Legislature(2021 - 2022)BARNES 124
03/17/2021 05:45 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB100 | |
| HB121 | |
| HB45 | |
| HB100 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 100 | TELECONFERENCED | |
| *+ | HB 133 | TELECONFERENCED | |
| *+ | HB 121 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 45 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 17, 2021
5:47 p.m.
DRAFT
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage
Representative Liz Snyder (via teleconference)
Representative David Nelson
Representative James Kaufman
Representative Ken McCarty (via teleconference)
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 100
"An Act relating to allocations of funding for the Alaska
Workforce Investment Board; and providing for an effective
date."
- MOVED HB 100 OUT OF COMMITTEE
HOUSE BILL NO. 121
"An Act relating to education tax credits for certain payments
and contributions for child care and child care facilities; and
providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 45
"An Act relating to presumption of compensability for workers'
compensation claims related to contagious diseases; and
providing for an effective date."
- MOVED CSHB 45(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 100
SHORT TITLE: EXTEND WORKFORCE INVEST BOARD ALLOCATIONS
SPONSOR(s): REPRESENTATIVE(s) WOOL
02/18/21 (H) READ THE FIRST TIME - REFERRALS
02/18/21 (H) L&C, FIN
03/15/21 (H) L&C AT 6:30 PM BARNES 124
03/15/21 (H) Heard & Held
03/15/21 (H) MINUTE(L&C)
03/17/21 (H) L&C AT 5:45 PM BARNES 124
BILL: HB 121
SHORT TITLE: EDUC.TAX CREDIT: EMPLOYER CHILD CARE COST
SPONSOR(s): REPRESENTATIVE(s) FIELDS
03/03/21 (H) READ THE FIRST TIME - REFERRALS
03/03/21 (H) L&C, FIN
03/17/21 (H) L&C AT 5:45 PM BARNES 124
BILL: HB 45
SHORT TITLE: WORKERS' COMP. AND CONTAGIOUS DISEASES
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
02/18/21 (H) PREFILE RELEASED 1/8/21
02/18/21 (H) READ THE FIRST TIME - REFERRALS
02/18/21 (H) L&C, FIN
03/05/21 (H) L&C AT 3:15 PM BARNES 124
03/05/21 (H) Heard & Held
03/05/21 (H) MINUTE(L&C)
03/15/21 (H) L&C AT 6:30 PM BARNES 124
03/15/21 (H) Heard & Held
03/15/21 (H) MINUTE(L&C)
03/17/21 (H) L&C AT 5:45 PM BARNES 124
WITNESS REGISTER
BRYAN CRISP, Fire Chief
Nikiski Fire Department
Nikiski, Alaska
POSITION STATEMENT: Testified in support of HB 100.
JAY STINSON, President
The Alaska Research Consortium
Kodiak, Alaska
POSITION STATEMENT: Testified in support of HB 100.
CHRIS GUNDERSON, CEO
Denali Family Services
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 100.
KATHERINE MITCHELL, Member
Homer Marine Trades Association
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 100.
LUCINDA MARTIN, Member
Homer Marines Trade Association
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 100.
JEFF JESSEE, Dean
College of Health
University of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 100.
DOUG WALRATH, Director
Northwestern Alaska Career and Technical Center (NACTC)
Nome, Alaska
POSITION STATEMENT: Testified in support of HB 100.
MARK ZEISET, Member
Homer Marines Trade Association
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 100.
TOM BRICE
University of Alaska Fairbanks (UAF) Alumni Association
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 100.
ASHLEY CARRICK, Staff
Representative Adam Wool
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
100 on behalf of Representative Wool, prime sponsor.
REPRESENTATIVE ADAM WOOL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, answered questions during
the hearing on HB 100.
GREG CASHEN, Assistant Director
Alaska Workforce Investment Board
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
100.
STEPHANIE BERGLUND, CEO
Thread Alaska
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 121, offered a
PowerPoint presentation about Thread Alaska.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
121.
NICOLE REYNOLDS, Deputy Director
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
121.
TRISTAN WALSH, Staff
Representative Zack Fields
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
121 on behalf of Representative Fields, prime sponsor.
EMILY NAUMAN, Legislative Legal Counsel
Legislative Legal and Research Services
Legislative Affairs Agency (LAA)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
121.
ELISE SORUM-BIRK, Staff
Representative Andy Josephson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
45 on behalf of Representative Josephson, prime sponsor.
ACTION NARRATIVE
5:47:29 PM
CO-CHAIR FIELDS called the House Labor and Commerce Standing
Committee meeting to order at 5:47 p.m. Representatives Fields,
Spohnholz, Nelson, McCarty (via teleconference), and Snyder (via
teleconference) were present at the call to order.
Representatives Kaufman and Schrage arrived as the meeting was
in progress.
HB 100-EXTEND WORKFORCE INVEST BOARD ALLOCATIONS
5:47:58 PM
CO-CHAIR FIELDS announced that the first order of business would
be HOUSE BILL NO. 100, "An Act relating to allocations of
funding for the Alaska Workforce Investment Board; and providing
for an effective date."
5:48:12 PM
CO-CHAIR FIELDS opened public testimony on HB 100.
5:48:23 PM
BRYAN CRISP, Fire Chief, Nikiski Fire Department, shared that he
supports the reauthorization of Technical Vocation Education
Program (TVEP) funding. The Kenai Peninsula College benefits
from that funding, particularly its paramedic program, he
explained. The Nikiski Fire Department currently employees 21
people who were educated through this paramedic program.
Without this program, he continued, it would be very difficult
to find qualified employees in the area for the fire department.
He emphasized the importance of recruiting paramedics within
Alaska, which would require that the state provide accessible
and adequate education and training to interested individuals.
