Legislature(2013 - 2014)BARNES 124
03/18/2013 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB76 | |
| SB23 | |
| HB112 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 76 | TELECONFERENCED | |
| += | HB 112 | TELECONFERENCED | |
| + | SB 23 | TELECONFERENCED | |
HB 76-UNEMPLOYMENT; ELEC. FILING OF LABOR INFO
3:22:17 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 76 "An Act relating to electronic filing of
certain information with the Department of Labor and Workforce
Development; relating to surcharges, rate increase reduction,
prohibition on the relief of certain charges, the unemployment
trust fund account, and the offset of certain unemployment
compensation debt under the Alaska Employment Security Act;
relating to the definition of 'covered unemployment compensation
debt' in the Alaska Employment Security Act; and providing for
an effective date."
3:22:52 PM
REPRESENTATIVE JOSEPHSON made a motion to adopt Amendment 1,
labeled 28-GH 1494\A.1, Wayne, 3/11/13, which read:
Page 1, line 2:
Delete "rate increase reduction,"
Page 3, lines 11 - 29:
Delete all material.
Renumber the following bill sections accordingly.
Page 5, line 5:
Delete "Section 10"
Insert "Section 9"
Page 5, line 6:
Delete "sec. 11"
Insert "sec. 10"
CHAIR OLSON objected for the purpose of discussion.
3:23:44 PM
REPRESENTATIVE JOSEPHSON explained Amendment 1 would delete
Section 5, which is the only controversial section of HB 76. He
stated that the state's Unemployment Insurance (UI) Trust Fund
has never been insolvent. He asked Ms. Huff to re-read a
definition of the weighted average, which includes the use of
the word solvency. Thus this UI Trust Fund is clearly about
solvency. He said Section 5 is irrelevant, in terms of who
pulls the trigger, since it could be anyone. However, this
provision would add unnecessary risk to this program and it
shifts the timing of the UI taxes, but not the total amount of
taxes. He expressed concern that the result may be that
businesses are paying lower taxes in good times and higher taxes
as they struggle to come out of a recession. This bill would
also require a new consultation with actuaries. He reminded
members that recently the state had difficulties with its
actuaries for the Public Employees' Retirement System (PERS)
unfunded liability. He acknowledged that the aforementioned
isn't a universal problem and concluded that the system is
working. Additionally, he said he has never recalled anyone in
his district raising this issue. Lastly, he informed the
committee that the state, in terms of the nation, ranks 34 out
of 50. The state pays $370 per week maximum, and there is a
correlation between what the state pays in benefits and this
formula. Given Alaska's high cost of living, he said one issue
is whether the state is adequately paying UI benefits if the
state is only paying $1,200 to $1,300 in UI benefits.
3:25:33 PM
CHAIR OLSON maintained his objection.
A roll call vote was taken. Representative Josephson voted in
favor of Amendment 1. Representatives Millett, Reinbold,
Saddler, Chenault, Herron, and Olson voted against it.
Therefore, Amendment 1 failed by a vote of 1-6.
3:26:12 PM
REPRESENTATIVE HERRON [did not offer] amendments in members'
packets Amendment 2 [labeled 28-GH1494\A.2, Wayne, 3/11/13], and
Amendment 3 [labeled 28-GH1494\A.3, Wayne, 3/14/13].
3:26:33 PM
REPRESENTATIVE HERRON moved to adopt Amendment 4, labeled 28-
GH1494\A.4, Wayne, 3/15/13, which read:
Page 3, line 20, following "may":
Delete "suspend, in whole or in part, any
unemployment rate of contribution increases"
Insert ", in increments of 16.5 percent, suspend
up to 66 percent of an unemployment rate of
contribution increase"
Page 3, line 23:
Delete "suspended, in whole or in part"
Insert "partially suspended under this
subsection"
Page 3, line 26:
Delete "suspended, in whole or in part"
Insert "partially suspended"
Page 3, following line 27:
Insert a new subsection to read:
"(b) The commissioner may not suspend more than
one 16.5 percent increment of an unemployment rate of
contribution increase under (a) of this section in a
six-month period."
Reletter the following subsection accordingly.
CHAIR OLSON objected for the purpose of discussion.
3:27:04 PM
REPRESENTATIVE HERRON explained Amendment 4. He related that he
circulated Amendment 2 [A.2] and Amendment 3 [A.3] and
discovered that both sides of the issue didn't like those
amendments. Therefore, Amendment 4, which allows UI tax
contributions to be suspended in parts up to 66 percent and
limits the commissioner's ability such that he/she may not
suspend it for more than one 16.5 percent increment without a
six-month period, was developed.
CHAIR OLSON maintained his objection.
3:27:47 PM
REPRESENTATIVE JOSEPHSON asked him to summarize Amendment 4
again.
REPRESENTATIVE HERRON explained that he [did not move forward]
with the earlier two amendments since he circulated them and
found committee members did not support the potential amendments
so he worked to improve the change. Under Amendment 4, the UI
insurance rates could incrementally be suspended up to 16.5
percent and allow a six-month trial prior to suspending another
16.5 percent UI tax contribution.
3:28:26 PM
CHAIR OLSON maintained his objection.
A roll call vote was begun. Representative Herron voted yea.
REPRESENTATIVE MILLETT requested an at-ease.
The committee took an at-ease from 3:28 p.m. to 3:30 p.m.
CHAIR OLSON asked for further clarification of Amendment 4.
