Legislature(2001 - 2002)
04/04/2002 09:27 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 04, 2002
9:27 AM
TAPES
SFC-02 # 49, Side A
SFC 02 # 49, Side B
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 9:27 AM.
PRESENT
Senator Pete Kelly, Co-Chair
Senator Dave Donley, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Lyda Green
Senator Gary Wilken
Senator Lyman Hoffman
Senator Donny Olson
Also Attending: REPRESENTATIVE LISA MURKOWSKI; REBECCA NANCE GAMEZ,
Deputy Commissioner, Department of Labor and Workforce Development;
RONALD E. HULL, Director, Division of Employment Security,
Department of Labor and Workforce Development; KIM GARNERO,
Director, Division of Finance, Department of Administration
Attending via Teleconference: From Anchorage: JAMES KUBITZ, Vice
President, Real Estate, Alaska Railroad Corporation, Department of
Community and Economic Development
SUMMARY INFORMATION
HB 298-LEGISLATIVE APPROVAL OF RAILROAD LEASES
The Committee heard from the sponsor, considered and adopted a
conceptual amendment, and reported the bill from Committee.
HB 58-UNEMPLOYMENT COMPENSATION BENEFITS
The Committee took public testimony, heard from the Department of
Labor and Workforce Development and the Department of
Administration. The bill was held in Committee.
SB 140-SMALL WATER-POWER DEVELOPMENT PROJECTS
The Committee adopted a conceptual amendment and reported the bill
from Committee.
CS FOR HOUSE BILL NO. 298(L&C)
"An Act relating to authorizing the Alaska Railroad
Corporation to lease land for a period of up to 55 years."
This was the first hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE LISA MURKOWSKI, sponsor of the bill, reminded the
Committee current state regulations mandate that leases exceeding
35 years must be approved by the Legislature. She stated this bill
would allow the Alaska Railroad Corporation to develop a long-term
planning strategy by allowing the Railroad authorization to commit
to 55-year lease arrangements.
Representative Murkowski explained the current 35-year lease
limitation is both a detriment to long-term planning and to
obtaining financial backing for which a lease agreement of at least
40 years is a requirement. She added that extending the lease
provision to 55-years for the railroad would make Alaska Railroad
Corporation's leasing policy consistent with those of the
University of Alaska and the Department of Natural Resources.
Representative Murkowski stated communities and businesses that
work with the Railroad support the extension of the terms of the
lease. She stated the extension would spur economic development in
areas involved with Railroad-leased land.
JAMES KUBITZ, Vice President, Real Estate, Alaska Railroad
Corporation, Department of Community and Economic Development
testified offnet from Anchorage to voice support of the bill.
Amendment #1: This conceptual amendment inserts an immediate
effective date into the bill.
Senator Ward offered a motion to adopt Amendment #1.
There were no objections, and the amendment was ADOPTED.
Senator Green moved to report CS HB 298(FIN), with accompanying
zero fiscal note from the Alaska Railroad Corporation, from
Committee.
The bill REPORTED from Committee without objection.
CS FOR HOUSE BILL NO. 58(L&C)
"An Act relating to the calculation and payment of
unemployment compensation benefits; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
FRANK DILLON, Executive Vice President, Alaska Trucking
Association, testified via teleconference from Anchorage on behalf
of the Association in support of this bill; however, he suggested
that Section 1 of the bill be capped at $260, cap Section 2 of the
bill at $284, and cap Section 3 of the bill at $300. He stated the
trucking industry is currently facing "general insurance rate
increases" in excess of 30 percent and the highest diesel fuel
prices in the country. He suggested the Legislature consider
"typing" job categories in which provisions are made to provide
seasonal supplement insurance to laid-off seasonal workers who are
assured of being rehired as opposed to regular unemployment
insurance benefits.
DON LOWRY, Field Representative, Operating Engineers, Local 302
testified via teleconference from Fairbanks in support of the bill
as it would be very beneficial to the Union's 3,000 members, many
of whom work seasonally. He stated the proposed increases would be
beneficial to help keep workers available for seasonal industries.