5:50:21 PM
JAY STINSON, President, Alaska Research Consortium, explained
that the Alaska Research Consortium (ARC) is a nonprofit that
advocates for sustainable fisheries, marine science, and
Alaska's "blue economy." He noted that the seafood industry is
Alaska's largest private employer, with over 60,000 employees.
Seafood is Alaska's number one manufacturing employer, he
continued, and contributes more that $162 million in taxes. He
said that ARC recently completed an 18-month study on the
workforce training needs of the Alaska seafood processing
industry, surveying over 46 seafood plant managers and 3 catcher
processer companies and encompassing 24 companies based in 25
communities and representing over 15,000 workers. He shared
that 88 percent of the survey participants responded that
additional training for seafood workers would be helpful for
business. Regarding HB 100 specifically, he noted that
annually, seafood workers contribute about $600,000 to the
state's TVEP fund but shared his understanding that very little
of these funds are used to benefit seafood workers. He stated
that ARC supports the reauthorization of TVEP funding but
emphasized that ARC would like the funds to be balanced in a way
that supports the seafood industry.
5:54:54 PM
CHRIS GUNDERSON, CEO, Denali Family Services, stated his support
of HB 100 and the reauthorization of TVEP funding. He shared
that Denali Family Services (DFS) benefits from this funding
through a partnership with the University of Alaska Anchorage
(UAA). Specifically, he added, this funding supports the
recreational therapist position shared jointly through UAA and
DFS. He said that this position provides guidance and support
to the Trailblazers program under DFS, which is a wilderness
therapy program for individuals aged 13 to 21 who experience
psychiatric disability. He explained that it provides human
support through connection with the Alaska wilderness, as well
as teaching practical outdoor skills and wilderness survival
skills. He highlighted that youth in this program have
experienced improved physical fitness, decreased psychiatric
disturbance, and increased self-confidence. He concluded by
asking the committee to support HB 100 to enable the continued
partnership of UAA and DFS and the work to support Alaska's
youth.
5:57:06 PM
CO-CHAIR SPOHNHOLZ asked Mr. Gunderson to describe how the
partnership works between DFS and UAA.
MR. GUNDERSON responded that the [recreational therapist]
position is partially based on loan on a non-pay basis at DFS,
and the individual provides guidance and technical support. He
emphasized that all of the TVEP funds are distributed to UAA to
support the position, and as part of the duties of the position,
the employee is outposted to DFS to support the Trailblazers
program.
CO-CHAIR SPOHNHOLZ thanked Mr. Gunderson for the work DFS is
doing to help youth in Alaska.
5:58:14 PM
KATHERINE MITCHELL, Member, Homer Marine Trades Association,
shared that she is speaking in favor of the marine training
coordinator position at Kenai Peninsula College (KPC) in Homer.
She said that KPC has been lucky to have a marine coordinator
and that it has made a huge difference. She explained that KPC
has been able to teach specialized classes in the marine trades
and that there have been over 30 young people who have gotten
jobs due to this education. She concluded that she supports HB
100 and supports the continuation of the marine training classes
in Alaska.
6:00:09 PM
LUCINDA MARTIN, Member, Homer Marines Trade Association, stated
that the Homer Marines Trade Association supports HB 100. She
emphasized that the association supports the reauthorization of
TVEP funds primarily for UAA and the support of the continuation
of the workforce development coordinator at KPC. She
highlighted that the coordinator has made a significant impact
by increasing job readiness levels for students of the marine
trades at the college. She illustrated this by sharing that
over the last 18 months, 30 to 40 students have earned
certifications in the marine trades, which equates to
employability and increased wages. She said that the need for
employees in the marine trades industry is significant,
particularly as seasoned workers begin to retire. She explained
that it is important to educate workers of all ages in order to
find quality employment for these workers as soon as possible.
She concluded that this education makes a significant impact on
the Homer community and the fishing industry statewide, and
stated that she hopes the committee will support the
reauthorization of TVEP funds.
6:02:35 PM
JEFF JESSEE, Dean, College of Health, University of Alaska,
noted that he also serves as Vice Provost for Health Programs at
UAA. He shared that Alaska has a "tremendous" health workforce
shortage and that many customers have to hire travelers to fill
important health care positions. He emphasized that TVEP is a
critical component in funding university health care programs,
and that the funds help support UAA's nursing expansion,
physical therapy, and dietetics and nutrition, as well as help
purchase important materials such as mannequins for simulations.
He pointed to the significant education budget reductions as a
reason why TVEP funding is even more critical for UAA. He
concluded by urging the committee's support of HB 100.
6:04:06 PM
CO-CHAIR FIELDS asked what the average wait time is for admitted
students into the nursing program.
MR. JESSEE responded that it can be up to a couple of years.
The students are ranked based off of grade point averages (GPAs)
and test scores, so some students get in right away and others
may have to wait some time.
CO-CHAIR FIELDS asked how many students have been admitted to
the program but couldn't attend due to limited capacity.
MR. JESSEE responded that the program has approximately two to
three times the applicants that the program has the capacity
for.
CO-CHAIR FIELDS asked if the capacity increased and all
applicants were able to attend, to what extent that would limit
the need to hire travelers to come to Alaska and fill healthcare
positions.
MR. JESSEE responded that Alaska would be pretty close [to not
needing travelers].
6:05:12 PM
REPRESENTATIVE KAUFMAN asked what the graduation rate is for
students in the program.
MR. JESSEE replied that the program graduates 90 percent of
students and that student success is a high priority.
6:05:39 PM
REPRESENTATIVE NELSON asked if the 90 percent graduation rate is
due to the fact that students with higher GPAs are admitted into
the program quickly and do not have to wait as long to join.
