  occupational   endorsements  for                                                               
                                                                                                                                
welding,  certificates  in   applied  business,  expanded  health                                                               
                                                                                                                                
classes, construction trade,  math for a trade,  English 111, and                                                               
                                                                                                                                
other  core  requirement  classes.   Additionally,  a  wealth  of                                                               
                                                                                                                                
programs  are offered  through  [UAF]  Cooperative Extension  for                                                               
                                                                                                                                
pesticide certification  and agricultural related programs.   She                                                               
                                                                                                                                
relayed that there are adults in Delta  who are not able to go to                                                               
                                                                                                                                
Fairbanks to  earn a  degree, but  can work  towards a  degree in                                                               
                                                                                                                                
Delta with the  local access to the facility.   She stated, "It's                                                               
                                                                                                                                
an amazing  experience to walk  into that building and  see young                                                               
                                                                                                                                
people's  eyes light  up  getting an  idea of  what  might be  an                                                               
                                                                                                                                
option for  a career  path in  their future."   She added  that a                                                               
                                                                                                                                
significant component  of the program  is the  entry-level summer                                                               
                                                                                                                                
construction  trade  academy  which  is  a  three-week  intensive                                                               
training program  in Delta.   It is an approved  training program                                                               
                                                                                                                                
from which some participants might have direct opportunities.                                                                   
                                                                                                                                
                                                                                                                                
MS. CEDZO  explained that since  the inception of the  academy in                                                               
                                                                                                                                
2006,  more   than  125  participants  have   been  accepted  for                                                               
                                                                                                                                
opportunities  in apprenticeships  or construction  trade related                                                               
                                                                                                                                
industry [positions].   She indicated that  the academy's twelfth                                                               
                                                                                                                                
program  would  be offered  in  June  as a  three-week  intensive                                                               
                                                                                                                                
program.   Students walk  away from the  program with  work ethic                                                               
                                                                                                                                
and safety  skills, as well  as certifications in such  things as                                                               
                                                                                                                                
[Mine  Safety and  Health  Administration] (MSHA),  [Occupational                                                               
                                                                                                                                
Safety and Health Administration]  (OSHA), and forklift training.                                                               
                                                                                                                                
She listed that participants of  the program have come from North                                                               
                                                                                                                                
Pole,  Delta, Tok,  Glen Allen,  Valdez, Juneau,  and some  rural                                                               
                                                                                                                                
villages.   She  stated that  the program  has a  very successful                                                               
                                                                                                                                
working relationship with the operating engineers.                                                                              
                                                                                                                                
                                                                                                                                
4:10:13 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO announced that HB 141 was held over.                                                                                 
                                                                                                                                
                                                                                                                                
              HB 79-OMNIBUS WORKERS' COMPENSATION                                                                           
                                                                                                                                
                                                                                                                                
4:10:23 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO  announced that for  its final order of  business, the                                                               
                                                                                                                                
committee would return to HOUSE BILL  NO. 79, "An Act relating to                                                               
                                                                                                                                
workers'  compensation; repealing  the  second  injury fund  upon                                                               
                                                                                                                                
satisfaction  of  claims;  relating  to service  fees  and  civil                                                               
                                                                                                                                
penalties  for  the workers'  safety  programs  and the  workers'                                                               
                                                                                                                                
compensation  program; relating  to  the  liability of  specified                                                               
officers and  members of specified business  entities for payment                                                               
                                                                                                                                
of workers'  compensation benefits and civil  penalties; relating                                                               
                                                                                                                                
to  civil penalties  for underinsuring  or failing  to insure  or                                                               
                                                                                                                                
provide  security for  workers' compensation  liability; relating                                                               
                                                                                                                                
to preauthorization and timely payment  for medical treatment and                                                               
                                                                                                                                
services   provided    to   injured   employees;    relating   to                                                               
                                                                                                                                
incorporation  of reference  materials  in workers'  compensation                                                               
                                                                                                                                
regulations;   relating  to   proceedings  before   the  Workers'                                                               
                                                                                                                                