JIM LECRONE, Public Safety Employees Association, testified via
teleconference from Anchorage in support of the bill for "it is bad
to be fiftieth out of fifty states" in unemployment wage benefits."
Co-Chair Kelly clarified research has shown that Alaska is forty-
seventh out of fifty states in unemployment insurance coverage.
VINCE BELTRAMMI, President, Western Alaska Building Trades Council
representing approximately seventeen unions, testified via
teleconference from Anchorage in support of the bill. He stated
current unemployment compensation levels do not match up to level
of wages. He stated that only Arizona has lower unemployment
benefits than Alaska in Region Six, and since 1982, the gap between
poverty level and the unemployment compensation level has widened.
DICK CATTANACH, Executive Director, Associated General Contractors
(AGC), testified via teleconference from Anchorage in favor of
increasing unemployment benefit levels; however, voiced that using
the state's average weekly wage to determine the level of
unemployment benefits should not be used. He listed ten reasons
supporting this position including that unemployment insurance is
designed as a partial wage replacement between times of employment,
and should be used to supply a temporary financial safety net.
Senator Wilken requested Mr. Cattanach send his testimony in
writing to the Committee.
Mr. Cattanach stated he would.
MICHAEL FRIBORG, Member, Operating Engineers Local 302, testified
via teleconference from Fairbanks in support of HB 58. He stated
seasonal workers in construction, fisheries, tourism, and the like
need the increase in benefits to be able to continue to live in
Alaska.
DAVID FORD, Business Manager, Ironworkers Local Union, testified
via teleconference from Anchorage and stated that apprentices in
the union earn between $25,000 and $35,000 during the year, and
their unemployment benefits of $125 average approximately 35
percent of their average weekly wage. He informed the Committee
this legislation would raise current levels to approximately 48
percent of the apprentice's weekly wage resulting in a $24 weekly
benefit increase. He stated this increase is needed to keep these
apprentices in the state. He informed the Committee the Union
encourages many of its seasonal workers, in the slow winter months,
to move to Washington; however, some of them do not come back due
to Washington's good wages, steadier work, and the fact these
workers can receive almost twice as much unemployment insurance
compensation levels based on Washington wages. He stressed this
loss of qualified workers is a hardship to businesses, especially
in rural villages.
BLAKE JOHNSON, President, Kenai Peninsula Central Labor Council,
testified via teleconference from Anchorage in support of the bill
and encouraged the Committee consider a higher increase if
possible. He stated there is a significant amount of seasonal
employment in the Kenai area.
VALERIE BAFFONE, President, Anchorage Central Labor Council,
testified via teleconference from Anchorage that this bill would
impact all three sectors the Council represents: construction
trades, the public sector, and the service trade. She stated the
bill represents a reasonable and constrained increase in
unemployment checks. She stressed that an unemployment check is not
a welfare check as employers and employees have paid for it. She
stated that in Alaska, by nature, periods of unemployment are
expected. She stated current benefit levels do not allow employers
to have the labor force they need as workers leave the area if they
are not able to receive adequate compensation in the off-seasons.
PETE BOEHLER, United Food and Commercial Workers Union, Local 1496,
testified via teleconference from Anchorage on behalf of the
Union's 3,000 retail workers statewide, in support of the bill.
GREG O'CLARAY, Director of Governmental Affairs for District 1,
Marine Engineers Beneficial Association, testified that this bill
is about security. He stated the three most traumatic things that
happen in our lives are moving, divorce and loss of a job. He
stated that approximately 70 percent of the Union's 2,000 members
are shore-side workers in municipalities, airports, tanker fleets,
and the Marine Highway System. He stated unemployment benefits "are
very important to the members because of the cyclical seasons for
maritime workers in many parts of the state."
Mr. O'Claray mentioned the lack of testimony regarding the impact
unemployment benefits have on the state's economy, and
characterized this as an economic stimulus package for the state.