MR. JESSEE responded that the program admits highly qualified
students, but also UAA employs highly skilled faculty and has
advanced facilities, such as the simulation center which allows
student nurses to practice procedures in a safe environment. He
stated that there is a systemwide commitment to student success.
6:06:44 PM
REPRESENTATIVE KAUFMAN asked what the average age is of the
typical applicant to the program.
MR. JESSEE responded that he would have to check, but guessed
that it is in the mid-20s.
6:07:04 PM
REPRESENTATIVE MCCARTY asked about Mr. Jessee's understanding of
the challenges for nurses who are entering the workforce.
MR. JESSEE responded that student nurses have to pass the
National Council Licensure Examination (NCLEX) upon graduation.
He shared that a high percentage of graduates do pass that exam,
and many student nurses already have job offers before
graduation because they have done clinicals in health care
facilities and have made connections. He emphasized that even
if a student doesn't pass the first time, that student will pass
eventually and will definitely become employed.
REPRESENTATIVE MCCARTY asked for clarification that Mr. Jessee
is saying that a high percentage of students pass the NCLEX the
first time and enter into the workforce.
MR. JESSEE responded yes, consistently over 85 percent of
students pass on their first attempt. However, COVID-19 has had
an impact on that success rate because it has been difficult to
provide health programs during the pandemic, he explained.
6:08:41 PM
CO-CHAIR SPOHNHOLZ opined that the nursing training program is a
great example of a public/private partnership where the training
is done in partnership with health care organizations across the
state. She asked if Mr. Jessee could share with the committee
how many education sites across the state provide nursing
education.
MR. JESSEE responded that UAA has 14 outreach sites throughout
Alaska. Additionally, there is a "pop-up" program in
Petersburg, Alaska, and while there is not a campus there, the
hospital sponsors students and provides the facilities for
instructors to teach local students through the nursing program.
He explained that many of the major hospitals also provide
substantial financial support to the program, and these
contributions are dependent upon how many graduates the program
produces.
6:10:34 PM
DOUG WALRATH, Director, Northwestern Alaska Career and Technical
Center (NACTC), shared that NACTC focuses training on Alaska's
priority industries, the main five being health care,
construction, transportation, hospitality/tourism, and seafood
harvesting and processing. He shared that Norton Sound Health
Corporation (NSHC) is the largest regional employer and health
care is a significant priority for NACTC. He continued that
NSHC partners with NACTC to provide dual-credit high school
courses, such as introduction to health careers and emergency
trauma training. He shared that TVEP funding supports health
care education with advanced technical training for high school
students, which transitions these students immediately into
employment as certified nurse aides, village health aides, and
in the future, personal care attendants. He added that TVEP
funding would also support a large project near Nome at Graphite
Creek, which has been designated a high priority infrastructure
project by the federal government. The creek is the largest
known graphite deposit in the United States, he explained, and
would have application for electric vehicles and lithium-ion
batteries of all types. He reiterated that TVEP funding would
support the training required for this project. In addition,
the driver education training in Nome would be supported by TVEP
funding. He shared that the Division of Motor Vehicles (DMV)
office in Nome shut down a few years ago, and so NACTC applied
to become a third-party DMV affiliated driving school so that it
can educate and train commercial drivers. He restated NACTC's
support of HB 100.
6:13:12 PM
MARK ZEISET, Member, Homer Marines Trade Association, stated
that he supports HB 100 and shared that the Homer Marines Trade
Association has seen high school students in Homer attend the
marine technology classes and, in some cases, these students
have been able to enter directly into the workforce. He shared
that there are other cases where students who are already
employed are able to get promoted due to the education received
from the classes.
6:14:29 PM
TOM BRICE, University of Alaska Fairbanks (UAF) Alumni
Association, recalled that the UAF Alumni Association met with
members of the committee in February 2021 and wanted to follow
up on that meeting. On behalf of the UAF Alumni Association's
Legislative Advocacy Committee, he expressed his support of HB
100. The proposed bill would continue the Technical Vocation
Education program for another three years, which he opined is a
program that greatly benefits Alaskans since its inception in
2000. Due to the university's crucial role in training Alaska's
workforce, he continued, it has received a large portion of TVEP
funds in the past and this helps the university system support a
number of important industries in the state, like maritime and
health care. He stated that the reauthorization of TVEP funds
would allow the universities across Alaska to continue to
educate Alaska's workforce and keep Alaskans employed.
6:16:51 PM
CO-CHAIR FIELDS, after ascertaining that there was no one else
who wished to testify, closed public testimony on HB 100.
6:17:19 PM
REPRESENTATIVE MCCARTY said he believes in the TVEP program. He
asked about the efficacy of the allocations of the funds and if
a different allocation or a different duration of the program
should be considered. He shared his understanding of an example
in Delta Junction, Alaska, where the average participant seemed
to receive $80,000, but stated that it appears that the number
should be $8,000 annually.
6:18:56 PM
ASHLEY CARRICK, Staff, Representative Adam Wool, Alaska State
Legislature, on behalf of Representative Wool, prime sponsor of
HB 100, noted that the figure that Representative McCarty
referenced on the TVEP Annual Report [included in the committee
packet] for Partners for Progress in Delta Junction referred to
participants having a median income earning of $80,000 after 1
to 12 months of employment. She stated that that figure does
seem anomalous and that she did follow up with the Department of
Labor and Workforce Development (DLWD) to ask about that number.