Compensation  Board;   providing  for  methods  of   payment  for                                                               
                                                                                                                                
workers'   compensation  benefits;   relating  to   the  workers'                                                               
                                                                                                                                
compensation benefits  guaranty fund  authority to claim  a lien;                                                               
                                                                                                                                
excluding  independent  contractors  from  workers'  compensation                                                               
                                                                                                                                
coverage;  establishing  the  circumstances under  which  certain                                                               
                                                                                                                                
nonemployee executive  corporate officers and members  of limited                                                               
                                                                                                                                
liability  companies may  obtain workers'  compensation coverage;                                                               
                                                                                                                                
relating to the  duties of injured employees to  report income or                                                               
                                                                                                                                
work; relating  to misclassification  of employees  and deceptive                                                               
                                                                                                                                
leasing;   defining   'employee';   relating  to   the   Workers'                                                               
                                                                                                                                
Compensation Board's  approval of  attorney fees in  a settlement                                                               
                                                                                                                                
agreement; and providing for an effective date."                                                                                
                                                                                                                                
                                                                                                                                
4:10:44 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  WOOL  moved  to   adopt  the  proposed  committee                                                               
                                                                                                                                
substitute (CS) for HB 79,  Version 30-GH1789\D, Wallace, 3/3/17.                                                               
                                                                                                                                
There being  no objection,  version D was  before committee  as a                                                               
                                                                                                                                
working document.                                                                                                               
                                                                                                                                
                                                                                                                                
4:11:59 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
DEBBIE   BANASZAK,    Legislative   Liaison,   Office    of   the                                                               
                                                                                                                                
Commissioner,  Department   of  Labor  &   Workforce  Development                                                               
(DLWD), presented the proposed changes in  HB 79, Version D.  She                                                               
                                                                                                                                
explained  that the  title was  changed to  reflect the  proposed                                                               
                                                                                                                                
changes in  the bill.   Section 9  added language stating  that a                                                               
                                                                                                                                
person  "actively in  charge of  the operations  of the  business                                                               
                                                                                                                                
entity"  or  a person  that  has  "the  authority to  insure  the                                                               
                                                                                                                                
business entity" would be liable  for penalties for an employer's                                                               
                                                                                                                                
failure to  insure.  The change  would ensure that if  a business                                                               
                                                                                                                                
entity has  11 members, all  with less than 10  percent ownership                                                               
                                                                                                                                
interest,  then  that  person  would  still  be  accountable  for                                                               
                                                                                                                                
uninsured  injuries and  penalties for  failing to  insure.   She                                                               
                                                                                                                                
added that  Section 11,  in Version D,  adds language  to clarify                                                               
                                                                                                                                
the Division's civil  penalty assessment, which must  be based on                                                               
                                                                                                                                
substantial  evidence.    The  section  also  clarifies  that  an                                                               
                                                                                                                                
employer's civil  penalty assessment is  based on the  amount the                                                               
                                                                                                                                
employer  would  have  paid  had the  business  been  insured  as                                                               
                                                                                                                                
required by law, including properly classifying its employees.                                                                  
                                                                                                                                
                                                                                                                                
MS. BANASZAK  relayed that  Section 13  deals with  civil penalty                                                               
                                                                                                                                
assessment appeal process and does  not have substantial changes;                                                               
                                                                                                                                
the previous  language in HB  79 was a  bit unclear.   She stated                                                               
                                                                                                                                
that Section 16 addresses preauthorization  by adding language to                                                               
                                                                                                                                
clarify that  the preauthorization request's estimated  fee would                                                               
                                                                                                                                
be  subject to  the Alaska  medical  fee schedule  just like  any                                                               
                                                                                                                                
other workers'  compensation medical bill.   Section 18 addresses                                                               
                                                                                                                                
the   hearing   schedule   and  gives   the   [Alaska]   Workers'                                                               
                                                                                                                                
