2020-01-22                     Senate Journal                      Page 1536
SB 156                                                                                                                        
SENATE BILL NO. 156 BY THE SENATE RULES COMMITTEE                                                                               
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
                                                                                                                                
                  "An Act relating to unemployment insurance                                                                   
              contribution rates; and providing for an effective                                                               
          date."                                                                                                                
                                                                                                                                
was read the first time and referred to the Labor and Commerce and                                                              
Finance Committees.                                                                                                             
                                                                                                                                
The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, Department of Labor and                                                                                     
          Workforce Development                                                                                                 
                                                                                                                                
Governor's transmittal letter dated January 21:                                                                                 
                                                                                                                                
Dear President Giessel:                                                                                                         
                                                                                                                                
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill relating to unemployment                                                                 
insurance employer contribution rates.                                                                                          
                                                                                                                                
In Alaska, the Unemployment Insurance Tax is one of the primary                                                                 
taxes that employers must pay. Alaska is the only state that currently                                                          
has a fixed minimum tax rate contribution of one percent. This                                                                  
minimum tax is assessed on businesses, irrespective of an employers’                                                            
experience factor.                                                                                                              
                                                                                                                                
Currently, AS 23.20.290(c) requires employers to make contributions                                                             
of not less than one percent in unemployment insurance taxes. This                                                              
bill lowers the minimum tax rate for employers in rate classes 1-9                                                              
from the existing one percent, to a rate correlated to the employer’s                                                           
experience factor. Experience factors for classes 1-9 range from 0.4 to                                                         
0.9 percent.  These changes are intended to address the                                                                         
disproportionately high employer tax rate contributions for small                                                               
business employers.                                                                                                             
                                                                                                                                

2020-01-22                     Senate Journal                      Page 1537
This legislation reduces the tax burden on Alaska businesses and                                                                
employers, while preserving the health of the Alaska Unemployment                                                               
Trust Fund, ensuring that Alaska workers are able to access benefits                                                            
when necessary.                                                                                                                 
                                                                                                                                
I urge your prompt and favorable action on this measure.                                                                        
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Mike Dunleavy                                                                                                                   
Governor