She shared that DLWD initially also thought that it might be a
typo, but after extensive investigation by the department's
Research Analysis Division and by the individuals who compiled
the TVEP report, it was determined that the number was not
inaccurate. She said that it is important to note that many
students entering this program already have extensive technical
training. She explained that it is difficult to compare TVEP
recipients on any metrics because TVEP funds are distributed
differently depending on the recipient, and some receive a
disproportionate amount compared to others. The funds are
distributed to these recipients, but do not necessarily
represent all of the funding given to TVEP recipients. She
added that it is also worth noting that the TVEP report states
that the average median income for Ilisagvik College graduates
is $49,000 annually, and this is reflective of being in a rural
community with a high average wage. She reiterated that this is
not necessarily a useful metric by which to compare recipients.
6:21:33 PM
CO-CHAIR SPOHNHOLZ noted that the TVEP Annual Report shows that
the Amundsen Educational Center had an average cost per pupil of
almost $12,000. She asked if someone could describe why the
cost is so high.
6:22:06 PM
REPRESENTATIVE ADAM WOOL, Alaska State Legislature, as prime
sponsor of HB 100, addressed the question from Co-Chair
Spohnholz and responded that he can look at the amount of money
that the program received and how many graduates there were and
"do the division," which he stated he imagines is what Co-Chair
Spohnholz did to get the cost per pupil. He said that 11
students served at $249,000 at the Amundsen Educational Center.
He explained that he hasn't talked to anyone at the center, but
thinks that it is similar to the situation in Delta Junction.
He added that the Delta Junction Partners for Progress had a low
sample number of students to determine the numbers seen in the
report, and reiterated that many of these students already have
extensive technical training, which can warp the median annual
earning figure as these individuals are at a higher earning
level when they enter the program.
CO-CHAIR SPOHNHOLZ asked if anyone from DLWD would be able to
answer her question. She shared the math that she did on each
of the programs and noted that the Amundsen Educational Center
is an outlier.
6:24:17 PM
GREG CASHEN, Assistant Director, Grants, Alaska Workforce
Investment Board, Office of the Commissioner, Department of
Labor & Workforce Development, provided clarification that [the
department's Research & Analysis staff] compiled data that is
provided by each of the regional training centers to arrive at
the numbers presented on the TVEP report. He explained that
Amundsen is a small training center, and instructors cost the
same if they are teaching a small number of students as they
would if these instructors were teaching a large number of
students. He said that the department could investigate it to
see if there is any more important information to glean, and he
could share that information with the committee. He reiterated
that the training center is very small, and said that he thinks
the center primarily teaches office technology, and that the
type of training that the center provides should be viewable in
the report.
6:25:40 PM
CO-CHAIR SPOHNHOLZ opined that it's important for TVEP to get
reauthorized for a longer period of time for the purpose of
fiscal stability and certainty for organizations. She shared
her understanding that it's important to look at the return on
investment of TVEP funds in various communities, and noted that
she feels very strongly that the committee [should not] suggest
that rural communities are the same as urban communities. There
are higher costs in rural communities and there are good reasons
for that, she opined, and she thinks that the rural way of life
in these communities should be preserved. She expressed her
concern that some of these rural programs have a cost that is
"six times higher" than other programs, when many of these less
expensive programs are also effective at delivering training
throughout the state. She said that UAA promotes workforce
development programs successfully across the state and has seen
its percentage of TVEP funds decline in a way that she thinks
undermines the state's ability to train and develop workers.
She concluded that she supports HB 100, but said that the
Amundsen Education Center deserves more investigation.
6:27:09 PM
REPRESENTATIVE MCCARTY stated that he concurs with Co-Chair
Spohnholz. He said that he understands that there are a lot of
variables to consider, but doesn't think that the variables are
matching well, and that there is more information needed to
understand those variables. He restated that he supports the
TVEP program, but said that he suggests that the committee
reduce the duration of the reauthorization of the funds from
three years to one or two years.
6:28:06 PM
REPRESENTATIVE KAUFMAN questioned if the committee would like to
pass HB 100 with the proposed time period that would reauthorize
the TVEP funds until 2024. He considered that there may be
other opportunities, some of which are fleeting, to address
certain needs that would not be able to be addressed should the
reauthorization be "locked in" for that duration. He echoed
Representative McCarty's thoughts and suggested that the
committee consider a shorter reauthorization duration in order
to be able to respond more quickly and to further investigate
the committee's questions.
6:28:56 PM
CO-CHAIR FIELDS commented that he will not support a shorter
reauthorization. He offered the example of NACTC in Nome, which
cannot hire and retain high quality staff if there is only a
one-year authorization and replacement revenue is not available.
He shared his understanding that when considering Alaska's rural
facilities, that kind of uncertainty would devastate the
program.
6:29:35 PM
The committee took an at-ease from 6:29 p.m. to 6:32 p.m.
[During the at-ease, Co-Chair Fields passed the gavel to Co-
Chair Spohnholz.]
HB 121-EDUC.TAX CREDIT: EMPLOYER CHILD CARE COST
6:32:27 PM
CO-CHAIR SPOHNHOLZ announced that the next order of business
would be HOUSE BILL NO. 121, "An Act relating to education tax
credits for certain payments and contributions for child care
and child care facilities; and providing for an effective date."
6:32:54 PM
CO-CHAIR FIELDS, as prime sponsor, introduced HB 121. He stated
that the intent of the proposed bill is to offer a corporate tax
credit to employers who offer child care on premises or through
a stipend to employees. He shared that he had heard good things
about oil company BP offering child care on site, which brought
about the idea for the proposed bill. He noted that when Alaska
State Representatives Sara Rasmussen and Chris Tuck chaired the
Children's Caucus during the Thirty-First Alaska State
Legislature in 2020, there were a variety of discussions about
what could be done to improve child care and improve retention
of skilled workers in Alaska, and the idea for HB 121 came out
of those discussions.