Compensation  Board  control  of   the  scheduling  of  hearings.                                                               
                                                                                                                                
Having  the parties  control the  hearing scheduling  process has                                                               
                                                                                                                                
led to inefficiencies and protracted resolution.                                                                                
                                                                                                                                
                                                                                                                                
4:14:34 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MS.  BANASZAK   noted  that  Section  19   simplifies  the  self-                                                               
                                                                                                                                
representation  language of  the  previous version.   Section  23                                                               
                                                                                                                                
addresses  the reporting  of a  change in  compensation and  adds                                                               
                                                                                                                                
language stating  that the  division would  provide notice  to an                                                               
                                                                                                                                
employee   when   an   employer   has   terminated   or   changed                                                               
                                                                                                                                
compensation.   She explained  that Section  24 clarifies  how an                                                               
                                                                                                                                
employee  would   be  notified   that  his/her   employer  denied                                                               
                                                                                                                                
benefits.  Section  25 addresses penalties for  failure to timely                                                               
                                                                                                                                
preauthorize medical  care:  the  penalty would be 25  percent of                                                               
                                                                                                                                
the amount in the preauthorization request.                                                                                     
                                                                                                                                
                                                                                                                                
MS.  BANASZAK drew  attention  to Section  27,  which repeals  an                                                               
                                                                                                                                
earlier section addressing  how benefits are paid.   The previous                                                               
                                                                                                                                
section  required payment  by  check, but  with  so many  current                                                               
                                                                                                                                
options for payment,  it was determined that this  section was no                                                               
                                                                                                                                
longer needed.   She  noted that Section  28 revises  language to                                                               
                                                                                                                                
allow the Benefits  Guaranty Fund to file a lien  within one year                                                               
                                                                                                                                
of  its  knowledge  of  an  employee's  injury  or  death.    She                                                               
                                                                                                                                
explained  that sometimes  the fund  may not  become aware  of an                                                               
                                                                                                                                
injury  or death  when it  occurs.   She stated  that Section  30                                                               
                                                                                                                                
refines the  definition of independent contractor  to ensure that                                                               
                                                                                                                                
true  independent   contractors  can   continue  to   operate  as                                                               
                                                                                                                                
independent contractors.                                                                                                        
                                                                                                                                
                                                                                                                                
4:16:11 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH  recalled a letter from  the Alaska Trucking                                                               
                                                                                                                                
Association  -   an  association   that  relies   on  independent                                                               
                                                                                                                                
contractors.   He asked if  the association's concerns  have been                                                               
                                                                                                                                
addressed.                                                                                                                      
                                                                                                                                
                                                                                                                                
4:16:40 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MARIE   MARX,  Director,   Division  of   Workers'  Compensation,                                                               
                                                                                                                                
Department  of Labor  &  Workforce  Development (DLWD),  answered                                                               
                                                                                                                                
yes:   the department believes  the current  definition addresses                                                               
                                                                                                                                
the  concerns.   She added  that truckers  and other  stakeholder                                                               
                                                                                                                                
groups  such  as the  [Alaska  State  Home Building]  Association                                                               
                                                                                                                                
relayed  their concerns  to  the department  and  she offered  to                                                               
                                                                                                                                
detail how the concerns were met.                                                                                               
                                                                                                                                
                                                                                                                                
4:17:23 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MS. BANASZAK continued  presenting the changes in the  bill.  She                                                               
                                                                                                                                
noted  that  Section 36  discusses  persons  liable for  criminal                                                               
                                                                                                                                
penalties  for  failure to  pay  compensation  and adds  language                                                               
                                                                                                                                
similar to language in Section 9.   She explained that Section 37                                                               
                                                                                                                                
talks   about  persons   liable   for   criminal  penalties   for                                                               
                                                                                                                                
transferring assets.   It  adds a person  "actively in  charge of                                                               
                                                                                                                                
the operations of the business entity"  or a person that has "the                                                               
                                                                                                                                
authority to  insure the business  entity" as persons  liable for                                                               
                                                                                                                                
criminal  penalties for  knowingly transferring  assets with  the                                                               
                                                                                                                                
intent  to avoid  the payment  of  compensation.   She said  that                                                               
                                                                                                                                
Section 39  changes the  definition of  employee by  removing "in                                                               
                                                                                                                                
the service of" and inserting "employed by".                                                                                    
                                                                                                                                
