Legislature(2019 - 2020)SENATE FINANCE 532

03/19/2020 01:00 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
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Heard & Held
Uniform Rule 23 Waived
Uniform Rule 23 Waived
<Pending Referral>
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 19, 2020                                                                                            
                         1:11 p.m.                                                                                              
1:11:02 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair  von  Imhof  called the  Senate  Finance  Committee                                                                    
meeting to order at 1:11 p.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Senator Natasha von Imhof, Co-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
ALSO PRESENT                                                                                                                  
Senator  Click  Bishop,  Sponsor; Cody  Grussendorf,  Staff,                                                                    
Senator Click  Bishop; Lennon Weller,  Economist, Department                                                                    
of  Labor and  Workforce  Development; Representative  Chris                                                                    
Tuck,  Sponsor;  Kris  Curtis, Legislative  Auditor,  Alaska                                                                    
Division of Legislative Audit.                                                                                                  
PRESENT VIA TELECONFERENCE                                                                                                    
Patsy  Westcott,   Director,  Division  of   Employment  and                                                                    
Training  Services,   Department  of  Labor   and  Workforce                                                                    
SB 240    UNEMPLOYMENT BENEFITS FOR COVID-19                                                                                    
          SB 240 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 197    EXTEND SEISMIC HAZARDS SAFETY COMMISSION                                                                              
          HB 197 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
SENATE BILL NO. 240                                                                                                           
     "An  Act relating  to  unemployment  benefits during  a                                                                    
     period of state or  national emergency resulting from a                                                                    
     novel  coronavirus  disease  (COVID-19)  outbreak;  and                                                                    
     providing for an effective date."                                                                                          
1:11:33 PM                                                                                                                    
Co-Chair von Imhof noted that  this was the first hearing on                                                                    
the bill in committee.                                                                                                          
SENATOR CLICK BISHOP,  SPONSOR, commented that extraordinary                                                                    
times required  leadership, which the senate  would provide.                                                                    
He stated  that senate  leadership had  been working  on the                                                                    
concept for several weeks and  had been working with various                                                                    
state and federal  departments. He commented that  as of the                                                                    
previous  Tuesday,  there were  12  states  that had  passed                                                                    
similar language  to expedite  the waiting  requirements for                                                                    
benefits.  He said  that  the goal  was  to get  replacement                                                                    
funds into the economy as soon as possible.                                                                                     
1:14:32 PM                                                                                                                    
CODY GRUSSENDORF, STAFF, SENATOR  CLICK BISHOP, reviewed the                                                                    
Sectional Analysis (copy on file):                                                                                              
     Section  1.  Adds  a  new  section  to  uncodified  law                                                                  
     regarding  unemployment  insurance  and the  impact  of                                                                    
     COVID-19 on workers and employers.                                                                                         
          a) This new section says that to the extent                                                                           
     consistent with federal law, an  insured worker may not                                                                    
     be  disqualified  for   conduct  related  to  COVID-19,                                                                    
     1.  Providing care  including medical  care, to  one or                                                                    
     more persons;                                                                                                              
   2. Preventing or limiting the spread of COVID-19; or                                                                         
     3. Preventing or limiting economic loss or harm.                                                                           
          b) This section states that such protection of                                                                        
     the insured  worker applies for  90 days  beginning the                                                                    
     effective  date of  this act,  or the  date the  worker                                                                    
     applies  for a  benefit  under AS  23.20, whichever  is                                                                    
          c) This section states that the one week waiting                                                                      
     period  under AS  23.20.375 (b)  is  waived during  the                                                                    
     duration of the state or national emergency.                                                                               
          d) This section states that provision of such                                                                         
     benefit is not a violation of AS 23.20.500, the                                                                            
     Unemployment Security Act.                                                                                                 
          e) The Commissioner of Labor and Workforce                                                                            
    Development is directed to administer this section.                                                                         
     Section 2. This section  modifies the uncodified law of                                                                  
     the State  of Alaska  to increase  dependent allowances                                                                    
     for  unemployment  insurance.  Notwithstanding  federal                                                                    
     law, for the duration of  a state or national emergency                                                                    
     related to  COVID-19, the  allowance for  dependents of                                                                    
     insured  workers under  AS 23.20  is $75  per week  per                                                                    
     dependent.  It instructs  the Department  of Labor  and                                                                    
     Workforce   Development   to   not  limit   the   total                                                                    
     allowances for dependents.                                                                                                 
     Section  3. This  section repeals  this Act  April 1st,                                                                  
     Section 4. This section  authorizes the Commissioner of                                                                  
     the Department  of Labor  and Workforce  Development to                                                                    
     implement  this act,  and declares  that  they are  not                                                                    