CO-CHAIR FIELDS offered a PowerPoint presentation entitled,
"House Bill 121," and began on slide 2. He explained that many
companies might be eligible for this tax credit from a wide
range of industries. He moved to slide 3, which highlights the
issues HB 121 seeks to address and read as follows [original
punctuation provided]:
-Recognizes the urgent need for better access to child
care in the State of Alaska.
-Covid-19 pandemic laid bare the lack of access for
child care for many, and the impacts on working
families.
-HB 121 works to build off of the existing education
tax credit to help foster child care facilities and
incentivize access to child care.
-Would allow employers to deduct credits against
existing Alaska taxes, including for their own child
care facility or a stipend to send employee's child to
existing child care center.
CO-CHAIR FIELDS noted that as a country, "we have moved
backward" in terms of women participating in the workforce,
driven in part by the COVID-19 pandemic. Parents have had to
make difficult decisions, he continued, in order to find a
solution for child care during the pandemic. He shared that
there was a time during the pandemic where all of the lost jobs
in the United States were "women's jobs," which he said was due
to the tough decisions that parents had to make regarding child
care.
6:35:07 PM
CO-CHAIR FIELDS proceeded to slide 4, "Women suffer
disproportionate impacts from lack of child care access, con't,"
which depicted a graph of employment fluctuations in "non-
teleworkable" occupations during 2020. He stated that there
have been significant negative impacts for women with young
children in terms of workforce participation during the
pandemic, and there has not yet been a recovery from that. He
said that child care is key for women with children to have the
option to stay in the workforce.
CO-CHAIR FIELDS shared some statistics on net migration, stating
that although many young adults move to Alaska, many of these
individuals leave the state once they have children. Expanding
the availability of high quality child care would allow Alaska
to retain workers, he continued, and added that it is dangerous
for Alaska to have young families leaving the state. He said
that there are a lot of variables involved in this choice, but
child care is a deciding factor in young families' choice to
leave Alaska. By strengthening child care, he said, Alaska's
economy is strengthened as well.
CO-CHAIR FIELDS proceeded to slide 5, "Child care in Alaska,"
and shared that the child care problems experienced nationally
are particularly acute in Alaska. He opined that anyone who has
tried to find a daycare or hire a nanny knows how hard it is to
find affordable, high quality child care. He said that the
supply for child care in Alaska is not close to matching the
demand that Alaska needs to retain productive, high-earning
families.
6:37:23 PM
CO-CHAIR FIELDS advanced to slide 6, "Access to child care in
Alaska," which depicted some statistics from Thread Alaska
regarding child care. He moved to slide 7, "Access to child
care in Alaska: con't," and explained that the need for child
care in urban areas is acute and that the need in rural areas is
even more acute.
CO-CHAIR FIELDS proceeded to slide 8, "Workforce Participation,"
and explained that when employers can provide and subsidize
child care, it makes it more possible for everyone to
participate in the labor force and spend more money in the local
economy. He restated that there is a disproportionality of the
impacts of the pandemic on women, which can be seen in the
graphs on the slide.
CO-CHAIR FIELDS continued to slide 9, " Access to Child care in
Alaska: McDowell Group Report," and explained that the McDowell
Group conducted an extensive report on the impact of early care
and learning in Alaska. He shared his understanding that this
report made a commendable case that this is an area in which the
state should invest.
CO-CHAIR FIELDS advanced to slide 10, "Employer Provided
Financial Support: McDowell Group Report," and described some of
the benefits of child care provided by an employer, including
the convenience of being able to drop off children at work, the
ability for parents to spend more time with their children at
home, and increased quality of life. He stated that increasing
the availability of child care would make Alaska more of a
destination for "innovative, high-earning workers" and improve
economic development.
CO-CHAIR FIELDS proceeded to slide 11, "Benefits to Employers:
McDowell Group Report," and opined that there is nothing like
high quality child care to persuade young parents to remain at
their jobs. He reiterated that Alaska should give employers
more opportunities to obtain these highly productive employees.
He explained that this would also prevent women leaving the
workforce to take care of children, thereby increasing the
number of women in management positions.
6:40:41 PM
STEPHANIE BERGLUND, CEO, Thread Alaska, shared that Thread is a
35-year-old private, nonprofit that works across the state to
increase access to affordable early care and education, with a
specific focus on child care. She stated that Thread supports
HB 121 and that she intends to share more information about
child care that illustrates the importance of the proposed
legislation. She continued that she has worked in early
childhood sector for 15 years and has yet to meet a family who
has been able to find and utilize child care that operates in a
way that meets the price, access, and quality concerns of the
family. This means that parents have fewer choices when it
comes to child care, and this lack of choice can severely impact
parents' time and productivity. She shared that even working in
the early childhood sector herself, she has lost "great
employees" due to lack of access to child care. She opined that
Alaska needs HB 121 for businesses to be able to support
employees.
6:42:53 PM
MS. BERGLUND began a PowerPoint presentation [hard copy included
in the committee packet]. She drew attention to slide 1, "There
is a need for more supports for child care to support more
families able to work," and explained that the statistics on the
slide were compiled in 2019 and 2020 and represent pre-COVID-19
data. She paraphrased from the slide, and shared the statistic
that more than 88,000 children in 54,000 households are in need
of early childhood learning (ECL) services in Alaska. The
primary benefit of this access as reported by adults in the home
is that it allows the adults in the home to be employed. She
shared that there is a large gap in demand for child care needs,
and that only 60 percent of these houses have access to reliable
child care services.