He referenced the pamphlet titled "Increasing Alaska's Weekly
Benefit Amount" compiled by the Department of Labor and Workforce
Development [copy on file], and noted the amount of unemployment
benefits, referenced in Table 2.14, paid out to the various
communities around the state including $30 million in the Anchorage
area. He stated this money goes directly into the local economy.
Mr. O'Claray stated the construction industry pays $15 million in
unemployment taxes; however, that industry receives $21 million in
unemployment benefits. He stated it is surprising that an industry
that is receiving more than it pays in, is complaining about the
compensation rates.
Mr. O'Claray voiced support for the bill as it is written; however
is concerned that Alaska is ranked forty-seventh of the fifty
states in unemployment benefits levels. He urged the Committee to
pass the bill without change.
Senator Wilken disagreed these unemployment benefits would be an
economic stimulus package because the funding for these benefits
"comes out of the employers' checkbook." He characterized this as
"old money," not new money, as it is a tax. He stated that Alaskans
should not be ashamed of being ranked forty-seventh because "the
threshold" to qualify for benefits in Alaska "is very low." He
voiced general support of the bill.
Mr. O'Claray responded that how one perceives the benefits is a
"matter of semantics." He opined that unemployment benefit
increases, without an increase of employer or employee
contributions for the first two years, would provide an economic
stimulus. He reminded the Committee that not "one dime of general
funds" supports these payments consisting of 80 percent employer
contributions and 20 percent employee contributions. He stressed it
is a "great program, it does keep workers in Alaska," and has a
great affect on a "qualified work force."
Senator Olson inquired how many small businesses employing less
than fifty employees "have weighed in on this bill."
Co-Chair Kelly noted forthcoming testimony from the Department of
Labor and Workforce Development and the Alaska State Chamber of
Commerce might be able to address that question.
REBECCA NANCE GAMEZ, Deputy Commissioner, Department of Labor and
Workforce Development stated this bill would raise the maximum
unemployment insurance weekly benefit payment to $320 over a two
and a half year period. She commented that in a situation where a
long-term, well-paid worker earning between $35,000 and $50,000
loses their job, the current maximum level of $248 "is inadequate
temporary wage replacement". She informed that increasing the
maximum weekly benefit to $320 would boost the average maximum
replacement rate from 38 percent of wages to 48.5 percent of the
current average weekly wage of $659; however the federal guideline
of 50 percent of wages is met or exceeded by the majority of other
states.
Ms. Gamez warned there is a cost associated with increasing the
benefits as employers would be required to pay an additional $8
million in taxes and employees would pay an additional $2 million
through employee contributions. She stated the increase would be
"gradually phased in and will be fully realized in the year 2008."
AT EASE 10:14 AM / 10:15 AM
Co-Chair Kelly asked for clarification that current regulation
formulas do not require a 20 percent contribution by employees who
earn below a certain wage level.
Ms. Gamez responded that all employees contribute, regardless of
wage.
RONALD HULL, Director, Employment Security Division, Department of
Labor and Workforce Development confirmed that all employees pay
.52 percent of their wage into the program, and if this bill passes
that amount would increase to .57 percent.
Co-Chair Kelly qualified that both employer and employee
contributions would increase simultaneously.
Mr. Hull confirmed.
Senator Hoffman stated the pamphlet denotes the employees'
contribution level as .5 percent.
Mr. Hull explained that the pamphlet information is calculated
based on the 2001 rates of .5 percent; however the current rate is
.52 percent.
Senator Hoffman remarked this is not explained in the Department's
presentation. He asked if the maximum level of taxable wages would
increase under this proposal.
Mr. Hull responded that the maximum taxable wage would be increased
from the current $26,750.
Senator Hoffman asked if this information is included in the
handout material.
Mr. Hull replied that this information is included on page 14 of
the bill. He informed the Committee the level of taxable wages
would increase to $35,750 in the third year.
Senator Hoffman asked if that wage rate would then stay constant or
vary over time.
Mr. Hull responded the amount would remain constant to support the
weekly benefit amount (WBA) at the projected level.
Senator Hoffman asked how Alaska's taxable wage maximum of $35,750
for unemployment insurance compares to levels in other states.
