Legislature(2017 - 2018)ADAMS ROOM 519

03/27/2018 01:30 PM FINANCE

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Audio Topic
01:34:26 PM Start
01:35:58 PM Confirmation: Commissioner, Department of Revenue: Sheldon Fisher
02:25:09 PM HB233
03:10:34 PM HB303
04:01:18 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearing: Commissioner Sheldon TELECONFERENCED
Fisher, Dept. of Revenue
-- Public Testimony --
+ HB 233 EDUCATION TAX CREDITS; SUNSET; REPEALS TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 303 WORKERS' COMP; REHAB/REEMPLOYMENT TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 27, 2018                                                                                            
                         1:34 p.m.                                                                                              
                                                                                                                                
1:34:26 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:34 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Sheldon   Fisher,  Commissioner,   Department  of   Revenue;                                                                    
Representative Chris  Tuck, Sponsor; Kendra  Kloster, Staff,                                                                    
Representative   Chris  Tuck;   Ken  Alper,   Director,  Tax                                                                    
Division,  Department  of  Revenue;  Marie  Marx,  Director,                                                                    
Worker's  Compensation, Department  of  Labor and  Workforce                                                                    
Development;  Heidi  Drygas,   Commissioner,  Department  of                                                                    
Labor  and  Workforce Development;  Representative  Charisse                                                                    
Millett.                                                                                                                        
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Susan Foley,  President, University  of AK  Foundation; Doug                                                                    
Walrath,  Northwest  Alaska  Career  and  Technical  Center;                                                                    
Tommy   Sheridan,  Silver   Bay  Seafoods,   Cordova;  Karen                                                                    
Matthias,  Council Of  Alaska Producers,  Anchorage; Bradley                                                                    
Moran, Dean,  College of Fisheries  and Ocean  Science, UAF,                                                                    
Fairbanks;  Greta  Schuerth,  Alaska   Red  Dog  Mine,  NANA                                                                    
Regional,  Anchorage; Kayla  Kade,  Self, Anchorage;  Debbie                                                                    
Even,  Self, Anchorage;  Cynthia  Bradley, Self,  Anchorage;                                                                    
Gretchen  Cusack,  Alaska  Integrated  Care  Actions,  Eagle                                                                    
River; Greg Weaver, Self, Knik.                                                                                                 
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 233      EDUCATION TAX CREDITS; SUNSET; REPEALS                                                                              
                                                                                                                                
            HB 233 was HEARD and HELD in committee for                                                                          
            further consideration.                                                                                              
                                                                                                                                
HB 303      WORKERS' COMP; REHAB/REEMPLOYMENT                                                                                   
                                                                                                                                
            HB 303 was HEARD and HELD in committee for                                                                          
            further consideration.                                                                                              
                                                                                                                                
^CONFIRMATION: COMMISSIONER, DEPARTMENT  OF REVENUE: SHELDON                                                                  
FISHER                                                                                                                        
                                                                                                                                
1:35:58 PM                                                                                                                    
                                                                                                                                
SHELDON   FISHER,  COMMISSIONER,   DEPARTMENT  OF   REVENUE,                                                                    
currently served as the  commissioner designee. He explained                                                                    
that  within  the  Department of  Administration  (DOA)  the                                                                    
department looked at how it  could save money for the state.                                                                    
The  department was  in the  process of  implementing shared                                                                    
services.  The  department   also  consolidated  information                                                                    
technology  services.  The   department  also  attempted  to                                                                    
provide resources  across the state. One  example within the                                                                    
Division  of Motor  Vehicles was  to streamline  things such                                                                    
that  the  wait  time  across the  state  had  improved,  on                                                                    
average  by  13  minutes.  He   visited  the  topic  of  the                                                                    
Department  of Revenue  (DOR). He  expressed concerns  about                                                                    
the fiscal  uncertainty in the  state. He thought  the first                                                                    
step in that direction was to  use a Percent of Market Value                                                                    
(POMV). He  was a strong  supporter of a rational  POMV plan                                                                    
however, he understood  that a POMV structure  was only part                                                                    
of  the fiscal  solution and  that  it would  not close  the                                                                    
fiscal  gap.  He though  that  state  needed to  expand  its                                                                    
revenue sources.  He believed part  of the problem  was that                                                                    
the state was too dependent  of. He thought more consistency                                                                    
was  needed for  businesses. He  hoped to  help with  making                                                                    
rational decisions easier.                                                                                                      
                                                                                                                                
Representative Wilson  wondered whether a tax  would rise to                                                                    
a  level  that  would  have  a  "less  negative  impact"  on                                                                    
constituents.                                                                                                                   
                                                                                                                                
Commissioner Fisher  understood her  question to  be related                                                                    
to whether  there was a  certain type  of tax that  would be                                                                    
preferable,  because  of  the revenue  received  versus  the                                                                    
impact on the economy.                                                                                                          
                                                                                                                                
Representative Wilson responded, "Yes."                                                                                         
                                                                                                                                
Commissioner Fisher stated  that he did not  have a specific                                                                    
recommendation.  He felt  that various  taxes had  different                                                                    
characteristics,  and  impacted  different segments  of  the                                                                    
economy and  populous. He  remarked that  there could  be an                                                                    
effort to tax  non-citizen groups. He noted  that there were                                                                    
some places  where the non-resident worker  or visitor would                                                                    
pay  a different  tax. He  remarked  that each  tax had  its                                                                    
merits and  challenges. He  stated that he  did not  come to                                                                    
the discussion with a recommendation for a preferred tax.                                                                       
                                                                                                                                
Representative  Wilson   queried  the  process.   She  asked                                                                    
whether there  was a study  or information to  better inform                                                                    
the legislature  of the  impact of all  types of  taxes. She                                                                    
felt that  she did not  always receive the  information that                                                                    
could  be justified  on the  impact  of whether  or not  the                                                                    
money would  slow the  economy enough  to receive  less that                                                                    
the projection.                                                                                                                 
                                                                                                                                
1:45:36 PM                                                                                                                    
                                                                                                                                
Commissioner Fisher shared that  there was a special session                                                                    
that had a bill related to  a wage tax. The information from                                                                    
about that  wage tax included contrasting  information about                                                                    
a few  different kinds of  taxes. He agreed to  have further                                                                    
discussions about providing more information.                                                                                   
                                                                                                                                
Representative Wilson responded that on  the flip side, as a                                                                    
resource  based state,  she wondered  if the  administration                                                                    
had  looked   at  other  resources   from  which   to  draw,                                                                    
especially related  to the  Department of  Natural Resources                                                                    
(DNR).                                                                                                                          
                                                                                                                                
Commissioner Fisher asked her to rephrase her question.                                                                         
                                                                                                                                
Representative  Wilson   noted  that  there  was   always  a                                                                    
discussion about  how to receive  more money  from Alaskans,                                                                    
because Alaska had more resources  than any other state. She                                                                    
remarked  that DNR  was in  charge  of the  majority of  the                                                                    
state's resources, so she wondered  how DOR was coordinating                                                                    
with that department to utilize resources.                                                                                      
                                                                                                                                
Commissioner  Fisher  responded   that  administration.  had                                                                    
spent  time  considering  the  tax  policy  of  the  various                                                                    
sectors. He stated  that there was probably  less time taken                                                                    
to  examine  the  economic development  strategy  for  those                                                                    
sectors, and agreed to further examine that strategy.                                                                           
                                                                                                                                