                                                                                                                                
4:19:10 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  Ms.  Marx  to  go  through  the                                                               
                                                                                                                                
changes to the definition of employee.                                                                                          
                                                                                                                                
                                                                                                                                
MS. MARX explained that the new  revision is found in Section 30,                                                               
                                                                                                                                
page 17, line 7, which states  that the definition is intended to                                                               
                                                                                                                                
apply only  to workers'  compensation definitions,  not [Internal                                                               
Revenue  Service] (IRS)  or  other labor  law  definitions.   She                                                               
                                                                                                                                
noted that line 8 addresses a  relayed concern by adding "for the                                                               
                                                                                                                                
purposes of  this chapter only".   She noted that  another change                                                               
                                                                                                                                
was  made on  page 17,  lines 13-15,  to address  concerns raised                                                               
                                                                                                                                
about required control and direction;  the new language clarifies                                                               
                                                                                                                                
that  control   and  direction  performed   as  a  result   of  a                                                               
                                                                                                                                
requirement of law or contract  would be allowed.  An independent                                                               
                                                                                                                                
contractor  could  still  have   control  and  oversight  without                                                               
                                                                                                                                
impacting  whether   the  individual  is  determined   to  be  an                                                               
                                                                                                                                
independent contractor.                                                                                                         
                                                                                                                                
                                                                                                                                
MS. MARX offered  an example in response to a  question:  If hard                                                               
                                                                                                                                
hats  are  required  for  health and  safety  reasons,  then  the                                                               
                                                                                                                                
business for  whom the  services are  being provided  can control                                                               
                                                                                                                                
whether  the  independent contractor  wears  a  hard hat.    Such                                                               
                                                                                                                                
business control  would not disqualify the  individual from being                                                               
                                                                                                                                
considered an independent contractor.                                                                                           
                                                                                                                                
                                                                                                                                
4:21:45 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MS. MARX noted that another change  was made on lines 16-18, page                                                               
                                                                                                                                
17  of Version  D.   A concern  was raised  that contractors  may                                                               
                                                                                                                                
provide  materials  or  equipment  for  use  but  an  independent                                                               
                                                                                                                                
contractor  provides  all  the  other   tools  and  labor.    She                                                               
                                                                                                                                
remarked:                                                                                                                       
                                                                                                                                
                                                                                                                                
     After  hearing from  various  stakeholder groups,  this                                                                    
                                                                                                                                
     clarified that  an independent  contractor is  a person                                                                    
                                                                                                                                
     who provides tools, labor,  and other operational costs                                                                    
                                                                                                                                
     necessary,  and  recognized   now  that  materials  and                                                                    
                                                                                                                                
     equipment  can be  supplied by  the  contractor to  the                                                                    
      independent contractor without pushing that person -                                                                      
                                                                                                                                
     that independent contractor - out of the definition.                                                                       
                                                                                                                                
                                                                                                                                
MS.  MARX mentioned  another change  found on  page 17,  line 23,                                                               
                                                                                                                                
which  clarifies  that  any  license,  permit,  or  certification                                                               
                                                                                                                                
required  by  the work  the  independent  contractors does  would                                                               
                                                                                                                                
suffice:   the  previous version  had only  mentioned a  business                                                               
                                                                                                                                
license.  She  said that based on input  from various stakeholder                                                               
                                                                                                                                
groups  and  researching  other states'  determining  tests,  the                                                               
                                                                                                                                
department eliminated  the requirement to  meet 11 or  12 factors                                                               
                                                                                                                                
to be considered an independent contractor.   Instead of 11 or 12                                                               
                                                                                                                                
necessary  factors, Version  D provides  7 required  factors that                                                               
                                                                                                                                
must be  met, and  5 optional  factors, of which  3 must  be met.                                                               
                                                                                                                                
