Legislature(1999 - 2000)
2000-02-15 Senate Journal
Full Journal pdf2000-02-15 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