Representative  Wilson  responded,  "That would  be  a  nice                                                                    
change. Thank you."                                                                                                             
                                                                                                                                
Vice-Chair Gara  recalled a memo  from Ken  Alper, Director,                                                                    
Tax  Division, Department  of Revenue,  that said  that that                                                                    
the state  received no production  taxes on the  average new                                                                    
fields at  prices below $73  per barrel. He  queried comment                                                                    
on that assertion.                                                                                                              
                                                                                                                                
Commissioner Fisher  replied that  he was not  familiar with                                                                    
the referenced memo, and had  not deeply examined the issue.                                                                    
He believed that the correct next  step for the state was to                                                                    
broaden  the  tax base.  He  felt  that the  question  about                                                                    
revisiting  the  current  oil  and  gas  tax  regime  was  a                                                                    
frequent question. He  stated that his goal was  to pursue a                                                                    
process where  the question was  addressed in a  manner that                                                                    
would be fair  to both the state and the  oil companies; and                                                                    
could provide  a sense of  confidence to both  entities, and                                                                    
provide a long-term solution.                                                                                                   
                                                                                                                                
Vice-Chair Gara  remarked that  for new  oil in  the average                                                                    
North Slope  field paid  no production  tax at  prices below                                                                    
$73 per barrel.  He remarked that there would be  new oil in                                                                    
Alaska National Wildlife Refuge  (ANWR), and the state would                                                                    
receive no  production tax on  oil below $73 per  barrel for                                                                    
seven  years. He  asked whether  that was  a reasonable  tax                                                                    
policy.                                                                                                                         
                                                                                                                                
Commissioner Fisher replied that  he had not deeply examined                                                                    
the issue,  so he  was uncomfortable providing  a statement.                                                                    
He  would rather  pursue  a process  to  examine the  entire                                                                    
regime in  a thoughtful  way that would  result in  a regime                                                                    
that was fair and sustainable for the state and industry.                                                                       
                                                                                                                                
1:51:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara would provide  Commissioner Fisher the memo.                                                                    
He remarked  that the two  most unstable oil taxes  were the                                                                    
ones that were  too high and the ones that  were too low. He                                                                    
felt that  the current  tax regime  was too  low, so  it was                                                                    
unstable. He recalled  a study that stated  that by reducing                                                                    
the capital  budget by  $300 million,  the state  would lose                                                                    
approximately 4500 jobs.                                                                                                        
                                                                                                                                
Commissioner    Fisher   responded    that   it    was   his                                                                    
understanding.                                                                                                                  
                                                                                                                                
Vice-Chair  Gara  asserted  that   one  of  the  impacts  of                                                                    
declaring no  new taxes  might be  the continued  job losses                                                                    
from budget cuts and budget reductions.                                                                                         
                                                                                                                                
Commissioner  Fisher  replied  that the  administration  had                                                                    
supported a more sustainable capital  budget. He stated that                                                                    
the  governor's  budget was  a  multi-year  budget that  was                                                                    
intended to  address deferred maintenance. He  remarked that                                                                    
choosing deferred maintenance was  because it impacted every                                                                    
community,  so it  would be  broadly distributed  across the                                                                    
state. He noted that it  did not increase the "footprint" of                                                                    
the state,  instead it was  maintaining the  current assets.                                                                    
He  noted   that,  unlike   some  mega   projects,  deferred                                                                    
maintenance  was often  performed  by  local businesses.  He                                                                    
remarked that  the proposal was  supported by a  broad based                                                                    
tax. He  felt that it  was an important opportunity  for the                                                                    
state to expand its economic base.                                                                                              
                                                                                                                                
Vice-Chair Gara had additional questions but would wait.                                                                        
                                                                                                                                
1:54:27 PM                                                                                                                    
                                                                                                                                
Representative  Grenn requested  involvement in  the genesis                                                                    
of the  idea an process related  to the creation of  the oil                                                                    
tax bonding bill.                                                                                                               
                                                                                                                                
Commissioner Fisher  replied that  he agreed to  provide the                                                                    
governor with  a set of  alternatives that might be  able to                                                                    
address  the  concern about  the  taxes.  He felt  that  the                                                                    
governor wanted  to find a solution  that provided certainty                                                                    
to the  industry, so they  could receive their payment  in a                                                                    
timely fashion and  go back to work. He  remarked that there                                                                    
were   various  resources   and  expertise   in  determining                                                                    
financial instruments and  the ways to pay off  the debt. He                                                                    
remarked  that  there  was  initially   a  hope  to  provide                                                                    
multiple  solutions,  but it  was  concluded  that the  only                                                                    
prudent solution was  the proposal. He noted  that the other                                                                    
considered funds  had associated concerns. He  remarked that                                                                    
it was a fairly large "chunk"  of money, so it was too large                                                                    
a  percentage of  the overall  fund to  satisfy the  prudent                                                                    
investment rule.                                                                                                                
                                                                                                                                
1:57:15 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki  complimented the  commissioner  on                                                                    
his  efforts   regarding  shared  services.  He   posed  the                                                                    
question about  whether it was  the year to purchase  a snow                                                                    
machine  or  a  new  washer  and dryer.  He  asked  for  his                                                                    
feedback regarding the size of the state operating budget.                                                                      
                                                                                                                                
Commissioner Fisher replied that he  liked to put the budget                                                                    
into categories:  formula programs; life and  health safety;                                                                    
education; and the other departments.  He shared that people                                                                    
often thought about government in  terms of the departments.                                                                    
He  remarked that  there was  an  idea that  there was  much                                                                    
opportunity  to continue  to reduce  costs.  He stated  that                                                                    
most of  those departments,  on a UGF  basis, had  cuts from                                                                    
between 30 percent and 40  percent; and a combination of UGF                                                                    
and DGF  basis was closer  to a cut  of 25 percent.  He felt                                                                    
that  there was  always an  opportunity for  improvement and                                                                    
efficiency, but  felt that  the declining  department budget                                                                    
provided  a   declining  opportunity  for   improvement.  He                                                                    
remarked that DOR had various  groups within the department.                                                                    
He felt  that, for example,  cutting the tax  division would                                                                    
result in a loss of  revenue. He remarked that the Permanent                                                                    
Fund  Division was  working toward  more online  filings, so                                                                    
there was  an opportunity  to save  money. He  stressed that                                                                    
improvements  usually   required  cost  to  the   state.  He                                                                    
remarked that  there was  a sense  among Alaskans  to devote                                                                    
more attention to  health and safety. He  felt that Alaskans                                                                    
wanted  to see  a  better  outcome for  the  money spent  on                                                                    
education, and remarked  that there was not  a strong desire                                                                    
to decrease  education funding.  He felt  that there  was an                                                                    
opportunity  for some  interesting strategies  around health                                                                    
care.  He  encouraged  the legislature  to  examine  how  to                                                                    
improve health care costs.                                                                                                      
                                                                                                                                
2:03:29 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg complimented  Commissioner Fisher                                                                    
for his  efforts within the  Division of Motor  Vehicles. He                                                                    
wondered whether other efficiencies  had been implemented or                                                                    
considered for the rural areas of the state.                                                                                    
                                                                                                                                