     subject  to  the   Administrative  Procedures  Act,  AS                                                                    
     Section 5.  This section declares the  Act takes effect                                                                  
     immediately under AS 01.10.070(c)                                                                                          
1:16:18 PM                                                                                                                    
Co-Chair von Imhof introduced invited testimony.                                                                                
1:16:39 PM                                                                                                                    
PATSY  WESTCOTT,   DIRECTOR,  DIVISION  OF   EMPLOYMENT  AND                                                                    
TRAINING  SERVICES,   DEPARTMENT  OF  LABOR   AND  WORKFORCE                                                                    
DEVELOPMENT  (via teleconference),  announced  that she  was                                                                    
available for questions.                                                                                                        
Senator Bishop understood that the division require                                                                             
additional staff to meet the growing demand for                                                                                 
unemployment services.                                                                                                          
Ms. Westcott stated that the  division had reviewed staffing                                                                    
needs in  anticipation of  the already  increasing workload.                                                                    
She said  that staff  from other  units within  the division                                                                    
had been  diverted to  the front  lines, overtime  and phone                                                                    
hours had  also been increased  and expanded. She  said that                                                                    
the division  had several vacant  positions that  would need                                                                    
to be filled  in the coming weeks. She related  that 25 PCNs                                                                    
had already been budgeted for and would be filled.                                                                              
1:19:10 PM                                                                                                                    
Co-Chair von Imhof asked about  the application process, the                                                                    
necessary  qualifications  for  benefits, and  how  benefits                                                                    
were paid out.                                                                                                                  
1:20:13 PM                                                                                                                    
Ms.  Westcott  said  that  people   could  apply  online  at                                                                    
myAlaska.com or at call centers.                                                                                                
1:20:46 PM                                                                                                                    
Co-Chair von Imhof asked about the qualification process.                                                                       
1:21:03 PM                                                                                                                    
Ms.  Westcott replied  that applications  were processed  in                                                                    
real time.  She stated  that eligibility would  be reviewed.                                                                    
She  listed  those  qualifications  and  discussed  possible                                                                    
waivers.  She  said  that  the  bill  would  help  to  relax                                                                    
provisions so that the needs  of unemployed workers could be                                                                    
alleviated. She  shared that the  process normally  took two                                                                    
weeks to  first payment.  She discussed the  various payment                                                                    
methods.  She  said that  programming  changes  were in  the                                                                    
works  to  expedite  payments  by going  to  a  single  week                                                                    
payment process.                                                                                                                
1:23:46 PM                                                                                                                    
Co-Chair von  Imhof asked whether  the department  was ready                                                                    
to accept federal dollars.                                                                                                      
1:24:07 PM                                                                                                                    
Ms. Westcott replied in the affirmative.                                                                                        
1:24:25 PM                                                                                                                    
Senator  Wielechowski  asked  about   the  solvency  of  the                                                                    
Unemployment Insurance fund.                                                                                                    
1:24:45 PM                                                                                                                    
LENNON WELLER, ECONOMIST, DEPARTMENT  OF LABOR AND WORKFORCE                                                                    
DEVELOPMENT,  related  that  the  trust  fund  solvency  was                                                                    
sound. He said that there  was $493 million currently in the                                                                    
account, which  was above the current  statutory targets for                                                                    
full solvency.                                                                                                                  
Senator  Wielechowski asked  what  sort  of flexibility  was                                                                    
afforded by the amount in the fund.                                                                                             
Mr. Weller  replied that some  stress testing had  been done                                                                    
through  the next  12  months. He  thought  the state  could                                                                    
absorb  about an  approximate 8-fold  increase in  cases. He                                                                    
pointed  out  that duration  and  magnitude  of an  increase                                                                    
would have an  impact on the departments   ability to absorb                                                                    
payments.  He thought  the division  could handle  the costs                                                                    
for  three   to  six   months  of   10-times  what   it  had                                                                    
historically experienced.                                                                                                       
Co-Chair  von Imhof  thanked Mr.  Weller for  stress testing                                                                    
the  fund.  She  thought  that   additional  help  would  be                                                                    
provided  by   the  federal   government  that   would  keep                                                                    
businesses whole.                                                                                                               
1:28:10 PM                                                                                                                    
Senator Wielechowski  asked whether Mr. Weller  had any sort                                                                    
of comparison  between Alaska  and other  states considering                                                                    
the maximum allowable weekly benefit.                                                                                           
Mr. Weller  stated that there  was a maximum  weekly benefit                                                                    