Mr. Hull did not have that information.
Senator Hoffman contended that if the amount of benefits Alaskans
receive is being compared to other states then the "ceiling amount"
employees pay should also be a consideration.
Mr. Hull stated that he would supply this information to the
Committee.
Mr. Hull informed the Committee this bill addresses how well
Alaska's unemployment insurance program benefits the workers,
employers, and communities of the state. He explained how the
program has developed since its inception in 1935 "as part of the
Social Security Act in which the United States Congress allowed
each state to develop a system with broad federal oversight which
would provide a safety net for temporarily unemployed workers." He
stated, "the system was designed using an insurance model, rather
than an entitlement program," whereby the principle underwrites and
identifies potential loss incurred by a small portion of the
insured group collecting revenue from everyone. He stated, in this
case, "the insured loss" is wages of unemployed workers. He
explained the premiums to cover these losses are payroll taxes paid
by employers and workers. He reiterated, "in Alaska, employers pay
80 percent and workers pay 20 percent of the established premiums.
Mr. Hull stated the benefit amount paid to an unemployed individual
is based on wages earned in a prescribed time, called the base
period, whereby displaced workers who earned a higher wage receive
a higher benefit because "their loss of work has a higher impact."
Mr. Hull detailed the maximum benefit levels the plan currently
pays. He informed the Committee that the program benefits were most
recently modified in 1997. He reported that the unemployment
insurance program provides economic benefits to communities,
businesses and workers by supplying trained workers with the means
to pay "non-deferrable expenses while looking for other work,"
assisting in keeping trained workers in Alaska, and because
benefits paid directly to workers enter the economy "keeping the
cash flowing in communities during economic downturns."
Mr. Hull stated that 41 states have increased their maximum
benefits amount since January 2001, and noted that Chart 4 in the
pamphlet ranks Alaska's position against the other states in Region
6, on the percent of the maximum weekly benefit amount as a percent
of the average weekly wage. He stated the proposed legislation
provides for a graduated increase in benefits with the first
increase from $248 to $272 effective July 1, 2002; the second
increase to $296 on January 1, 2003, and the third increase to $320
on January 1, 2004. He stated the employer and employee tax
increases would be phased in with a minimal increase in 2004 and
the final tax increase in 2008. He stated that, assuming wages and
total employment remain at 2001 levels, this would result in an
overall increase of 9.6 percent for employers per worker, as
reflected in Chart 5.
Mr. Hull stated Chart 6 indicates that Alaska's maximum weekly
benefit amounts have not kept pace with the poverty level in the
state. He stressed this disparity level continues to increase.
SFC 02 # 49, Side B 10:26 AM
Mr. Hull urged the Committee to consider the adoption of the
proposed plan.
Co-Chair Kelly asked for confirmation that employers and employees
unemployment tax payment percentages would stay proportionally the
same.
Mr. Hull responded there are no increases for either employers or
employees for the first two years, then both would increase
proportionally: employers contributing 80 percent and employees
contributing 20 percent of the tax. He distributed a chart titled
"Estimated Max Cost Paid by Worker" dated April 3, 2002 [copy on
file] detailing the increase.
Co-Chair Kelly summarized that the Department is testifying that
whenever the employers' tax increases, the employees' does also.
Mr. Hull concurred, and stated the employees' share would increase
to .57 percent as their proportionate 20 percent share.
Senator Green asked if the monies deposited in this fund could be
used for other programs, such as the Vocational Education program.
Mr. Hull stated that a Senate bill relating to Training Vocational
Education program "diverted" money generated from the employee
unemployment insurance taxes before it was deposited into the Trust
Fund. He stated once the money is in the Trust Fund it could not be
diverted.
Ms. Gamez stated that this "fairly recent" divergence of funds has
not, of yet, yielded an impact on the Fund. She continued that the
Trust Fund is a "long term self stabilizing thing." She continued
that the use of the money for the training program has been taken
into consideration and is reflected in the aforementioned charts.
Senator Green if that bill had not passed, would this bill still be
necessary.