Commissioner Fisher  suggested that  the state had  tried to                                                                    
improve  efficiencies. He  agreed  that there  was room  for                                                                    
improvements in  some areas.  He remarked  that the  DOA had                                                                    
gone  through  a  process of  streamlining  the  leasing  of                                                                    
property. He  noted that there  was a  substantial reduction                                                                    
of the time to turn around a lease.                                                                                             
                                                                                                                                
2:09:09 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg noted  that there  was a  feeling                                                                    
that the  sense was  "behind the  curve on  the technology",                                                                    
and delivering broadband. He was  waiting for a vision to be                                                                    
outlined,  other  than  putting   more  effort  into  fixing                                                                    
computers and  printers. He remarked  that the state  had an                                                                    
antiquated  telecommunication infrastructure.  He felt  that                                                                    
the  issue was  about  moving the  state  into tomorrow.  He                                                                    
remarked that the state had not responded adequately.                                                                           
                                                                                                                                
Commissioner Fisher  wondered whether the  antiquated remark                                                                    
referred  to the  network  of the  state  government or  the                                                                    
telecommunication infrastructure of Alaska.                                                                                     
                                                                                                                                
Representative  Guttenberg responded  that he  was referring                                                                    
to both systems separately and together.                                                                                        
                                                                                                                                
Commissioner Fisher  responded that  he felt that  the state                                                                    
government's network was not  severely antiquated. He shared                                                                    
that there  was a rebuilding  recently of the  core network.                                                                    
He  remarked that  the  effort was  done  without a  capital                                                                    
appropriation,  because  the  cost savings  were  structured                                                                    
within  the   project.  The  vender  provided   a  financing                                                                    
instrument  to purchase  the equipment.  He understood  that                                                                    
the state network  was not "cutting edge", but  felt that it                                                                    
was not an  antiquated system. There were  efforts to ensure                                                                    
that   the  system   was  functional   and  up-to-date.   He                                                                    
understood that the  system within the state as  a whole was                                                                    
struggling to delivering adequate  broadband services to all                                                                    
the communities.  He remarked that  the large  challenge was                                                                    
the middle  mile. He noted that  the last mile was  the weak                                                                    
link in most jurisdictions, but  in Alaska it was the middle                                                                    
mile.  He  noted  that  much of  rural  America  had  highly                                                                    
dispersed populations,  so it was  difficult to  deliver the                                                                    
last mile.  He remarked that  Alaska had villages  that were                                                                    
relatively  densely  population in  a  location,  but was  a                                                                    
large distance from the next  village. Therefore, there were                                                                    
not broad  rural communities like  the rest of  the country.                                                                    
He  shared that  there was  a  broadband task  force, and  a                                                                    
number of people from the  industry had conversations on the                                                                    
subject. He remarked that there  was a high amount of money,                                                                    
in the excess of $1 billion  to build and improve the middle                                                                    
mile  network. He  shared that  there was  a question  about                                                                    
whether there  was a better  way to use the  money currently                                                                    
spent on telecommunications.                                                                                                    
                                                                                                                                
Co-Chair Foster indicated Co-Chair  Seaton comments would be                                                                    
the last.                                                                                                                       
                                                                                                                                
Co-Chair  Seaton wanted  to further  discuss  oil taxes.  He                                                                    
mentioned worldwide consulting.                                                                                                 
                                                                                                                                
2:18:14 PM                                                                                                                    
                                                                                                                                
Commissioner  Fisher guessed  that  noted that  there was  a                                                                    
range within  the averages  of different  jurisdictions with                                                                    
different  cost structures,  and the  division of  the share                                                                    
depending on the  cost structure. The right  solution was to                                                                    
broaden  the state's  tax structure.  He  believed that  the                                                                    
state budget would require additional revenue.                                                                                  
                                                                                                                                
Co-Chair Seaton  wondered whether  there was  an appropriate                                                                    
level in the tax credits, and  whether there was a desire to                                                                    
have the current deficits with the tax amount.                                                                                  
                                                                                                                                
Commissioner  Fisher   was  not   prepared  to   answer  the                                                                    
question.  He  would want  to  engage  in another  level  of                                                                    
analysis before he commented on the regime.                                                                                     
                                                                                                                                
2:22:48 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:23:22 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster recommended  that Commissioner  Fisher name                                                                    
be forwarded to the full  body for confirmation. There being                                                                    
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
2:23:54 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:24:38 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 233                                                                                                            
                                                                                                                                
     "An  Act  relating  to   the  insurance  tax  education                                                                    
     credit,  the income  tax education  credit, the  oil or                                                                    
     gas  producer   education  credit,  the   property  tax                                                                    
     education   credit,  the   mining  business   education                                                                    
     credit,  the fisheries  business education  credit, and                                                                    
     the  fisheries resource  landing tax  education credit;                                                                    
     providing  for  an  effective  date  by  repealing  the                                                                    
     effective dates of  secs. 3, 5, 7, 10, 14,  16, 18, 21,                                                                    
     23, 25,  28, 30, 32,  35, 37, 39,  42, 44, 46,  49, 51,                                                                    
     53, and  55, ch. 92,  SLA 2010,  sec. 14, ch.  7, FSSLA                                                                    
     2011, secs.  15, 17, 19,  21, 23,  and 25, ch.  74, SLA                                                                    
     2012, sec. 49, ch. 14, SLA  2014, secs. 37, 40, 43, and                                                                    
     46, ch. 15, SLA 2014, and  secs. 26 and 31, ch. 61, SLA                                                                    
     2014; providing  for an effective date  by amending the                                                                    
     effective  date of  secs. 1,  2,  and 21,  ch. 61,  SLA                                                                    
     2014; and providing for an effective date."                                                                                
                                                                                                                                
2:25:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   CHRIS   TUCK,   SPONSOR,   introduced   the                                                                    
PowerPoint presentation, "House Bill 233 Education Tax                                                                          
Credits" (copy on file). He thanked the committee.                                                                              
                                                                                                                                
KENDRA KLOSTER, STAFF, REPRESENTATIVE CHRIS TUCK, provided                                                                      
a history of the Education Tax Credit on slide 2,                                                                               
"Education Tax Credit":                                                                                                         
                                                                                                                                
     1987:  Education   Tax  Credit  (ETC)   established  to                                                                    
     encourage   private  businesses   to  make   charitable                                                                    
     contributions  to Alaska  educational institutions  and                                                                    
     facilities                                                                                                                 
                                                                                                                                
     2010:   Credit   increased   from  50%   to   100%   on                                                                    
     contributions   between   $101-$300k;  maximum   annual                                                                    
     credit expanded from $150k to $5 million (SB236)                                                                           
                                                                                                                                
     2011  and  2014:  List  of  institutions  and  programs                                                                    
     eligible  for   donation  were   expanded;  eligibility                                                                    
     varies by tax-type (SB84 and HB278)                                                                                        
                                                                                                                                
     2014: ETC  sunset established for  Dec 2018 as  part of                                                                    
     newly                                                                                                                      
     established Indirect Expenditure Report (HB306)                                                                            
                                                                                                                                
Ms. Kloster reviewed what the bill did on slide 3,                                                                              
"Education Tax Credit":                                                                                                         
                                                                                                                                