MS. BERGLUND proceeded to slide 2, "Access to early care &
learning services is becoming increasingly difficult for Alaska
families," and explained that for households with children in
ECL services, 52 percent found it difficult or very difficult to
find services, which is up from 37 percent since 2015. She
shared that COVID-19 has made child care programs even more
fragile than the programs were before. Operating costs have
increased, and revenue has decreased, she said. This is due to
families keeping children home due to safety, or to parents
losing their jobs and no longer needing child care services or
being able to afford it. She shared that while working from
home is an option for some parents, parents have found it
stressful to work and take care of children at the same time.
She predicted that after the pandemic is over, there will be an
increased demand for child care. She stated that HB 121 would
help provide needed support to meet the demand.
6:44:30 PM
MS. BERGLUND moved to slide 3, "Child care is expensive and for
many families not affordable," and said that working families
carry the burden of both paying for and supporting the child
care system. She opined that families should not have to choose
between work and child care. In Alaska, child care costs more
than tuition to a university and costs families 17 percent of
household income on average. For single mothers, the cost is on
average 34 percent of household income. She expressed that HB
121 would help families afford child care and likely allow
businesses to recruit additional employees that these businesses
wouldn't currently be able to employ.
MS. BERGLUND continued to slide 4, "Child care services make a
stable workforce possible," and explained that quality child
care brings families peace of mind and allows parents to be more
dependable and productive at work. She shared that in Alaska,
16 percent of residents are able to participate in the workforce
because of access to child care. This has a large impact on
Alaska's economy as these workers earn $1.9 billion in wages.
However, she opined that this number could be bigger, and said
that 22 percent of households are not working or would like to
work more, but are prevented from working at the household's
preferred capacity due to lack of availability or cost of child
care.
MS. BERGLUND moved to slide 5, "Businesses benefit from
supporting employee child care needs," and explained that more
than just parents benefit from increased access to child care.
Children also benefit and are more prepared when they enter
Kindergarten, making these children more successful in school
and in life. She said that this makes for a more employable and
prepared workforce when these children grow up. When child care
is supported or subsidized by businesses, child care programs
are able to pay the workforce more livable wages and offer
benefits. As a result, she continued, this makes the sector a
stronger and more consistent workforce that generates more in
economic growth. She reported that many Alaska employers
consider themselves to be family friendly, and 8 in 10 working
parents report some support from employers related to child care
needs. This indicates that the tax credit benefit proposed in
HB 121 would be utilized. She shared that employers see better
recruitment and retention of employees with more child care
offered.
MS. BERGLUND continued that as a result of COVID-19, more
employers are aware of the importance of child care. This
conversation has been raised to a new level, she said, which
makes the proposed bill well timed. She concluded that HB 121
would give more options to support employees and ultimately to
support Alaska's economy. The bill would be beneficial for both
employees and employers, and would be a "win-win-win" for
businesses, families, and young children.
6:49:10 PM
REPRESENTATIVE NELSON asked Co-Chair Fields if he could talk
about the potential fiscal impact on the state should HB 121
pass.
CO-CHAIR FIELDS responded that fiscal notes have been submitted
and he deferred the question to testifiers online to explain the
fiscal notes.
6:50:12 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development (DCCED), responded
that the division can't predict how many insurance companies
would take advantage [of the tax credit proposed in the
legislation], but that she can disclose that education tax
credits have not been frequently utilized in Alaska in past
years. She shared that the highest year on record was $150,000
in 2015. She said that in 2016, it was $975, in 2017, it was
$0, in 2018 it was $500, in 2019 it was $5,000, and in 2020 it
was $0. Education tax credits have not been widely used in the
past, she reiterated, but credits might be utilized at a higher
rate for child care. She stated that the division "doesn't have
a handle" on how many companies would use this credit for child
care.
6:51:32 PM
NICOLE REYNOLDS, Deputy Director, Tax Division, Department of
Revenue (DOR), responded that DOR has submitted an indeterminate
fiscal note because it doesn't have specific data to estimate
how many tax payers will claim the expansion of the credit.
Also, it is unclear how many employers currently pay the child
care costs of employees. She stated that DOR can't estimate how
many employers will start paying child care costs or making
donations to child care facilities should this bill pass. She
explained that since this information is not available, DOR
can't give an estimate for the cost. She shared that for
calendar year 2020, the education credit that was claimed as the
statute is written now was about "$4 million across the board"
for all tax types to which it applied.
CO-CHAIR SPOHNHOLZ interjected that the education tax credit
that Ms. Reynolds is referencing currently applies to higher
education as well as Kindergarten through twelfth-grade, and HB
121 would expand the credit down to lower grades.
6:53:22 PM
REPRESENTATIVE NELSON asked Ms. Reynolds if she has an estimate
of the amount of people who utilized the maximum amount of
education credits.
MS. REYNOLDS answered that she doesn't have an estimate but can
get back to the committee with that figure.
CO-CHAIR SPOHNHOLZ shared her understanding that these
individuals mainly work in health care and oil and gas.
6:53:54 PM
REPRESENTATIVE NELSON shared that he is concerned about a
provision in the fiscal note that he understands as meaning that
"a credit for any taxpayer cannot exceed $1 million across all
tax types." He explained that he is fearful of the cost impact
of this provision on the state. He asked Ms. Reynolds how many
people hit the upper limit for educational credits.
MS. REYNOLDS responded that DOR would look into that and get
back to him.
CO-CHAIR SPOHNHOLZ added that to her knowledge, there are only a
few employers in Alaska that offer child care benefits to
employees.