She offered  her opinion that  such a  test allows a  wide enough                                                               
                                                                                                                                
net  to  capture  the true  independent  contractors,  but  still                                                               
                                                                                                                                
narrow enough  to make  sure that employees  are not  included in                                                               
                                                                                                                                
the  definition.    Subparagraph  (H),  on  page  18,  lists  the                                                               
                                                                                                                                
optional "prongs" which allow for more flexibility.                                                                             
                                                                                                                                
                                                                                                                                
4:24:31 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE WOOL  asked if  the earlier  test had  required 11                                                               
                                                                                                                                
factors.                                                                                                                        
                                                                                                                                
                                                                                                                                
MS.  MARX  answered that  there  were  11 factors,  although  one                                                               
                                                                                                                                
factor was a  two-part requirement, so she  indicated [that could                                                               
                                                                                                                                
be considered a total of 12].                                                                                                   
                                                                                                                                
                                                                                                                                
REPRESENTATIVE WOOL  asked if  the 7 required  factors and  the 5                                                               
                                                                                                                                
optional  factors are  the  same  12 that  were  in the  original                                                               
                                                                                                                                
description.    He asked  if  it  is  accurate  to say  that  the                                                               
                                                                                                                                
description went from 12 [factors] to 10 out of 12.                                                                             
                                                                                                                                
                                                                                                                                
MS. MARX  answered, "That's  correct."  She  noted that  the most                                                               
                                                                                                                                
controversial and complicated "prong"  for stakeholder groups was                                                               
                                                                                                                                
(H)(v), which read as follows:                                                                                                  
                                                                                                                                
                                                                                                                                
     the person engages in a trade, occupation, profession,                                                                     
                                                                                                                                
      or business to provide services that are outside the                                                                      
                                                                                                                                
     usual course of business for the individual                                                                                
                                                                                                                                
                                                                                                                                
MS.  MARX explained  that  prong is  optional  under the  current                                                               
                                                                                                                                
version.   She  stated that  stakeholder feedback  indicated that                                                               
                                                                                                                                
this "prong"  would be  complicated to  apply; therefore,  it was                                                               
                                                                                                                                
reclassified  from a  mandatory  to  an optional  factor.   If  a                                                               
                                                                                                                                
person does  not meet that factor  but he/she does meet  three of                                                               
                                                                                                                                
the  other  factors,  then  he/she  could  still  qualify  as  an                                                               
                                                                                                                                
independent contractor.                                                                                                         
                                                                                                                                
                                                                                                                                
4:26:30 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  offered  his assumption  that  if  the                                                               
                                                                                                                                
independent contractor  [requirements are]  met by  an individual                                                               
                                                                                                                                
who has  employees, then he/she  would also need to  buy workers'                                                               
                                                                                                                                
compensation.                                                                                                                   
                                                                                                                                
                                                                                                                                
MS. MARX  stated that  is correct.   She added  that the  test is                                                               
                                                                                                                                
used  to determine  whether  a person  providing  services is  an                                                               
                                                                                                                                
independent  contractor.    She  said that  whether  or  not  the                                                               
                                                                                                                                
independent contractor has employees is a separate inquiry.                                                                     
                                                                                                                                
                                                                                                                                
4:27:46 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  KNOPP asked  if  home-based  businesses, such  as                                                               
                                                                                                                                
plumbers, are classified as a separate place of business.                                                                       
                                                                                                                                
                                                                                                                                
MS. MARX responded  that sub-subparagraph (ii), on  page 18, line                                                               
                                                                                                                                
10, states  that the  business location has  to be  separate from                                                               
                                                                                                                                
the location for which [the  independent contractor] is providing                                                               
                                                                                                                                
service.  She explained that  the department investigates whether                                                               
                                                                                                                                
or   not  the   independent  contractor   operates  out   of  the                                                               
                                                                                                                                
contractor's  business  or  receives  mail  at  the  contractor's                                                               
                                                                                                                                
business.  She remarked:                                                                                                        
                                                                                                                                