     HB233 extends the effective date  for the repeal of the                                                                    
     education  tax  credits  from   December  31,  2018  to                                                                    
     January 1, 2025.                                                                                                           
                                                                                                                                
     Ensures that  the credit that  exists in  statute today                                                                    
     will be  maintained until January  1, 2025,  instead of                                                                    
     narrowing in  scope and decreasing in  value on January                                                                    
     1, 2021.                                                                                                                   
                                                                                                                                
Ms. Kloster continued to slide 4, "Education Tax Credit":                                                                       
                                                                                                                                
     Today,  there are  many opportunities  to make  private                                                                    
     donations  to a  variety  of educational  institutions,                                                                    
     facilities and programs                                                                                                    
     However,  there are  specific eligibility  requirements                                                                    
     for both organizations and tax type                                                                                        
                                                                                                                                
     Selection of eligible entities:                                                                                            
                                                                                                                                
          Non-profit, public or private accredited Alaska                                                                       
          two-year or four-year colleges                                                                                        
                                                                                                                                
          Non-profit elementary or secondary schools and                                                                        
          school districts                                                                                                      
                                                                                                                                
          State operated vocational education and training                                                                      
          schools                                                                                                               
          Non-profit regional vocational training centers                                                                       
                                                                                                                                
          Apprenticeship programs                                                                                               
                                                                                                                                
          Alaska higher education investment fund                                                                               
                                                                                                                                
          Postsecondary institutions providing dual-credit                                                                      
          courses                                                                                                               
                                                                                                                                
Ms. Kloster further discussed the credit on slide 5,                                                                            
"Education Tax Credit":                                                                                                         
                                                                                                                                
     Non-transferable,  non-refundable credit  that a  donor                                                                    
     can apply against the following  categories of State of                                                                    
     Alaska   taxes.   The    use   and   deductibility   of                                                                    
     contributions varies by tax type:                                                                                          
                                                                                                                                
          Corporate Income Tax                                                                                                  
                                                                                                                                
          Fisheries Business Tax / Fisheries Resource                                                                           
          Landing Tax                                                                                                           
                                                                                                                                
          Insurance Premium Tax / Title Insurance Premium                                                                       
          Tax                                                                                                                   
                                                                                                                                
          Mining License Tax                                                                                                    
                                                                                                                                
          Oil and Gas Production Tax                                                                                            
                                                                                                                                
          Oil and Gas Property Tax                                                                                              
                                                                                                                                
     General Credit Provisions:                                                                                                 
                                                                                                                                
          50 percent of annual contributions up to $100,000                                                                     
                                                                                                                                
          100 percent of the next $200,000                                                                                      
                                                                                                                                
          50 percent of annual contributions beyond                                                                             
          $300,000                                                                                                              
                                                                                                                                
          Total annual credit per taxpayer, across all tax                                                                      
          types not-to-exceed $5 million                                                                                        
                                                                                                                                
Ms. Kloster detailed why Education Tax Credits are                                                                              
important on slide 6, "Why Are ETC Important?":                                                                                 
                                                                                                                                
     ETC allows a need to be filled directly.                                                                                   
                                                                                                                                
     Encourages private industry to partner with education                                                                      
     institutions, creating more opportunity in our state.                                                                      
                                                                                                                                
     Expanding our educational programs to provide more                                                                         
     opportunities for our students.                                                                                            
                                                                                                                                
     Training our future workforce for Alaskan jobs.                                                                            
                                                                                                                                
2:30:12 PM                                                                                                                    
                                                                                                                                
Ms.  Kloster  discussed  slide 7,  "Benefits  to  Education:                                                                    
Summary  of   2015."  She  indicated  that   Mr.  Alper  was                                                                    
available  to answer  any  detailed  information. The  chart                                                                    
showed  what was  coming  into the  state's  system. It  was                                                                    
money that  the state  was seeing  going into  the education                                                                    
system.                                                                                                                         
                                                                                                                                
Ms.  Kloster  moved  to slide  8,  "Benefits  to  Education:                                                                    
Summary of CY 2017 - Alaska Education Credits."                                                                                 
                                                                                                                                
Ms. Kloster  reviewed the  industry investment  in education                                                                    
on slide 9, "Industry Investment in Education":                                                                                 
                                                                                                                                
     In 2000,  members of the At-Sea  Processors Association                                                                    
     began making  private contributions to  support student                                                                    
     fellowships   and  to   fund  sustainable   oceans  and                                                                    
     fisheries research                                                                                                         
                                                                                                                                
     Association   members  established   the  Ted   Stevens                                                                    
     Professorship of Marine Policy                                                                                             
                                                                                                                                
     UA  and  the  At-Sea  Processors  created  the  Pollock                                                                    
     Conservation   Cooperative   Research  Center   (PCCRC)                                                                    
     within the  College of Fisheries and  Ocean Sciences at                                                                    
     UAF                                                                                                                        
                                                                                                                                
     The  PCCRC  has  put  over   $20  million  into  marine                                                                    
     research and  education since 2000, the  largest single                                                                    
     contributor  to marine  research at  the University  of                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
     The  work done  over the  years has  had an  impact far                                                                    
     beyond  what  the  University could  have  accomplished                                                                    
     alone.                                                                                                                     
                                                                                                                                
     Participating   companies    have   included   Trident,                                                                    
     American,  Starbound, Glacier  Fish, Arctic  Storm, and                                                                    
     the Coastal Villages Region Fund                                                                                           
                                                                                                                                
Representative Wilson asked about  the donations and whether                                                                    
they  had  to  be  made  to  Alaska  nonprofits  and  Alaska                                                                    
schools. She  also looked  at page  9, and  wondered whether                                                                    
the student fellowships were required for Alaskans.                                                                             
                                                                                                                                
Ms. Kloster responded  that they must go  to programs within                                                                    
Alaska,  and  benefitted  Alaskans.   She  shared  that  the                                                                    
private industry would give the  donation to the educational                                                                    
program or university;  and that entity would  put it toward                                                                    
their tax.                                                                                                                      
                                                                                                                                
                                                                                                                                
Representative Ortiz returned to slide  2. He wondered if it                                                                    
included  the  ability  to  make  contributions  to  private                                                                    
Alaska education institutions.                                                                                                  
                                                                                                                                
Ms.  Kloster pointed  to  the document  in  the packet  that                                                                    
listed all of the organizations  that received a tax credit,                                                                    
and felt that it would help to explain the eligibility.                                                                         
                                                                                                                                
Co-Chair Seaton  referred to  page 7  and wondered  what the                                                                    
$2.26 million  was directed  toward under  "Corporate Income                                                                    
Tax."                                                                                                                           
                                                                                                                                
Ms. Kloster  responded that the  "other" might refer  to the                                                                    
nonprofits, and deferred to Mr. Alper for more information.                                                                     
                                                                                                                                
