2000-02-15                     Senate Journal                      Page 2303
SB 272                                                                       
SENATE BILL NO. 272 BY THE SENATE RULES COMMITTEE                              
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
                                                                               

2000-02-15                     Senate Journal                      Page 2304
SB 272                                                                       
An Act eliminating certain taxes under AS 21.09                               
on premiums from the sale of workers                                           
compensation insurance; relating to the                                        
establishment, assessment, collection, and accounting                          
for service fees for state administration of workers                           
compensation and worker safety programs;                                       
establishing civil penalties and sanctions for late                            
payment or nonpayment of the service fee; and                                  
providing for an effective date.                                               
                                                                               
was read the first time and referred to the Labor and Commerce,                
Judiciary and Finance Committees.                                              
                                                                               
Fiscal notes published today from Department of Administration,                
Department of Community and Economic Development, Department                   
of Labor and Workforce Development (2).                                        
                                                                               
Governors transmittal letter dated February 11:                                
                                                                               
Dear President Pearce:                                                         
                                                                               
The states workers compensation and worker safety programs in the              
Department of Labor and Workforce Development provide important                
benefits and services to employees and employers throughout Alaska.            
Successive budget cuts to the department have threatened the                   
viability of these programs to the point that a takeover of the safety         
program by the federal government is a distinct possibility.                   
                                                                               
Federal management of our occupational health and safety program               
is unacceptable to me and to most employers and employees in                   
Alaska. The bill I am introducing changes the way in which these               
programs are funded to ensure these services to Alaskans are put               
back on firm footing.                                                          
                                                                               
These programs are currently paid for with general funds. The costs            
roughly equate to the amount of money the state collects from the              
tax on workers compensation insurance premiums.                                
                                                                               
                                                                               

2000-02-15                     Senate Journal                      Page 2305
SB 272                                                                       
The programs clearly benefit all employers, but only those employers           
who purchase workers compensation insurance are taxed. Larger                  
self-insured employers pay no tax. This bill more equitably spreads            
the cost/benefit structure of worker safety programs by eliminating            
the premium tax and replacing it with a fee for all employers based            
on a percentage of their individual workers compensation claims.               
                                                                               
The fees would be accounted for separately and deposited into a                
worker safety and compensation account. The money in the account               
would be treated as designated program receipts available for                  
appropriation to the workers' compensation and safety programs. The            
bill provides for a four-year phase-in of the fees to minimize the             
impact on those self-insured employers who currently pay no tax.               
The new fee system is designed to raise the same amount of money               
as the current tax. Because the new system would spread costs                  
among more employers, those employers currently paying the                     
premium tax would realize a decrease in their payments.                        
                                                                               
This bill offers a fair, effective way of ensuring continued funding           
for vital worker protection programs. I urge your prompt and                   
favorable action on this measure.                                              
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor