Legislature(2021 - 2022)BARNES 124
03/29/2021 03:15 PM House LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB117 | |
| HB111 | |
| HB117 | |
| HB151 | |
| HB117 | |
| Alcoholic Beverage Control Board | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 117 | TELECONFERENCED | |
| *+ | HB 111 | TELECONFERENCED | |
| *+ | HB 151 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 151-UNEMPLOYMENT BENEFITS FOR COVID-19
4:33:29 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 151, "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."
4:34:17 PM
CO-CHAIR SPOHNHOLZ, as prime sponsor, introduced HB 151. She
explained that the proposed legislation would extend the
provisions under House Bill 308, passed in March 2020, during
the Thirty-First Legislative Session, and which provided for
temporary changes to Alaska's unemployment insurance (UI)
program in response to the COVID-19 pandemic. She said that the
provisions would be extended until September 6, 2021, to align
Alaska's UI program with the American Rescue Plan Act of 2021
(ARPA). The proposed legislation would waive the standard one-
week waiting period before receiving benefits; increase the
weekly per-dependent benefit from $24 to $75, as well as remove
the cap of three dependents for which applicants can receive a
supplemental benefit; and it would waive the work-search
requirement for workers who have had to stay home to care for
family members as a result of the pandemic. She noted that the
proposed UI benefit extension is at the request of the Division
of Employment and Training Services (DETS) at the Alaska
Department of Labor and Workforce Development (DOLWD).
CO-CHAIR SPOHNHOLZ explained that UI benefit claims during March
2021 were still over 200 percent higher than the previous year,
Alaskans continue to suffer record levels of unemployment
through no fault of their own, and one-third of Alaskans
receiving UI benefits have dependent children or family members
with disabilities. She stressed that UI is not public
assistance or an entitlement program, but an insurance benefit
that employees have paid into for years, expecting that the
insurance would be there when it was needed. She said that
average weekly claims paid in the past week were $440, and noted
that the state of Alaska has the lowest UI benefits in the
nation. For example, she said, an unemployed person who
typically earns $100,000 per year can receive a maximum benefit
of only $370 per week, totaling $19,610 annually. The minimum
possible benefit, she said, is $56 per week, equating to $2,912
in annual equivalent income. She stated that temporarily
extending the expansion of the UI benefits would provide
certainty for Alaskans, support families with children, ensure
that no federal dollars are left on the table, and support the
recovery of the economy.
4:38:04 PM
MEGAN HOLLAND, Staff, Representative Ivy Spohnholz, detailed the
sectional analysis on behalf of Co-Chair Spohnholz, prime
sponsor, which read as follows [original punctuation provided]:
Section 1: Removes the work search requirement for
applicants who cannot fulfill it as a result of a
COVID-19 outbreak and are otherwise eligible for
unemployment insurance (UI) benefits. Additionally,
this section waives the one-week waiting period before
applicants begin receiving UI benefits.
Section 2: Increases the per dependent UI benefit from
$24 per dependent to $75 per dependent. Additionally,
this section removes the existing cap of three
dependents for which applicants can receive a
supplemental benefit.
Section 3: Amends uncodified law to give the
Commissioner of Labor and Workforce Development
authority to adopt regulations necessary to implement
this act.
Section 4: Repeals the act in its entirety on
September 6th, 2021.
Section 5: Provides an effective date for sections 1-
3, retroactive to April 1, 2021.
Section 6: Provides for an immediate effective date.
4:39:39 PM
PATSY WESTCOTT, Director, Division of Employment and Training
Services, Department of Labor and Workforce Development,
provided testimony during the hearing on HB 151. She reiterated
the provisions in the proposed legislation and said that she has
nothing to add to Co-Chair Spohnholz's and Ms. Holland's
statements.
4:40:38 PM
NOLAN KLOUDA, Executive Director, Center for Economic
Development, University of Alaska Anchorage, told the committee
that he was asked to give an overview of the employment status
in Alaska, as well as some of the effects of the UI benefits
disbursed since the Coronavirus Aid, Relief, and Economic
Security (CARES) Act of 2020 was passed at the beginning of the
pandemic. He noted that in the months of April through August
of 2020 the state saw a loss of approximately 48,000 jobs, or 15
percent of total employment; the number accounted for general
job loss resulting from the pandemic as well as the seasonality
of employment in Alaska. For reference, he said, the state lost
only 13,000 jobs in the entirety of the 2013-2015 recession. He
expressed that the total year-over-year job losses in the months
of November 2020 through February 2021 were approximately
24,000, and that the winter job losses are lower than summer
only because of the seasonality. "We actually really haven't
seen a clear sign of employment recovery in the last several
months," he said, with the biggest job losses in the areas of
leisure and hospitality, food service, and personal services
such as beauty salons. He said that many of the job losses are
among workers who are younger and lower paid.
MR. KLOUDA said that unemployment levels are expected to be
elevated for "quite some time," with projections for employment
growth of 2-3 percent per year, taking up to five years to reach
2019 levels. Even with a recovery well underway, he said,
unemployment will remain high. As far as the pandemic
unemployment compensation (PUC), he noted that the pre-pandemic
average UI benefit was $260 per week, versus the national
average of $360. When the CARES Act added $600 per week PUC,
there was research looking at the effect of the PUC benefit.