2:35:02 PM                                                                                                                    
                                                                                                                                
KEN ALPER,  DIRECTOR, TAX  DIVISION, DEPARTMENT  OF REVENUE,                                                                    
stated that the graph was page  2 of a three-year report. He                                                                    
stated  that DOR  provided a  cover letter,  a table,  and a                                                                    
detailed  list of  recipients. He  stated that  the list  of                                                                    
recipients  contained the  list  of  the so-called  "other."                                                                    
That  "other"  list  consisted of  the  various  nonprofits,                                                                    
watershed partnerships, and anything  that would be eligible                                                                    
to receive the  tax credit donations that were  not either a                                                                    
university  or  vocational  program. He  stressed  that  the                                                                    
education  tax  credits  was  a  rich  area  of  legislative                                                                    
involvement.  The  list  of eligible  entities  had  evolved                                                                    
dramatically  over  the  year.  He  noted  that  there  were                                                                    
several boutique  line items, which  were added  for various                                                                    
reasons.  He stressed  that  the list  was  not the  donors,                                                                    
rather it was the recipients  who received the donations. He                                                                    
shared that those who made  the donations were tax payers of                                                                    
some sort, but that information was confidential.                                                                               
                                                                                                                                
2:37:04 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:37:20 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Guttenberg  asked why Alaska  Business Weekly                                                                    
and Granit Construction were eligible.                                                                                          
                                                                                                                                
Mr. Alper replied  that it did not necessarily  mean the two                                                                    
entities were eligible, it was  not a refundable tax credit.                                                                    
He detailed  that when  a company made  a donation,  DOR did                                                                    
not  know about  it  until  the tax  was  paid  and it  went                                                                    
through the  department's review process. He  guessed it was                                                                    
a  job training  or  apprenticeship program.  He noted  that                                                                    
Senator Click  Bishop had taken  an interest in the  type of                                                                    
program over the years.                                                                                                         
                                                                                                                                
Representative Guttenberg looked forward to the follow up.                                                                      
                                                                                                                                
Representative  Tilton  asked  if   the  entities  were  all                                                                    
Alaska-based.                                                                                                                   
                                                                                                                                
Mr. Alper  answered that the statutory  language stated that                                                                    
there  must  me   an  entity  in  Alaska.   He  guessed  the                                                                    
Smithsonian  had  a  research  project in  Alaska,  but  the                                                                    
recipient was the home office in the Smithsonian.                                                                               
                                                                                                                                
2:40:17 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz  queried   the  amount  of  discussion                                                                    
regarding the  allowance of  public funds  to go  to private                                                                    
institutions,  and the  annual amount  that went  to private                                                                    
institutions.                                                                                                                   
                                                                                                                                
Mr. Alper responded that it  would be in the other category,                                                                    
but  could not  report the  actual amount  by recipient.  He                                                                    
stated that the section was  subsection 1, and believed that                                                                    
it  was the  original language  from the  1980s. He  did not                                                                    
know whether  it had evolved  over the years to  include the                                                                    
reference  to public  or private  entities.  He stated  that                                                                    
there had  been a  dozen or more  amendments over  a thirty-                                                                    
year period                                                                                                                     
                                                                                                                                
Ms. Kloster added that on slide  4 showed a list of eligible                                                                    
entities.                                                                                                                       
                                                                                                                                
2:45:00 PM                                                                                                                    
                                                                                                                                
SUSAN  FOLEY, PRESIDENT,  UNIVERSITY OF  AK FOUNDATION  (via                                                                    
teleconference),  thanked  members  for their  service.  The                                                                    
University   of  Alaska   and  the   University  of   Alaska                                                                    
Foundation  strongly supported  HB  233.  The programs  that                                                                    
received contributions  were not directed or  established by                                                                    
industry.  Regarding  research  opportunities,  often  times                                                                    
research  opportunities  reached  beyond the  scope  of  the                                                                    
donor program. She invited questions.                                                                                           
                                                                                                                                
                                                                                                                                
Co-Chair Seaton  wondered whether the tax  credit for sports                                                                    
tournament should continue.                                                                                                     
                                                                                                                                
Ms. Foley responded in the affirmative.                                                                                         
                                                                                                                                
2:50:06 PM                                                                                                                    
                                                                                                                                
DOUG WALRATH, NORTHWEST ALASKA  CAREER AND TECHNINCAL CENTER                                                                    
(via  teleconference),  spoke in  support  of  the bill.  He                                                                    
stated  that   the  loss  of   federal  funding,   with  the                                                                    
elimination    of   earmarked    appropriations   and    the                                                                    
constriction of stage UGF had  made the education tax credit                                                                    
increasingly  important to  the technical  center operations                                                                    
and programming. The tax  credit contributions accounted for                                                                    
on-third  of its  annual operating  budget.  He stated  that                                                                    
since 2009 it had actively pursued industry partnership.                                                                        
                                                                                                                                
2:53:20 PM                                                                                                                    
                                                                                                                                
TOMMY   SHERIDAN,   SILVER   BAY  SEAFOODS,   CORDOVA   (via                                                                    
teleconference), reported that  Silver Bay Seafoods strongly                                                                    
supported the bill. He read a prepared statement:                                                                               
                                                                                                                                
     Silver  Bay  Seafoods,  LLC (Silver  Bay,  or  SBS)  is                                                                    
     writing  to  support Alaska  House  Bill  233, "An  Act                                                                    
     relating  to the  insurance tax  education credit,  the                                                                    
     income tax  education credit, the  oil or  gas producer                                                                    
     education  credit, the  property tax  education credit,                                                                    
     the  mining business  education  credit, the  fisheries                                                                    
     business education  credit, and the  fisheries resource                                                                    
     landing tax education credit."                                                                                             
                                                                                                                                
     SBS  is a  vertically integrated,  primarily fishermen-                                                                    
     owned processor  of frozen  salmon, herring,  and other                                                                    
     seafoods   products  for   both  domestic   and  export                                                                    
     markets. Silver  Bay began in  2007 as a  single salmon                                                                    
     processing  facility in  Sitka, Alaska,  and has  since                                                                    
     grown  into one  of the  largest seafoods  companies in                                                                    
     Alaska. Silver  Bay has state  of the art,  high volume                                                                    
     processing and  freezing facilities  throughout Alaska,                                                                    
     currently  operating in  Sitka,  Craig, Valdez,  Naknek                                                                    
     and  Metlakatla.  SBS is  dependent  upon  a large  and                                                                    
     diverse  workforce,  the  likes  of which  can  and  do                                                                    
     receive  their  training   through  the  University  of                                                                    
     Alaska  Southeast's (UAS)  School of  Career Education,                                                                    
     which includes  the following programs of  relevance to                                                                    
     Silver   Bay's  operations:   Construction  Technology,                                                                    
     Diesel Technology, Welding, and Fisheries                                                                                  
     Technology.                                                                                                                
                                                                                                                                
     With  regards  to   the  lattermost  program,  industry                                                                    
     funding  made possible  through education  credits have                                                                    
     resulted  in   increased  training   opportunities  for                                                                    
     Alaskan youth. For example, in  fall of 2017 36 Alaskan                                                                    
     high  school  students  took  UAS  courses,  thanks  to                                                                    
     financial   assistance  from   the  At-Sea   Processors                                                                    
     Association  (APA)  and  Goldbelt Inc.  APA  previously                                                                    
     assisted  with  a pilot  UAS  program  in spring  2017,                                                                    
     allowing  13  high  school students  to  complete  four                                                                    
     credits  of  college   coursework.  Goldbelt  Inc.  has                                                                    
     worked  to engage  Juneau-based Alaska  Native students                                                                    
     in  the   sciences,  beginning   with  a   summer  2017                                                                    
     oceanography learning  experience and  culminating with                                                                    
     22  students  taking   an  iPad-based  Introduction  to                                                                    
     Oceanography  class for  University  of Alaska  General                                                                    
     Education credit. Altogether, in  2017 APA and Goldbelt                                                                    
     Inc.  helped  over  50 high  school  students  take  on                                                                    
     university-level  coursework all  over the  state, from                                                                    
     Kodiak,  Juneau, and  Sitka  to  Unalaska, Galena,  and                                                                    
     Petersburg.                                                                                                                
                                                                                                                                
     I   personally   benefitted  from   similar   financial                                                                    
     assistance  several years  ago  as a  student in  UAS's                                                                    
     Fisheries    Technology    Program.   With    financial                                                                    
     assistance  made  possible  by  donations  from  Icicle                                                                    
     Seafoods, I  completed an Undergraduate  Certificate in                                                                    
     Fisheries  Technology  before   going  on  to  complete                                                                    
    graduate-level programs at Oregon State University.                                                                         
                                                                                                                                
     Extension of  the education tax credit  program through                                                                    
     House  Bill  233  will   continue  to  promote  private                                                                    
     investment  in  Alaskan   higher  education,  which  is                                                                    
     essential to  ensuring that  Alaskans learn  the skills                                                                    
     needed to sustain and  grow Alaska's commercial fishing                                                                    
     industry.  Our  thanks  to   you  for  sponsoring  this                                                                    
     important bill.                                                                                                            
                                                                                                                                
2:56:44 PM                                                                                                                    
                                                                                                                                
KAREN MATTHIAS, COUNCIL OF ALASKA PRODUCERS, ANCHORAGE (via                                                                     
teleconference), read a prepared statement:                                                                                     
                                                                                                                                
     The  Council of  Alaska Producers  (CAP) is  writing to                                                                    
     support  Senate  Bill  116, "An  Act  relating  to  the                                                                    
     insurance   tax  education   credit,  the   income  tax                                                                    
     education  credit, the  oil or  gas producer  education                                                                    
     credit, the  property tax education credit,  the mining                                                                    
     business  education  credit,   the  fisheries  business                                                                    
     education  credit, and  the fisheries  resource landing                                                                    
     tax education credit."                                                                                                     
                                                                                                                                
     CAP is  a non-profit  trade association formed  in 1992                                                                    
     to  represent the  interests of  large metal  mines and                                                                    
     mine  developmental  projects  in Alaska.  CAP  informs                                                                    
     members on legislative  and regulatory issues, supports                                                                    
     and  advances the  mining  industry, educates  members,                                                                    
     the media                                                                                                                  
     and the  general public on  mining related  issues, and                                                                    
     promotes   economic  opportunity   and  environmentally                                                                    
     sound mining practices.                                                                                                    
                                                                                                                                
     CAP's members have welcomed  the opportunity to partner                                                                    
     with the  State of Alaska and  provide funding directly                                                                    
     to  Alaska's  higher  education projects  and  programs                                                                    
     that support  and enhance the mining  industry. Between                                                                    
     2011  and 2017,  mining companies  in Alaska  education                                                                    
     tax credit program to invest  $19.6 million in programs                                                                    
     such as:                                                                                                                   
                                                                                                                                
          .notdef UAF Mining Engineering research endowment                                                                   
      .notdef UAF Mining Engineering scholarship fund                                                                         
          .notdef UAA Geology Scholarships                                                                                    
          .notdef Mining and Petroleum Training Services (MAPTS),                                                             
          UAF Cooperative Extension Services, Anchorage,                                                                        
          Soldotna, Juneau                                                                                                      
          .notdef UAS Pathways to Mining                                                                                      
          .notdef UAA Institute of Social and Economic Research                                                               
     .notdef Northwest Arctic Borough School District                                                                         
          .notdef Angoon High School Vocational Technical program                                                             
                                                                                                                                
     MAPTS  and  the  Pathways program  provide  educational                                                                    
     opportunities and  training that lead directly  to good                                                                    
     jobs  in   the  industry.   The  importance   of  these                                                                    
     educational and  training programs is underscored  by a                                                                    
     survey  of  Alaska's  mining workforce  which  revealed                                                                    
     that there is considerable  aging of skilled employees;                                                                    
     for example,  47.1 percent  of mechanics,  51.1 percent                                                                    
     of  mining  materials  engineers and  65.4  percent  of                                                                    
     mining machine operators are 45  years of age or older.                                                                    
     Faced  with  the  challenges  of  attrition  and  aging                                                                    
     within the current workforce,  and competition from the                                                                    
     global  mining industry,  the mining  industry embarked                                                                    
     on  a  workforce  development  planning  process  which                                                                    
     resulted  in the  Alaska  Mining Workforce  Development                                                                    
     Plan.                                                                                                                      
                                                                                                                                
     SB116 extends  the education tax  credit program  so it                                                                    
     will continue  to promote private investment  in higher                                                                    
     education  in  our  state, an  essential  component  of                                                                    
     realizing  the  objective  of  ensuring  that  Alaskans                                                                    
     learn the  skills needed to  sustain and  grow Alaska's                                                                    
     mining industry.                                                                                                           
                                                                                                                                
     Thank you  for sponsoring  this bill.  We hope  that it                                                                    
     will be scheduled soon for a hearing in the                                                                                
     Labor and Commerce Committee.                                                                                              
                                                                                                                                
2:59:32 PM                                                                                                                    
                                                                                                                                
BRADLEY  MORAN,   DEAN,  COLLEGE  OF  FISHERIES   AND  OCEAN                                                                    
SCIENCE,  UAF,  FAIRBANKS  (via  teleconference),  spoke  in                                                                    
support of  the legislation. He  noted that his  college had                                                                    
utilized the  education tax credit  for nearly  twenty years                                                                    
with  great benefit  with over  $25 million  in support  for                                                                    
research,  scholarship, fellowships,  and outreach  funding.                                                                    
He thanked  the legislators who  had worked to  continue the                                                                    
program for the benefit of the university and the state.                                                                        
                                                                                                                                
Vice-Chair Gara asked if his school was a non-profit.                                                                           
                                                                                                                                
Mr. Moran responded in the affirmative.                                                                                         
                                                                                                                                
Vice-Chair  Gara asked  if contributions  to the  university                                                                    
treated as nonprofit contributions.                                                                                             
                                                                                                                                
Mr. Moran  replied that the  contributions went  through the                                                                    
University Foundation.                                                                                                          
                                                                                                                                
Vice-Chair Gara  noted that  a company  would get  a federal                                                                    
tax  deduction for  donating. He  wondered whether  the same                                                                    
amount of money would not  come in, even without the smaller                                                                    
state tax credit.                                                                                                               
                                                                                                                                
Mr.  Moran replied  that he  was not  an expert  in the  tax                                                                    
laws. He stated that through  the tax credit, it allowed for                                                                    
the corporations to invest in the college.                                                                                      
                                                                                                                                
Representative  Thompson  queried  the amount  of  leveraged                                                                    
federal grant money.                                                                                                            
                                                                                                                                
Mr. Moran  responded that in  FY 17, the college  brought in                                                                    
approximately $43  million in  federal research  dollars. He                                                                    
furthered  that  a  large  portion of  that  money  was  the                                                                    
operation   of  the   research  vessels   operated  in   the                                                                    
university.                                                                                                                     
                                                                                                                                