                                                                                                                                
     In this  day and  age, I  think it  is very  common for                                                                    
                                                                                                                                
     people to have  merely a website as their  base, but it                                                                    
                                                                                                                                
     has to  be just different  from that contractor,  so we                                                                    
                                                                                                                                
     would look  to where that contractor's  business is and                                                                    
                                                                                                                                
     see if they are there.                                                                                                     
                                                                                                                                
                                                                                                                                
REPRESENTATIVE KNOPP  asked what  was amended  in Sections  9 and                                                               
                                                                                                                                
11.                                                                                                                             
                                                                                                                                
                                                                                                                                
MS. MARX explained that Sections 9  and 11 have been repealed and                                                               
                                                                                                                                
reenacted in full.                                                                                                              
                                                                                                                                
                                                                                                                                
4:30:01 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE KNOPP read from a  confidential letter he received                                                               
                                                                                                                                
from a municipal attorney, as follows:                                                                                          
                                                                                                                                
                                                                                                                                
     I see no benefit from  deviating from the Federal Labor                                                                    
                                                                                                                                
     Standards  Act guidance  in Alaska  court jurisprudence                                                                    
                                                                                                                                
     regarding   the  distinction   between  employees   and                                                                    
                                                                                                                                
     independent contractors.  ... Subsection 11  of Section                                                                    
     31  of the  bill deviates  substantially from  existing                                                                    
                                                                                                                                
     status   quo    and   adds    unreasonable   additional                                                                    
                                                                                                                                
     requirements   defining  someone   as  an   independent                                                                    
                                                                                                                                
     contractor  that  exceeds  federal guidance  and  prior                                                                    
                                                                                                                                
     decisions by our Alaska Supreme Court.                                                                                     
                                                                                                                                
                                                                                                                                
REPRESENTATIVE KNOPP  added that  the attorney  has not  seen the                                                               
                                                                                                                                
committee  substitute.   He  asked  if  the committee  substitute                                                               
                                                                                                                                
alleviates the concerns  mentioned by the attorney.   He asked if                                                               
                                                                                                                                
the  bill would  be substantially  more restrictive  than federal                                                               
                                                                                                                                
labor standards.                                                                                                                
                                                                                                                                
                                                                                                                                
MS. MARX answered  that HB 79 has a very  narrow application:  It                                                               
                                                                                                                                
does  not  apply to  all  labor  standards,  it only  applies  to                                                               
                                                                                                                                
workers' compensation.   She  stated that in  the last  10 years,                                                               
                                                                                                                                
other states  have found that multi-factored  balancing tests are                                                               
                                                                                                                                
not  effective  in tackling  the  misclassification  issue.   She                                                               
                                                                                                                                
explained  that  the  IRS  has a  20-factor  balancing  test  [to                                                               
                                                                                                                                
determine  the  status  of  an   independent  contractor].    She                                                               
                                                                                                                                
suggested  that although  that test  may  work for  the IRS,  the                                                               
                                                                                                                                
multi-factor   balancing  tests   aren't  working   for  workers'                                                               
                                                                                                                                
compensation,  which  has a  goal  of  protecting employees  from                                                               
                                                                                                                                
severe  injury  or  death  and  protecting  employers  from  huge                                                               
                                                                                                                                
uninsured losses.   She said  that some employers  have contacted                                                               
                                                                                                                                
the  Division  of Workers'  Compensation  in  order be  proactive                                                               
                                                                                                                                
about  determining   whether  their  employees   are  independent                                                               
                                                                                                                                
contractors.  She remarked:                                                                                                     
                                                                                                                                
                                                                                                                                
     They  want  to   be  proactive,  and  we   want  to  be                                                                    
                                                                                                                                
     proactive. And we  give them a balancing  test where no                                                                    
                                                                                                                                
     one factor is determinative.   It is very difficult for                                                                    
                                                                                                                                
     these employers  - especially small  business employers                                                                    
     - to know whether they  meet that test without going to                                                                    
                                                                                                                                
     an  attorney and  perhaps  getting  some legal  advice.                                                                    
                                                                                                                                
     Our goal  is to make  this a  ... much clearer  test so                                                                    
                                                                                                                                
     employers know ahead of time  what the requirements are                                                                    
                                                                                                                                
     -  and employees  or independent  contractors can  know                                                                    
                                                                                                                                
     and protect themselves ....   So it is different and it                                                                    
                                                                                                                                
     was intended to be a change.                                                                                               
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  KNOPP  pointed out  that  within  the letters  of                                                               
                                                                                                                                
support [included  in the committee  packet], some  components of                                                               
                                                                                                                                
the  bill were  supported and  some  were not.   He  asked for  a                                                               
                                                                                                                                
breakdown of the areas of concern.                                                                                              
                                                                                                                                
                                                                                                                                
4:33:23 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO  stated that he plans  to weigh the issues  of concern                                                               
                                                                                                                                
and determine  whether the committee  will move forward  or cover                                                               
                                                                                                                                
the issues  in a future committee  meeting.  He said  he does not                                                               
                                                                                                                                
intend  to move  the bill  today and  the bill  will have  public                                                               
                                                                                                                                
testimony in the future.                                                                                                        
                                                                                                                                
                                                                                                                                
4:33:54 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON expressed  that the  multi-factor tests                                                               
                                                                                                                                
sound  like a  continuum of  behavior  or acts  undertaken by  an                                                               
                                                                                                                                
employee; however, HB 79 lays  out clear statements.  He analyzed                                                               
                                                                                                                                
that  in   the  current  system,   which  Ms.  Marx   claimed  is                                                               
                                                                                                                                
unsuccessful,  the   employer  must   sort  out   the  employee's                                                               
                                                                                                                                
classification based on tasks and actions.                                                                                      
                                                                                                                                
                                                                                                                                
4:34:41 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
MS.  MARX  responded that  the  current  test set  in  regulation                                                               
                                                                                                                                
defines  "employee".   She explained  that  some states  narrowly                                                               
                                                                                                                                
define  "independent contractor"  instead of  defining "employee"                                                               
                                                                                                                                
with  a  broad  definition.    Defining  "employee"  has  led  to                                                               
                                                                                                                                
complications   and   misclassification.      She   stated   that                                                               
                                                                                                                                
misclassification  is  being  dealt with  throughout  the  United                                                               
                                                                                                                                
States.   She  assessed that  the tests  defining "employee"  are                                                               
                                                                                                                                
more   difficult  to   apply.     States  defining   "independent                                                               
                                                                                                                                
contractor" have  a much clearer  application.  She said  that HB                                                               
                                                                                                                                
79 defines  "independent contractor"  and revises  the definition                                                               
                                                                                                                                
of  "employee"  to  mean  someone  that  is  not  an  independent                                                               
                                                                                                                                
contractor that has a contract for hire.                                                                                        
                                                                                                                                
                                                                                                                                
4:35:54 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE KNOPP offered that a  constituent of his is a real                                                               
                                                                                                                                
estate   broker,  and   all  of   his  brokers   are  independent                                                               
                                                                                                                                
contractors.    He  asked  how  HB 79  would  apply  to  such  an                                                               
                                                                                                                                
organization  in   regard  to  minimum  wage   and  [the  Federal                                                               
                                                                                                                                
Insurance Contributions Act] (FICA).                                                                                            
                                                                                                                                
                                                                                                                                
MS.  MARX answered,  "He  would  be safe."    She explained  that                                                               
                                                                                                                                
persons who  perform services for  real estate have  an exemption                                                               
                                                                                                                                
under  AS 23.30.230  paragraph (10),  and therefore  the Workers'                                                               
                                                                                                                                
Compensation Act does not apply to them.                                                                                        
                                                                                                                                
                                                                                                                                
4:37:14 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR  KITO announced  that there  will  be more  updates to  the                                                               
                                                                                                                                
expansive bill.                                                                                                                 
                                                                                                                                
                                                                                                                                
4:37:38 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE WOOL said, "Basically  there's two types of people                                                               
                                                                                                                                
in this  world - employees  and independent contractors.   Trying                                                               
                                                                                                                                
to define  employee got  complicated, so  you're going  to define                                                               
                                                                                                                                
what an employee isn't."                                                                                                        
                                                                                                                                
                                                                                                                                
MS. MARX responded  that there are more than two  types of people                                                               
                                                                                                                                
involved.  Someone could be a  volunteer or a trespasser, but for                                                               
                                                                                                                                
the purpose  of the bill, there  are two categories.    She added                                                               
                                                                                                                                
that  since  2007,  states have  found  that  multi-factor  tests                                                               
                                                                                                                                
defining "employee" don't work and  have led to misclassification                                                               
                                                                                                                                
and confusion  for employers.   She  explained that  HB 79  is in                                                               
                                                                                                                                
line  with what  many states  are doing  - defining  "independent                                                               
                                                                                                                                
contractor" instead of "employee".                                                                                              
                                                                                                                                
                                                                                                                                
REPRESENTATIVE WOOL asked  if doing so basically  defines what an                                                               
                                                                                                                                
employee isn't.                                                                                                                 
                                                                                                                                
                                                                                                                                
MS. MARX responded  that an employee would be someone  who is not                                                               
                                                                                                                                
an independent contractor  but also has a contract for  hire.  It                                                               
                                                                                                                                
differentiates them from a volunteer  or trespasser.  In response                                                               
                                                                                                                                
to a comment, she added that babysitters would also be exempted.                                                                
                                                                                                                                
                                                                                                                                
4:39:21 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE JOSEPHSON  stated his understanding that  the term                                                               
                                                                                                                                
"contract for  hire" would  include lawn-mowing  12-year-olds and                                                               
                                                                                                                                
could be complicated in court.                                                                                                  
                                                                                                                                
                                                                                                                                
MS.  MARX  responded  that  HB   79  applies  to  employers,  and                                                               
                                                                                                                                
employers are those who conduct  business.  She explained that as                                                               
a homeowner, unless you do business out of your house, you are                                                                  
                                                                                                                                
not an employer and would not fall under HB 79.                                                                                 
                                                                                                                                
                                                                                                                                
4:40:57 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
CHAIR KITO announced that HB 79 was held over.                                                                                  
                                                                                                                                
                                                                                                                                
4:41:40 PM                                                                                                                    
                                                                                                                                
                                                                                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
                                                                                                                                
There being no further business before the committee, the House                                                                 
                                                                                                                                
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
                                                                                                                                
4:42 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB141 Sponsor Statement 2.27.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 141
HB141 Sectional Analysis 2.27.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 141
HB141 Supporting Documents-Pages from UA TVEP Advocacy Package 2.27.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 141
HB079 Fiscal Note DOA-DRM 1.19.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 79
HB079 Supporting Documents-Letters of Support 3.3.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 79
HB141 Fiscal Note DOLWD-WD 2.24.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 141
HB141 Fiscal Note-DOLWD-AVTEC 2.24.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 141
HB141 Fiscal Note-EED-SSA 3.2.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 141
HB 141 Supporting Documents-Letters of Support 3.4.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 141
HB079 ver D CS workdraft.pdf HL&C 3/6/2017 3:15:00 PM
HB 79
HB141 Fiscal Note-UA-SYSBRA 3.6.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 141
HB079 Supporting Documents Index 3.5.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 79
HB079 Supporting Documents-Letters of Opposition 3.5.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 79
HB079 Summary of Changes ver A to ver D 3.6.17.pdf HL&C 3/6/2017 3:15:00 PM
HB 79