amount  of  $370,   which  put  Alaska  last   on  the  list                                                                    
nationally for replacement of lost wages.                                                                                       
Senator  Wielechowski  was  interested in  seeing  the  data                                                                    
Mr.  Weller was  happy  to provide  the  information to  the                                                                    
1:29:12 PM                                                                                                                    
Senator Wielechowski wondered how UI was typically funded.                                                                      
Mr. Weller  stated that  the Unemployment  Insurance Program                                                                    
was  funded  solely through  a  payroll  tax collected  from                                                                    
taxable wages,  which accounted for  93 percent of  all wage                                                                    
and salary employment in the state.                                                                                             
Senator  Bishop   asked  whether   it  was  true   that  the                                                                    
department could receive federal dollars for the fund.                                                                          
Mr. Weller answered  in the affirmative. There  was also the                                                                    
ability  to  gain  federal  dollars  to  pay  out  emergency                                                                    
compensation and, in some cases, extended benefits.                                                                             
1:30:38 PM                                                                                                                    
Senator Hoffman  noted that the  sponsor stated  that people                                                                    
under quarantine  were eligible for benefits.  He asked what                                                                    
kind  of  documentation would  be  needed  to procure  those                                                                    
benefits   and  whether   the   self-quarantined  would   be                                                                    
Ms. Westcott  stated that when  an individual filed  for UI,                                                                    
it was  required to  certify that  the information  was true                                                                    
and correct.  She stated that  if the department  had reason                                                                    
to question  the information, it was  investigated. She said                                                                    
that individuals  affected by Covid-19  would be  treated no                                                                    
Senator  Hoffman  restated  his question  about  individuals                                                                    
that were  quarantined. He  asked about  whether individuals                                                                    
that self-quarantined were eligible.                                                                                            
Ms. Westcott  stated that the bill  expanded the eligibility                                                                    
to provide benefits to anyone affected by Covid-19.                                                                             
1:33:59 PM                                                                                                                    
Senator Hoffman  asked if people that  self-quarantined were                                                                    
eligible for benefits.                                                                                                          
Ms. Westcott answered  in the affirmative. Part  of the goal                                                                    
with the legislation was to protect communities.                                                                                
1:34:43 PM                                                                                                                    
Co-Chair  von Imhof  asked whether  a person  quarantined at                                                                    
home  and receiving  payment from  their  employer would  be                                                                    
Ms. Westcott answered in the negative.                                                                                          
1:35:28 PM                                                                                                                    
Senator Bishop  appreciated Ms. Westcott's  earlier comments                                                                    
when  she discussed  that the  federal guidelines  were open                                                                    
for the states  interpretation  for application. He wondered                                                                    
whether the  department would need additional  PCN authority                                                                    
going forward.                                                                                                                  
Ms.  Westcott agreed  that the  department  would need  some                                                                    
additional PCN authority and would  not turn down additional                                                                    
PCNs if they were allowed.                                                                                                      
1:37:15 PM                                                                                                                    
Senator Bishop asked how many  positions would be needed and                                                                    
how long  it would take to  train new staff to  take claims.                                                                    
He asked how long employee training would take.                                                                                 
Ms. Westcott shared that claims  taking was a necessary step                                                                    
for  advancement  in the  division,  so  must employees  had                                                                    
already  been trained.  She added  that  a typical  training                                                                    
period lasted three months.                                                                                                     
1:39:23 PM                                                                                                                    
Senator  Wielechowski asked  about the  maximum time  that a                                                                    
person would be eligible for benefits if the bill passed.                                                                       
Ms.   Westcott  stated   that   the   maximum  duration   of                                                                    
eligibility  was  26  weeks.  She  referenced  Mr.  Weller's                                                                    
mention  of  possible  extended   benefits.  She  said  that                                                                    
because  of   the  expected  increased   workload,  extended                                                                    
benefits  were expected;  total weeks  of extended  benefits                                                                    
would be 39 weeks.                                                                                                              
1:40:51 PM                                                                                                                    
Senator Wielechowski  referenced the  concept of  a "rolling                                                                    
closure"  and suggested  that  the  COVID-19 virus  outbreak                                                                    
would wax and wane over time.  He asked whether a person who                                                                    
received benefits, went back to  work, and then was laid off                                                                    
again, could they reapply for UI.                                                                                               
Ms. Westcott stated that the  26 weeks would be available at                                                                    
any  time  during  the  benefit   year  depending  upon  the                                                                    