Representative Thompson  asked if it  was a 50/50  match, or                                                                    
whether there was more leverage.                                                                                                
                                                                                                                                
Mr. Moran responded that it was not a 50/50 match.                                                                              
                                                                                                                                
Co-Chair Foster OPENED Public Testimony                                                                                         
                                                                                                                                
3:04:49 PM                                                                                                                    
                                                                                                                                
GRETA  SCHUERTH,   ALASKA  RED  DOG  MINE,   NANA  REGIONAL,                                                                    
ANCHORAGE  (via  teleconference),  spoke  in  favor  of  the                                                                    
legislation.  She  stated  that multiple  Nana  subsidiaries                                                                    
provided support  services to the mine  operations providing                                                                    
many jobs to the Nana shareholders and other Alaskans.                                                                          
                                                                                                                                
Representative Wilson  asked how many Alaskans  were able to                                                                    
get education assistance.                                                                                                       
                                                                                                                                
Ms. Schuerth agreed to provide that information.                                                                                
                                                                                                                                
Co-Chair Foster CLOSED Public Testimony.                                                                                        
                                                                                                                                
Co-Chair Foster indicated amendments  were due in his office                                                                    
by Thursday at 5:00 PM.                                                                                                         
                                                                                                                                
HB  233  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 303                                                                                                            
                                                                                                                                
     "An Act relating to workers' compensation benefits for                                                                     
     the rehabilitation and reemployment of injured                                                                             
     employees."                                                                                                                
                                                                                                                                
3:10:34 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED  to ADOPT  proposed  committee                                                                    
substitute  for HB  303,  Work  Draft (30-GH2709\J,  Wallace                                                                    
3/16/18). There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
3:12:11 PM                                                                                                                    
                                                                                                                                
MARIE MARX,  DIRECTOR, WORKER'S COMPENSATION,  DEPARTMENT OF                                                                    
LABOR AND WORKFORCE DEVELOPMENT,  there was only one change.                                                                    
It  inserted  language  that  the  one-year  time  limit  on                                                                    
benefits paid before parties agreed to a training plan.                                                                         
                                                                                                                                
3:13:32 PM                                                                                                                    
                                                                                                                                
HEIDI   DRYGAS,  COMMISSIONER,   DEPARTMENT  OF   LABOR  AND                                                                    
WORKFORCE  DEVELOPMENT,  introduced  herself  and  indicated                                                                    
that Ms. Marx would review the presentation.                                                                                    
                                                                                                                                
Ms.   Marx    introduced   the    PowerPoint   presentation:                                                                    
"Workers' Compensation Reemployment Benefits: HB303,House F                                                                     
inance Committee March 22, 2018" (copy on file).                                                                                
                                                                                                                                
Ms. Marx slide 2: "What is Worker's Compensation?"                                                                              
                                                                                                                                
     A system of insurance that protects workers and employ                                                                     
     ers from some of the losses caused by on-the-job accide                                                                    
     nts and job-related illnesses.                                                                                             
                                                                                                                                
Ms. Marx slide 3: "The Grand Bargain."                                                                                          
                                                                                                                                
    An employer provides prompt, necessary medical and                                                                          
    wage loss benefits to an injured worker for a work                                                                          
     related injury.                                                                                                            
                                                                                                                                
     In exchange, the injured worker receives limited                                                                           
   benefits and gives up the right to sue the employer.                                                                         
                                                                                                                                
Ms. Marx slide 4: "Mission."                                                                                                    
                                                                                                                                
     To ensure the quick, efficient, fair and predictable                                                                       
     delivery of indemnity, medical, and vocational                                                                             
     rehabilitation benefits to injured workers at a reason                                                                     
     able cost to employers                                                                                                     
                                                                                                                                
Ms. Marx slide 5: "Benefits Provided."                                                                                          
                                                                                                                                
     ?Medical Care                                                                                                              
     ?Indemnity (Wage Loss) Benefits                                                                                            
     ?Death Benefits                                                                                                            
     ?Reemployment (Retraining) Benefits                                                                                        
                                                                                                                                
Ms. Marx reviewed slide 6: "Reemployment Benefits."                                                                             
                                                                                                                                
     Intended to return an injured worker to work when the                                                                      
     worker cannot return to the job of injury or to jobs                                                                       
     for which the worker has relevant training or experien                                                                     
     ce.                                                                                                                        
                                                                                                                                
Ms. Marx  moved to  slide 11: "Alaska  Reemployment Benefits                                                                    
Flow Chart:  Current Law."  She stressed  that the  bill did                                                                    
not address  instances where an  injured worker  returned to                                                                    
work  and received  medical  care.  The retraining  benefits                                                                    
were related to  situations where an injured  worker was off                                                                    
work for at  least 90 consecutive days, and  a doctor opined                                                                    
that they could  not return to their job of  injury or other                                                                    
relevant jobs.                                                                                                                  
                                                                                                                                
3:15:23 PM                                                                                                                    
                                                                                                                                
Ms. Marx explained  that the bill was  introduced because of                                                                    
current  challenges. She  reviewed a  list of  challenges on                                                                    
slide 7: "Current Challenges." She read the slide:                                                                              
                                                                                                                                
     ?Mandatory reemployment benefits eligibility                                                                               
     evaluations                                                                                                                
     ?Maximum plan cost of $13,300                                                                                              
    ?Retraining plans focus on quickest return to work                                                                          
     option,                                                                                                                    
    regardless of worker's interest in that vocational                                                                          
     goal                                                                                                                       
     ?Declining pool of rehabilitation specialists                                                                              
     ?No rehabilitation specialist fee schedule                                                                                 
                                                                                                                                
Ms. Marx  reviewed the benefits  of HB  303 on slide  8: "HB                                                                    
303." She read the slide:                                                                                                       
                                                                                                                                
    ?Improves the delivery of reemployment benefits to                                                                          
     injured  workers                                                                                                           
     ?Provides eligible employees with more choices in                                                                          
     reemployment goals and plans                                                                                               
    ?Encourages injured employees' early return to work                                                                         
     ?Helps employers control costs                                                                                             
                                                                                                                                
3:17:55 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg queried  the number of individuals                                                                    
who were hurt on the job and not eligible.                                                                                      
                                                                                                                                
Ms. Marx  explained that one  of the provisions of  the bill                                                                    
would  no   longer  permit  an  injured   worker  to  settle                                                                    
reemployment benefits  with their employer. She  stated that                                                                    
the following slides showed the  statistics about the policy                                                                    
call.                                                                                                                           
                                                                                                                                
Ms.  Marx   pointed  to  slide  9:   "Reemployment  Benefits                                                                    
Eligibility Statistics FY 17."                                                                                                  
                                                                                                                                
     ?564injured workers were referred for a reemployment                                                                       
     benefits eligibility evaluation                                                                                            
     ?148injured workers were determined eligible                                                                               
     for reemployment benefits                                                                                                  
     ?14injured workers completed reemployment plans                                                                            
                                                                                                                                
Ms.  Marx   turned  to  slide  10:   "Reemployment  Benefits                                                                    
Settlement Statistics FY 17."                                                                                                   
                                                                                                                                
     164injured workers settled reemployment benefits                                                                           
                                                                                                                                
     48        of those injured workers settled reemployment                                                                    
     benefits before an eligibility determination was  made                                                                     
                                                                                                                                