REPRESENTATIVE HERRON related that in considering the testimony
the focus has been on Section 5 of the bill and the
administration and others are opposed to [Section 5.] Thus, he
said he tried to allow the department to adjust the unemployment
rate of contribution up or down on increments every 6 months up
to a maximum of 66 percent, which is the language in Amendment
4.
3:32:05 PM
BRYNN KEITH, Acting Deputy Commissioner, Office of the
Commissioner, Department of Labor & Workforce Development
(DLWD), introduced herself.
PAUL DICK, Director, Central Office, Division of Employment
Security (DES), Department of Labor & Workforce Development
(DLWD), introduced himself.
3:32:25 PM
CHAIR OLSON inquired as to the impact of proposed Amendment 4 on
the bill.
3:32:39 PM
MS. KEITH explained that the bill, as written, would allow the
commissioner of the DLWD limited discretion, under controlled
circumstances to suspend in part or in whole tax increases on
unemployment insurance. The department, she related, holds the
opinion that further restricting that flexibility is
unnecessary. Furthermore, adjusting tax rates twice a year as
opposed to the annual adjustment would potentially add an
additional burden to employers. Additionally, the semi-annual
adjustment would add additional administrative costs associated
with it within the DLWD.
3:33:21 PM
REPRESENTATIVE MILLETT surmised then that Amendment 4 would
require the department to review the UI rates every six months
and by discretion the DLWD could adjust the [UI] rates, which is
"a look back."
MS. KEITH answered yes; that is how she interprets Amendment 4.
REPRESENTATIVE MILLETT related her understanding that the
current "look back" is for one year and if the bill passed it
would remain a one-year "look back."
MS. KEITH answered yes.
CHAIR OLSON maintained his objection.
3:34:11 PM
A roll call vote was taken. Representatives Herron and
Josephson voted in favor of Amendment 4. Representatives
Millett, Reinbold, Saddler, Chenault, and Olson voted against
it. Therefore, Amendment 4 failed by a vote of 2-5.
The committee took an at-ease from 3:34 p.m. to 3:36 p.m.
CHAIR OLSON related that a conceptual amendment was previously
distributed to members, but since then had been incorporated
into the proposed committee substitute.
3:36:19 PM
REPRESENTATIVE REINBOLD moved to adopt the committee substitute
(CS) for HB 76, labeled 28-GH1494\N, Wayne, 3/18/13 as the
working document.
CHAIR OLSON objected for the purpose of discussion.
3:36:36 PM
KONRAD JACKSON, Staff, Representative Olson, Alaska State
Legislature, stated that Version N makes some minor corrections
to the bill. He pointed out that the most significant change
embodied in Version N is the repeal of Section 5 on page 6, line
4. The intent of the change is to give the department some time
to consider unemployment insurance rate adjustments. If there
is [a major economic crisis] or if a "terrible" commissioner
makes decisions, the language would disappear in five years.
3:38:30 PM
MR. JACKSON explained that a new page 3 is in Version N. He
offered that when the Department of Law drafts a bill the
legislative team of lawyers also review and format the language.
He pointed out that on page 2, line 13, the citation that refers
to the UI Trust Fund account, AS 23.20.135(a), which was in the
incorrectly referred to AS 23.20.130(b)(2). [The correction was
made to a proposed committee substitute (CS) for HB 76,
previously circulated to members but not discussed or adopted by
the committee.] He suggested that the committee consider
adoption of Conceptual Amendment 2, which corrects the
aforementioned typo on page 5, line 14, and page 6, line 1 of
Version N.
3:39:33 PM
REPRESENTATIVE REINBOLD moved Conceptual Amendment 2, [which
corrects the UI Trust Fund account citation]. There being no
objection, Conceptual Amendment 2 was adopted.
REPRESENTATIVE SADDLER asked for clarification on whether
Conceptual Amendment 2 would amend Version N.
CHAIR OLSON answered yes.
The committee took an at-ease from 3:40 p.m. to 3:42 p.m.
3:42:47 PM
CHAIR OLSON stated that the proposed CS for HB 76, Version N, as
amended, is before the committee.
3:42:57 PM
REPRESENTATIVE CHENAULT asked whether Conceptual Amendment 1 had
been approved.
MR. JACKSON explained that a draft amendment, entitled,
"Conceptual Amendment 1" was circulated to members, but was not
presented or adopted by the committee. Instead, the draft
language was incorporated into the proposed committee substitute
(CS) for HB 76, Version N. The committee formally adopted [the
proposed CS for HB 76, Version N], and adopted Conceptual
Amendment 2, which corrects the reference to the UI Trust Fund
account in the proposed CS for HB 76, Version N.
CHAIR OLSON remarked that the committee has been experiencing
some of the effects of a 90-day legislative session as opposed
to a 120-day legislative session.
3:44:11 PM
REPRESENTATIVE REINBOLD moved to report the proposed committee
substitute (CS) for HB 76, labeled 28-GH1494\N, Wayne, 3/18/13,
as amended, out of committee with individual recommendations and
the accompanying fiscal notes.
REPRESENTATIVE JOSEPHSON objected.
3:44:27 PM
A roll call vote was taken. Representatives Chenault, Herron,
Millett, Reinbold, Saddler, and Olson voted in favor of
reporting the proposed committee substitute (CS) for HB 76,
labeled 28-GH1494\N, Wayne, 3/18/13, as amended, from the House
Labor and Commerce Standing Committee. Representative Josephson
voted against it. Therefore, the CSHB 76(L&C) was reported out
of the House Labor and Commerce Standing Committee by a vote of
6-1.