Ms. Gamez replied yes, that is correct.
Senator Green, referring to the Governor's transmittal letter's
comment that many seasonal industry's "employees rely on the
unemployment benefits to fill the gap between times of work," asked
if seasonal employment is what this program was intended for.
Ms. Gamez responded, "it is intended to be temporary wage
replacement that is administered on the insurance model as opposed
to an entitlement model." She stated it assists in stabilizing
communities in times of "seasonal or recession type" economic
downturn.
Senator Green inquired how long someone could qualify for benefits.
Ms. Gamez responded the amount of time is determined by work
history and wages, with the maximum coverage 16 weeks. She stated
that most people do not remain on the program for the full amount
of allowable time and the average benefit paid is $189 per week.
Senator Green asked if other states use the same model program.
Ms. Gamez replied this is an unemployment insurance trust fund that
is managed by the state. She stated that Alaska benefits from
having a bigger return on administrative dollars from the federal
government as compared to other states. She informed the Committee
that Alaska receives between a 200 and 320 percent return; whereas
"other states are in a negative situation." She continued that this
is a federally mandated program that is administered by each state.
Senator Green remarked the Department of Labor and Workforce
Development manages the program in Alaska.
Ms. Gamez concurred.
Senator Ward asked if other states use the 80 percent/20 percent
business and employee contribution percentage.
Ms. Gamez responded that Alaska is only one of two states requiring
employee contributions.
Senator Ward qualified that employers pay the entire amount in all
states except for New Jersey and Alaska.
Ms. Gamez stated this is correct.
Senator Ward inquired as to the percentage paid by the employees in
New Jersey.
Ms. Gamez responded she would supply that information to the
Committee.
Co-Chair Kelly asked the affect if the benefit amount paid to
people at the low end of the wage scale was increased instead of
increasing benefit amounts to people at the top end of the wage
scale.
Ms. Gamez responded the unemployment insurance program takes into
consideration "primarily people who have a combination of a
subsistence lifestyle or a seasonal economy depending on where they
live." She continued that "overall the lower unemployment insurance
rates go to rural Alaska where they might have that combination of
hunting, fishing and gathering, and then they have an opportunity
to work for a short period of time." She continued that people in
these instances usually have less than a 16-week duration time for
benefits.
Senator Ward asked why these are not the people to whom more money
would be beneficial.
Ms Gamez stated the benefits are "proportionate to the wages they
earn," as set in the insurance-based formula. She continued that
the intent of these benefits is to help people buy groceries, buy
fuel and help the local businesses."
Senator Ward stated helping people "get by" and return to work
whether they are union employees or not, is a goal of the program.
Ms. Gamez concurred, stating this is temporary wage replacement.
Co-Chair Kelly commented the Administration had made the decision
not to raise lower benefit levels because the people collecting at
the lower levels are living a subsistence lifestyle, while another
policy decision relating to predator control refuses "to manage
game so the people who live in those areas can actually have food
on their tables;" resulting in taking "away the food and the
employment benefits."
Ms. Gamez corrected her earlier statement by clarifying that people
could collect unemployment benefits up to a maximum of 26 weeks,
with the average claim being a 14.2-week duration.
Co-Chair Kelly asked for clarification on what is considered a
taxable rate.
Mr. Hull clarified that columns A and B presented in the proposed
committee substitute refer to base period earnings or wages.
Co-Chair Kelly asked for additional clarification regarding the
comment that "the taxable rate in the state had gone down" over the
last several years.
Mr. Hull clarified this comment referred to the "taxes that
employers are assessed to keep the Trust Fund solvent at the
optimal level," meaning that employers have had to pay less taxes,
as their rate has gone down, four out of the last five years.
Co-Chair Kelly questioned if employers pay a contribution as well
as a tax.
Mr. Hull qualified that the contribution is the tax. He continued
that the Trust Fund "is in good condition" based on the amount of
benefits paid out; therefore the tax rate employers' pay has been
reduced.
Senator Hoffman noted there are only two recipients of unemployment
benefits in False Pass, Alaska.