     80       of those injured workers settled reemployment                                                                     
     benefits before completing a retraining plan                                                                               
                                                                                                                                
     36       of those injured workers settled reemployment                                                                     
     benefits after being found ineligible for benefit                                                                          
                                                                                                                                
3:22:00 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg asked about  the change. He wanted                                                                    
to  understand  that  instead  of the  money  going  to  the                                                                    
individual it would go to the  school. He noted that much of                                                                    
the controversy was that the  injured worker needed money to                                                                    
pay their mortgages.  The person took the  benefit money but                                                                    
did not use the money for its intended use. .                                                                                   
                                                                                                                                
Ms.  Marx explained  that  it allowed  an  injury worker  to                                                                    
receive the benefit.                                                                                                            
                                                                                                                                
Representative Guttenberg  wanted to  confirm that  the lump                                                                    
sum would not be paid to an individual.                                                                                         
                                                                                                                                
3:26:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED Public Testimony.                                                                                        
                                                                                                                                
3:26:59 PM                                                                                                                    
                                                                                                                                
KAYLA  KADE, SELF,  ANCHORAGE  (via  teleconference), was  a                                                                    
vocational  rehabilitation  specialist.  She did  not  agree                                                                    
with some of  the current regulations in place.  She did not                                                                    
agree with paying an individual lump sum.                                                                                       
                                                                                                                                
3:31:04 PM                                                                                                                    
                                                                                                                                
DEBBIE EVEN, SELF, ANCHORAGE  (via teleconference), spoke in                                                                    
opposition  of the  bill. She  disagreed with  the provision                                                                    
that did not allow for a lump sum to be distributed.                                                                            
                                                                                                                                
Representative Wilson asked if Ms.  Even would getting a sum                                                                    
of money plus help with schooling.                                                                                              
                                                                                                                                
Ms.  Evan  decided  to  settle  with  Worker's  Compensation                                                                    
because of the time frame.                                                                                                      
                                                                                                                                
3:33:05 PM                                                                                                                    
                                                                                                                                
CYNTHIA  BRADLEY,  SELF,   ANCHORAGE  (via  teleconference),                                                                    
opposed the legislation.  She was injured on the  job at the                                                                    
end of 2011.  She settled her claim. She  disagreed with the                                                                    
statistic provided  by the department.  She received  a lump                                                                    
sum settlement.  She indicated she  had been making  $50 per                                                                    
hour at the  job where she was injured. She  was trained for                                                                    
a job where she only made $18.                                                                                                  
                                                                                                                                
3:37:25 PM                                                                                                                    
                                                                                                                                
GRETCHEN  CUSACK,  ALASKA  INTEGRATED  CARE  ACTIONS,  EAGLE                                                                    
RIVER  (via teleconference),  opposed  HB  303. She  relayed                                                                    
that there  were many misconceptions.  She provided  some of                                                                    
her  background  and  was  well-versed  in  the  field.  She                                                                    
appreciated a couple of the changes.                                                                                            
                                                                                                                                
Co-Chair Foster encouraged additional testimony.                                                                                
                                                                                                                                
3:44:22 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked how much  it took for  a worker                                                                    
to have a plan made up and to follow through to succession.                                                                     
                                                                                                                                
Ms. Cusack thought  it would be difficult to  say because of                                                                    
several factors. Plans could range  from $3000 to $20,000. A                                                                    
person  needed  to  be  medically   stable.  She  asked  the                                                                    
committee to be aware of the complexity of each case.                                                                           
                                                                                                                                
3:46:05 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  asked whether  all rehabilitation                                                                    
specialists were  the same. He  asked how to set  the rates.                                                                    
He wondered if it was by plan or qualifications.                                                                                
                                                                                                                                
Commissioner  Drygas  responded  that the  specialists  were                                                                    
required  to  have master's  degrees.  She  stated that  the                                                                    
department  could receive  different reports  from different                                                                    
specialists.                                                                                                                    
                                                                                                                                
Ms.  Marx  responded  that  one of  the  things  the  system                                                                    
struggles  with was  that a  specialist might  not meet  the                                                                    
statutory  requirement. Ultimately  both  would reach  plans                                                                    
within the statutory requirements.                                                                                              
                                                                                                                                
Representative Guttenberg  wondered whether the  payment was                                                                    
because of the billed appointments.                                                                                             
                                                                                                                                
Ms. Marx responded in the affirmative.                                                                                          
                                                                                                                                
3:50:50 PM                                                                                                                    
                                                                                                                                
GREG WEAVER,  SELF, KNIK (via teleconference),  indicated he                                                                    
had been an injured worker.  He provided a background of his                                                                    
injury.  He  spoke  about  a huge  black  hole  in  Worker's                                                                    
Compensation. He  provided details about his  experience. He                                                                    
continued   to  provide   information   about  is   personal                                                                    
experience. He wanted people in  Alaska that were injured on                                                                    
the job to be treated fairly.                                                                                                   
                                                                                                                                
Co-Chair Foster CLOSED Public Testimony.                                                                                        
                                                                                                                                
Co-Chair Foster relayed that amendments  were due by Friday,                                                                    
March 30, 2018 at 5:00 PM.                                                                                                      
                                                                                                                                
Representative  Wilson wondered  whether  there  could be  a                                                                    
delay in the  amendment deadline, because she  did not fully                                                                    
understand the legislation.                                                                                                     
                                                                                                                                
Co-Chair Foster relayed that he would hold off on the                                                                           
amendment deadline.                                                                                                             
                                                                                                                                
Commissioner  Drygas thanked  those  that  testified on  the                                                                    
bill and indicated that it  was difficult to find a balance.                                                                    
She wanted to see workers  back in the workforce rather than                                                                    
drawing on public assistance.                                                                                                   
                                                                                                                                
Co-Chair Foster reviewed the agenda for the following                                                                           
meeting.                                                                                                                        
                                                                                                                                
HB 303 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
4:01:18 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:01 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 233 Education Tax Credit Support Letter Sitnasuak 2018.pdf HFIN 3/27/2018 1:30:00 PM
HB 233
HB233 Additional Documents - DOR Education Tax Credit Report CY2017. 2.28.18.pdf HFIN 3/27/2018 1:30:00 PM
HB 233
HB233 Additional Documents - FY2012-FY2016 Education Tax Credits 2.28.18.pdf HFIN 3/27/2018 1:30:00 PM
HB 233
HB233 Sectional Analysis.pdf HFIN 3/27/2018 1:30:00 PM
HB 233
HB233 Sponsor Statement 2.28.18.pdf HFIN 3/27/2018 1:30:00 PM
HB 233
HB233 Supporting Documents - Support Letters 2.28.18.pdf HFIN 3/27/2018 1:30:00 PM
HB 233
HB 303 Letters of opposition 3.23.18.pdf HFIN 3/27/2018 1:30:00 PM
HB 303
HB233 Edu Tax Credit Presentation 3.26.18.pdf HFIN 3/27/2018 1:30:00 PM
HB 233
HB 303 - Letter of Opposition - 3.27.18.pdf HFIN 3/27/2018 1:30:00 PM
HB 303
3.18 NANA Teck HB 233 Testimony.pdf HFIN 3/27/2018 1:30:00 PM
HB 233