individual need.                                                                                                                
1:42:27 PM                                                                                                                    
Co-Chair  von   Imhof  commented   that  the  bill   had  an                                                                    
expiration  date of  the following  April 2021.  She thought                                                                    
the state  was entering  uncharted territory and  would need                                                                    
to be flexible.  She thought it was not possible  to know to                                                                    
what degree  Alaskans would be  affected or the  duration of                                                                    
the pandemic. She  hoped that further work could  be done in                                                                    
January 2021.  She relayed that  the federal  government had                                                                    
just proposed a one-trillion-dollar emergency fund.                                                                             
1:43:49 PM                                                                                                                    
Senator Bishop thought  the main takeaway was  that the week                                                                    
waiting  period would  be waived.  He thought  cash flow  to                                                                    
Alaskans was top priority.                                                                                                      
1:44:37 PM                                                                                                                    
Co-Chair von Imhof OPENED public testimony.                                                                                     
1:44:48 PM                                                                                                                    
Co-Chair von Imhof CLOSED public testimony.                                                                                     
SB  240  was  HEARD  and   HELD  in  committee  for  further                                                                    
Co-Chair von  Imhof set the  bill aside. She noted  that the                                                                    
companion legislation  would be taken  up as soon as  it was                                                                    
in committee.                                                                                                                   
HOUSE BILL NO. 197                                                                                                            
     "An Act extending the Alaska Seismic Hazards Safety                                                                        
     Commission; and providing for an effective date."                                                                          
1:45:16 PM                                                                                                                    
REPRESENTATIVE  CHRIS   TUCK,  SPONSOR,  said   that  Alaska                                                                    
experienced  numerous  earthquakes   each  year,  which  put                                                                    
people  and infrastructure  at risk.  The bill  would extend                                                                    
the Alaska  Seismic Hazards Safety Commission,  which brings                                                                    
together key  governments official and volunteer  experts to                                                                    
provide  recommendations   on  how  to   improve  earthquake                                                                    
response and mitigation.                                                                                                        
1:48:01 PM                                                                                                                    
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE  AUDIT,  reviewed  the audit  report  "A  Sunset                                                                    
Review  of  the  Department  of  Natural  Resources,  Alaska                                                                    
Seismic  Hazards Safety  Commission  (commission)" (copy  on                                                                    
file). She stated that the  audit found that there continued                                                                    
to be a  public policy need for  the commissions  existence.                                                                    
She referenced Page  9 of the report, which  showed that the                                                                    
annual expenditures  were relatively  low for  the expertise                                                                    
leveraged by  the commission. She  spoke to  the recommended                                                                    
administrative improvements on Pages 16 and 17:                                                                                 
     • The commission's chair should ensure procedures are                                                                      
        implemented to publish meeting notices timely and                                                                       
     • The commission's chair should ensure the strategic                                                                       
        plan is updated to reflect current goals and                                                                            
        priorities based on experience.                                                                                         
Ms. Curtis  furthered that the  department had  responded to                                                                    
the  audit (Page  29) by  agreeing that  the commission  was                                                                    
necessary and that  the administrative recommendations would                                                                    
be addressed.  She added  that the  chair of  the commission                                                                    
agreed to  the recommendations and said  that meetings would                                                                    
be  noticed  and  that  the  administrative  plan  had  been                                                                    
1:49:40 PM                                                                                                                    
Co-Chair von Imhof  thought the bill was  simple. She listed                                                                    
the people available for expert testimony.                                                                                      
1:50:24 PM                                                                                                                    
Co-Chair von Imhof OPENED public testimony.                                                                                     
1:50:35 PM                                                                                                                    
Co-Chair von Imhof CLOSED public testimony.                                                                                     
Co-Chair von Imhof set the bill aside.                                                                                          
CSHB 197(FIN) was HEARD and HELD in committee for further                                                                       
1:51:04 PM                                                                                                                    
The meeting was adjourned at 1:51 p.m.                                                                                          

Document Name Date/Time Subjects
SB 240 - CRS Summary of HR 6021.pdf SFIN 3/19/2020 1:00:00 PM
SB 240
SB 240 Backup Document- USDOL Guidance to State 03-12-20.pdf SFIN 3/19/2020 1:00:00 PM
SB 240
SB 240 Backup Document- State UI Emergency Declarations- By Rep Fields Office 3.16.2020.pdf SFIN 3/19/2020 1:00:00 PM
SB 240
SB 240 Sectional Analysis ver. A.pdf SFIN 3/19/2020 1:00:00 PM
SB 240
SB 240 Sponsor Statement.pdf SFIN 3/19/2020 1:00:00 PM
SB 240
SB 240 UI General Information Brochure 03.18.2020.pdf SFIN 3/19/2020 1:00:00 PM
SB 240
SB 240 DOLWD Unemployment Insurance Benefit Inforamtion 3.19.2020.pdf SFIN 3/19/2020 1:00:00 PM
SB 240
HB 197 Additional Documents 2019 Alaska Seismicity Summary 2.01.20.pdf SFIN 3/19/2020 1:00:00 PM
HB 197
HB 197 Sponsor Statement 3.12.2020.pdf SFIN 3/19/2020 1:00:00 PM
HB 197
HB 197 State Farm letter of support 2.7.2020.pdf SFIN 3/19/2020 1:00:00 PM
HB 197
HB 197 Supporting Document-Alaska Seismic Hazards Safety Commission Audit.pdf SFIN 3/19/2020 1:00:00 PM
HB 197
HB 197 Supporting Document-ASHSC 2018 Annual Report.pdf SFIN 3/19/2020 1:00:00 PM
HB 197