Senator Wilken noted that Chart #5 indicates that through the year
2008, weekly benefits would increase in tax classes ten and eleven,
and in order to accomplish this, employee contributions must be
increased $51 per year in order to fund the 9.6 percent increase.
Mr. Hull concurred.
Senator Wilken stated the State of Alaska's weekly benefits might
be low when compared to other states; however, the state's
qualifications to receive benefits are minimal.
Mr. Hull stated this is correct; Alaska is ranked third of all
states in the eligibility category. He continued that he does not
know what the lowest benefits in the nation are; however, Alaska is
amongst the lowest.
Senator Wilken, referring to Alaska General Contractor's public
testimony concern about benefits based on average wage, asked the
Department to further explain how benefits are determined.
Mr. Hull stated the original version of this bill did not include
any indexes, which is what the Department "is shooting for." He
elaborated that the maximum weekly benefit of $320 proposed in this
committee substitute, is based on the year 2002's average weekly
wage, and that in three years when it is phased in, the $320
benefit might not be the appropriate level.
Senator Wilken inquired if the methodology of calculating weekly
benefits is changed in this bill.
Mr. Hull responded no, explaining that the Department had used
indexing before and found it unsuccessful.
Senator Wilken questioned if AGC's stated opposition to the bill
based on average weekly wage is warranted.
Mr. Hull responded there is no formula based on the average wage,
and "quite frankly, the average weekly wage has dropped seven out
of the last twenty years, so if it were indexed it wouldn't always
go up, it would also go down."
Ms. Gamez reiterated indexing is not a component of the bill.
Senator Wilken stated that the testimony from AGC would be
forwarded to the Committee, and any confusion could be addressed.
Senator Olson asked for clarification of the qualifications for
unemployment benefits: specifically for individuals employed less
than 12 weeks.
Mr. Hull responded that to qualify, an individual is required to
have a base period minimum wage of $1200 in two quarters of the
year. He continued that an individual employed less than twelve
weeks could qualify but would get a minimum amount.
Senator Olson asked how a person who works for two months could
qualify for unemployment benefits.
Mr. Hull stated if the two months worked were in two quarters of
the year, that person would qualify.
Senator Olson summarized that employment in June and July qualifies
as two quarters, whereas July and August would be considered as one
quarter.
Co-Chair Kelly asked how Alaska's ranking of weekly benefits
compared to other states would be affected if dependent benefits
were factored in.
Mr. Hull responded eleven other states pay dependent allowances. He
continued that these monies were not factored into the comparison
charts because the state "is not specifically responsible;"
however, if the one dependent supplement of $72 were added to the
unemployment benefits reflected on Chart #4, there would not be a
substantial change in ranking.
Senator Ward restating prior comments about Alaska having a lower
qualification threshold for unemployment benefits, asked for
examples of other states' qualifications.
Ms. Gamez responded that Alaska has a lower monetary requirement
than other states to qualify for unemployment benefits.
Senator Ward inquired as to what those dollar amounts are.
Ms. Gamez responded the Department would supply that information to
the Committee.
Senator Ward asked for clarification of Alaska's various rankings
of benefits when compared to other states; specifically
clarification on what the number three national ranking entails.
Co-Chair Kelly explained that Alaska is ranked number three in ease
of qualifying for benefits and is ranked forty-seventh in amount of
weekly benefits paid.
Senator Ward asserted the need to receive information as to the
specific requirement levels of other states.
Co-Chair Kelly restated that Alaska is rated number three in the
"ease of getting in" the program, and this does not equate to a
dollar amount.
Ms. Gamez stated this is referred to as the "recipiency rate."
Senator Ward stated the Department had commented that in two states
an individual could make less money to qualify.
Mr. Hull stated the "receipiency rate is the ratio of individuals
receiving benefits to all unemployed workers." He continued that
Alaska's ratio of 59 percent is higher than the national average of
38 percent. He stated this ranking "has nothing to do with
dollars."
Ms. Gamez remarked that people in Alaska could earn less money than
other states to qualify for unemployment benefits. She continued
that she would supply other states' minimum earning amounts to the
Committee.