6:55:01 PM
REPRESENTATIVE SNYDER directed attention to a statistic on slide
4 of Ms. Berglund's presentation, "Child care services make a
stable workforce possible," which read as follows [original
punctuation provided]:
16% of Alaska's residents can participate in the
workforce because of ECL services, earning a higher
income and enjoying a higher standard of living.
REPRESENTATIVE SNYDER asked Ms. Berglund if the 16 percent
figure is applicable to Alaska residents at any given time.
MS. BERGLUND responded yes, the data was collected in 2019 by
the McDowell Group through a representative sample household
survey across the state.
REPRESENTATIVE SNYDER asked if it would be fair to assume that
while the survey found that 16 percent of residents at any time
are benefiting from ECL services, it could potentially become a
much higher percentage of Alaska residents that would be able to
benefit.
MS. BERGLUND replied yes, that is a safe assumption. She added
that 16 percent is a consistent number and DOR has seen those
numbers stay consistent over the years. She directed attention
to another statistic on slide 4, which read as follows [original
punctuation provided]:
1 in 5, or 22%, of Alaska's residents cannot fully
participate in the labor force due to the cost,
availability, or quality of ECL services.
MS. BERGLUND explained that Alaska residents want to be
participating in the workforce with more access.
6:57:57 PM
CO-CHAIR SPOHNHOLZ shared her understanding that the reason the
16 percent figure is so low is because it only represents the
precise moment in time that a child is young enough to qualify
for ECL.
6:58:18 PM
REPRESENTATIVE KAUFMAN asked Ms. Berglund if all of the numbers
in her presentation are Alaska-based statistics.
MS. BERGLUND responded yes, it is specific data collected by the
McDowell Group in 2019 and 2020 on Alaskans. She reiterated
that these numbers came from the survey the McDowell Group
conducted in addition to labor and demographic statistics.
REPRESENTATIVE KAUFMAN asked if that information is available
online.
MS. BERGLUND replied that DOR just provided an update in the
last month and she would follow up to ensure the committee has
that information.
6:59:47 PM
TRISTAN WALSH, Staff, Representative Zack Fields, Alaska State
Legislature, on behalf of Representative Fields, prime sponsor
of HB 121, shared that there is a link on the final page of Co-
Chair Fields' presentation that leads to the McDowell Group
report. He said that he can ensure that committee members have
access to the link.
7:00:07 PM
REPRESENTATIVE SCHRAGE asked if the employer child care benefit
provided to a parent has to be a cash payment or whether it
could be a voucher, a stipend, or something similar.
7:00:33 PM
EMILY NAUMAN, Legislative Legal Counsel, Legislative Legal and
Research Services, Legislative Affairs Agency (LAA), shared that
HB 121 simply refers to a payment and is not specific as to
whether it would have to be a cash payment. She said that it
would depend on the interpretation by DOR, but that she doesn't
see a reason why it would be interpreted by DOR in a way that
doesn't include a stipend.
7:01:01 PM
REPRESENTATIVE SCHRAGE asked if there is anything to prevent an
employer from reclassifying regular wages already paid to
employees as child care support in order to write off those
wages.
7:01:27 PM
MS. REYNOLDS responded that DOR would need to implement some
regulations to clarify which types of contributions qualify for
the credit. She pointed out that there is no language in the
bill that would limit the qualifying contribution to those
incurred in Alaska or for Alaska child care facilities. She
stated that DOR would like to see an amendment that reflects
that stipulation to ensure that it is clear in statute that
contributions need to be for Alaska child care facilities.
7:03:18 PM
CO-CHAIR FIELDS provided clarification that the intent of the
proposed bill is to support both onsite child care and child
care provided through a stipend. He shared his understanding
that it should be easy to verify whether an employee is
receiving a child care stipend.
7:03:52 PM
REPRESENTATIVE SCHRAGE expressed that he is "wildly" supportive
of the proposed bill and that it is much needed. He said that
he wants to make sure that working families see benefits and
employers don't "gain the system."
7:04:14 PM
CO-CHAIR SPOHNHOLZ asked Ms. Reynold if she would view payments
made to an employee as a child care stipend as taxable or non-
taxable.
MS. REYNOLDS responded that a stipend provided to an employee
would most likely be considered taxable income under federal
law, but would not be considered taxable income under State of
Alaska law since Alaska doesn't have an income tax.
7:05:11 PM
CO-CHAIR FIELDS offered his understanding that some employers
that offer or subsidize child care presently might do so from
the employer to the child care provider which would shield the
employee from an additional tax burden.
CO-CHAIR SPOHNHOLZ agreed, and postulated that it might be
useful to find out whether the federal government would tax a
child care stipend paid for the benefit of an employee. She
shared that it could be viewed as a means by which to compensate
employees. She added that when her three children were young,
she spent more on child care than on her mortgage each month,
and that even a modest stiped for child care would've made a
significant impact on her wellbeing. She referenced child care
centers that BP, the University of Alaska (UA), and Providence
Alaska Medical Center have made available for employees, and
noted that many employers in Alaska are aware of the importance
of child care to employees.
7:07:18 PM
CO-CHAIR SPOHNHOLZ stated that HB 121 was held over.
7:07:29 PM
The committee took a brief at-ease. [During the at-ease, Co-
Chair Spohnholz handed the gavel to Co-Chair Fields.]
HB 45-WORKERS' COMP. AND CONTAGIOUS DISEASES
7:08:18 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 45, "An Act relating to presumption of
compensability for workers' compensation claims related to
contagious diseases; and providing for an effective date."
7:09:09 PM
The committee took an at-ease from 7:09 p.m. to 7:12 p.m.
7:12:29 PM
REPRESENTATIVE SCHRAGE moved to adopt the proposed committee
substitute (CS) for HB 45, Version 32-LS0304\I, Marx, 3/16/21,
as a working document.