Senator Ward additionally requested the Department to supply
information regarding lowest benefit levels of other states.
Ms. Gamez opined states that have higher lower level benefits than
Alaska also have higher wage qualifications. She replied the
Department would provide the Committee with that information.
Co-Chair Kelly asked the Department to supply the Committee a
ranking comparison to other states based on using $23,000 as the
data point.
Senator Hoffman, referring to Chart 5 titled "Estimated Max Cost
per Worker for Average Employer" for Tax Classes 10 and 11, and
requested this information for all twenty tax classes.
Senator Wilken complimented the Department on the quality of the
information presented in the pamphlet.
Mr. Hull clarified that Co-Chair Kelly is requesting the amount of
benefits a person would receive at $23,000 wage earnings.
Co-Chair Kelly stated the Department has supplied the Committee
with Chart 1 showing the maximum weekly benefit amounts the State
of Alaska has paid from 1982 to current. He clarified the request
is for a chart depicting what unemployment benefits would be for a
base wage period of $23,000 without a set maximum level.
Ms. Gamez surmised the request to be for "a percentage of wage
replacement," and stated the Department would work with Committee
staff to produce the requested chart.
KIM GARNERO, Director, Division of Finance, Department of
Administration explained that the State of Alaska is "a
reimbursable employer for unemployment insurance purposes," whereby
the state reimburses the unemployment compensation fund for
unemployment benefits actually paid to former employees. She
detailed how the working reserve account is funded, and stated her
Department prepared the bill's fiscal note.
DARREL TSEU, Regional Director, Inland Boatmen's Union of the
Pacific, Alaska Marine Highway System, spoke in favor of the bill.
He reiterated that unemployment insurance benefits are a temporary
fix, and shared his personal experience with the program where he
found that when prospective employers discovered he was a seasonal
ferry system worker, they were reluctant to hire him as they
assumed he would be returning to the ferry system when positions
reopened. He stated the unemployment benefits assisted him with
money to cover some basic needs.
PAM LABOLLE, President, Alaska State Commerce of Commerce, voiced
support of the unemployment insurance program, but not for the
benefit levels proposed in this bill. She stated the proposed
levels would cost employers a total of $8 million, and noted that
employers in the State would also be facing additional increased
costs due to the minimum wage increase and higher liability
insurance premiums.
Ms. LaBolle stated Alaska is one of twelve states that provide
supplemental benefits for dependents, and that 43 percent of
Alaskans who receive unemployment benefits additionally receive the
supplemental benefits for dependents. She commented that Alaska's
forty-seventh place ranking rises up to the top ten when the
supplements for three dependents are factored in.
Ms. LaBolle stated Chart #2 titled " Alaska's Maximum Weekly
Benefit Amount as a Percentage of Average Weekly Wage," which is
included in the Department's pamphlet, indicates that Alaska, in
1997, was at its highest level in the 20-year history of the
program.
Ms. LaBolle stated 60 percent of the approximately 20 percent of
the members who responded to a recent membership poll did not
support an increase in the benefits levels while 26 percent
supported less than the second proposed level. She stated the
membership would support an increase to the first level of $272.
Co-Chair Kelly ordered the bill HELD in Committee.
SENATE BILL NO. 140
"An Act relating to regulation and licensing of certain water-
power development projects."
Amendment #3: This conceptual amendment would add the effective
date of January 1, 2003 to the bill.
Senator Green moved for adoption.
DARWIN PETERSON, staff person to Senator Torgerson, the sponsor of
the bill, stated support for the amendment.
There were no objections and Amendment #3 was ADOPTED.
Senator Green offered a motion to report CS SB 140 (FIN) from
Committee with previous fiscal notes in the amount of $19.5 from
the Department of Fish and Game, $24.0 from the Department of
Natural Resources, and $36.1 from the Department of Community and
Economic Development.
There were no objections and the bill REPORTED from Committee.
ADJOURNMENT
Co-Chair Pete Kelly adjourned the meeting at 11:06 AM
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