7:12:38 PM
REPRESENTATIVE KAUFMAN objected.
7:12:48 PM
A roll call vote was taken. Representatives Spohnholz, Fields,
Schrage, and Snyder voted in favor of adopting the CS for HB 45,
Version 32-LS0304\I, Marx, 3/16/21, as a working document.
Representatives Nelson, Kaufman, and McCarty voted against it.
Therefore, by a vote of 4-3, the CS for HB 45, Version I, was
before the House Labor and Commerce Standing Committee as a
working document.
7:13:57 PM
The committee took a brief at-ease.
7:14:30 PM
REPRESENTATIVE NELSON asked Representative Josephson to explain
the current workers' compensation pathways. He asked how a
worker is meant to explain what happened to necessitate a claim
and how a worker would move through the process to obtain
compensation.
7:15:12 PM
REPRESENTATIVE ANDY JOSEPHSON, Alaska State Legislature, as
prime sponsor of HB 45, responded that there is a report of harm
that gets filed within 30 days of the incident. If it is not
filed, the injured employee could file it administratively.
REPRESENTATIVE NELSON asked about the infectiousness of "this
disease" and if [infections] were attributable to work
conditions.
REPRESENTATIVE JOSEPHSON responded that it is attributable not
in the same way that a trade injury would be, but that it is
still attributable. He explained that the idea behind the bill
is that there are essential workers that have been identified,
which is a policy call, and these workers are "out there"
working because of the essential nature of the work. The theory
is that these workers are subject to more exposure than "the
rest of us."
7:17:14 PM
REPRESENTATIVE KAUFMAN asked why the fiscal note would be zero.
REPRESENTATIVE JOSEPHSON responded that the fiscal note is zero
because it represents "one agency speaking about what it knows,"
and in this case, the agency is the Department of Revenue (DOR).
He deferred the question to his staff, and asked if DOR used the
term "indeterminate" when referencing the DOR fiscal note.
7:18:07 PM
ELISE SORUM-BIRK, Staff, Representative Andy Josephson, Alaska
State Legislature, on behalf of Representative Josephson, prime
sponsor of HB 45, responded that the only fiscal note attached
is the one from DOR, though it is possible that there will be
more from the Department of Administration, Department of
Corrections, or Department of Transportation & Public Facilities
(DOTPF).
7:18:46 PM
REPRESENTATIVE NELSON noted the complexity of workers'
compensation. He shared his understanding that currently, the
employee has to prove that the employer did not provide a safe
working environment to receive workers' compensation. If this
bill were to pass, he shared his understanding that an employee
would simply have to prove employment at a workplace during the
time the employee contracted the infection and the employee
would receive compensation. He asked if this is correct.
REPRESENTATIVE JOSEPHSON responded that the second part of
Representative Nelson's statement is correct, and the first part
is less so. He explained that currently, employees are not
required to prove that working conditions were unsafe to receive
compensation. It is a "no fault" system and accidents happen,
he said. Regarding the second part of Representative Nelson's
question, he stated that it is correct that a worker would
simply have to prove employment during the time of infection to
receive compensation under the proposed legislation. He
explained that this would be sufficient to create a burden.
REPRESENTATIVE NELSON asked if that proof is all an employee
would need.
REPRESENTATIVE JOSEPHSON responded yes.
7:20:15 PM
REPRESENTATIVE SCHRAGE offered his understanding that the bill
would be relevant only during a time when a disaster has been
declared. He said that the bill would simply supply some
benefit of the doubt to an employee who is providing an
essential service during a disaster. He asked Representative
Josephson if his understanding is correct.
REPRESENTATIVE JOSEPHSON responded that is correct.
7:20:52 PM
REPRESENTATIVE MCCARTY asked Representative Josephson whether he
has "any numbers as to what ends up in liability lawsuits" and
whether this could cause a rise in potential lawsuits to
employers.
REPRESENTATIVE JOSEPHSON responded that there's no potentiality
for that because an employer cannot sue in a personal injury
action, or "tort". The only exception to this would be a
situation where there's third party liability, he said. He
shared that the whole system began at the turn of the 20th
century with [Chancellor Otto von] Bismarck, an early champion
of workers' compensation, and is not based on liability or
fault, but is instead based on a contract called the "Great
Bargain."
7:22:34 PM
CO-CHAIR FIELDS shared that the entire purpose of workers'
compensation is to shield employers from tort liability.
7:22:48 PM
REPRESENTATIVE SCHRAGE moved to report CSHB 45, Version 32-
LS0304\I, Marx, 3/16/21, out of committee with individual
recommendations and the accompanying fiscal notes.
7:23:00 PM
REPRESENTATIVE NELSON objected.
7:23:16 PM
A roll call vote was taken. Representatives Schrage, Snyder,
Spohnholz, and Fields voted in favor of the motion to move CSHB
45, Version 32-LS0304\I, Marx, 3/16/21, out of committee with
individual recommendations and the accompanying fiscal notes.
Representatives McCarty, Nelson, and Kaufman voted against it.
Therefore, CSHB 45(L&C) was reported out of the House Labor and
Commerce Committee by a vote of 4-3.
HB 100-EXTEND WORKFORCE INVEST BOARD ALLOCATIONS
7:24:03 PM
CO-CHAIR FIELDS announced that the final order of business would
be a return to HOUSE BILL NO. 100, "An Act relating to
allocations of funding for the Alaska Workforce Investment
Board; and providing for an effective date."
7:24:06 PM
REPRESENTATIVE SCHRAGE moved to report HB 100 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 100 was reported out of the
House Labor and Commerce Standing Committee.
7:24:37 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
7:25 p.m.