The "bonus" benefit, he said, did not decrease employment; it
didn't lower the number of jobs that were available. He said
that while the conventional wisdom says more generous
unemployment compensation would cause more people to not work,
resulting in a decline of overall levels of employment, which
has not been the case.
4:44:41 PM
MR. KLOUDA cited a 2020 study by economists at Yale University
which found that, when given the opportunity to return to work
and forego unemployment benefits that were larger than a
paycheck, workers tended to return to employment. Another study
examined the data around the July 2020 expiration of the PUC
benefits, looking for evidence of increased employment as a
result of the expiration and found, he said, "There was no
evidence of that at all." He said that a third study duplicated
the findings, finding only that there was "a slight decline in
the level of search intensity" of unemployed people looking for
jobs, but that it was a "relatively small" effect, with multiple
applicants per job opening. He stressed that when the pandemic
first hit, the number of vacancies declined about 300 percent
faster than the number of applicants, so the employment
situation was more about the availability of jobs rather than
the generosity of benefits.
MR. KLOUDA, regarding the impacts of the PUC, said that local
spending increased by approximately 44 percent, creating a
stimulative effect in the local economy. He recalled hearing
from business owners who claim that they can't get people to
work because they're receiving UI benefits; while there may be a
few instances of such, he said, the data doesn't support the
claim. He said that one aspect of deciding whether to return to
work is the question of childcare; there is ample evidence of
people not being able to return to the workforce because they
don't have a good childcare solution, which has especially
affected women. He cited a statistic that said that women
between the ages of 25 and 44 are three times more likely than
men to be not looking for work due to childcare demands. He
said that the $600 PUC is now long over, though benefits of $300
per week have been extended, which is a much lower wage
replacement rate; thus, he said, any effect from the larger
benefit is now diminished by the smaller supplement.
4:48:49 PM
REPRESENTATIVE KAUFMAN directed attention to the provision on
line 14, page 1, of HB 151, "(1) providing care, including
medical care, to one or more persons;". He asked, "Is that any
care?"
CO-CHAIR SPOHNHOLZ deferred to Ms. Westcott.
4:49:45 PM
REPRESENTATIVE KAUFMAN repeated his question for Ms. Westcott,
saying, "What I'm wondering is if that's not overly broad, in
that that could be almost anything, that could be interpreted
literally wide open ... can you advise if that seems to be
adequately defined?"
MS. WESTCOTT answered that the federal guidelines related to the
provision are being followed, and she expressed her
understanding that HB 151 contains language consistent with the
federal legislation. She stressed that DOLWD has been following
the guidelines since they were first issued in March 2020.
REPRESENTATIVE KAUFMAN asked whether the provisions outlined in
page 1, line 14, and page 2, lines 1-2, are necessary, given
that the federal guidelines are already being followed.
4:52:51 PM
CO-CHAIR SPOHNHOLZ answered that every time the law is changed
in the state, the department has to issue new regulations and
write new software code, which can take "many months". She said
that because of the time factor, the proposed legislation is
written as closely as possible to the previous statutes in order
to reduce the administrative burden and lessen the chance of
having eligible beneficiaries waiting months to receive
benefits. She gave an example of a provision change in the per-
dependent benefits which took almost six months to update in the
software, and she said that the issue of providing medical care
is "incredibly relevant" because there could be an outbreak in a
person's childcare arrangement, rendering that person unable to
work while their child is under quarantine. She noted that the
number of people filing claims as of March 2021 is much lower
than the previous summer; however, it still makes sense to keep
consistency in the provisions. She stressed that the current
provisions expire on April 1, 2021, and if they lapse it means
that new laws would have to be written, software code would have
to be updated, and implementation could take months. She said
that the state's actuary has stated that the provisions would
not have an impact on the ability of the state's UI fund to
remain solvent.
4:54:56 PM
CO-CHAIR FIELDS asked Ms. Wescott if the committee should be
contemplating an end-date on the proposed legislation later than
September 6, 2021, given that the legislature wouldn't be in
session at that time to respond.
MS. WESTCOTT responded that there have been certain sectors of
the economy opening back up. She expressed that she foresees
the situation improving over the summer, now that the vaccine is
widely available; however, she can't predict what will happen
over the fall and winter.
CO-CHAIR FIELDS asked whether the DOLWD commissioner would have
the flexibility to extend benefits if the committee were to
extend the date beyond September 6.
MS. WESTCOTT replied that if the legislature were to extend the
provisions to December, the commissioner would have no
discretion, as the benefits would be in place. If Alaska was to
extend the waiting week beyond the federal level, she said, the
cost of paying that week would be fully absorbed by the state's
fund instead of being federally funded. In addition, she
explained, if the flexibility of the work-search requirements
was extended beyond what the federal provisions have directed,
Alaska could be potentially out of conformity with federal
directives if the federal government also does not extend them
beyond September.
4:59:01 PM
REPRESENTATIVE MCCARTY asked how many people are currently
receiving UI benefits. He then asked what would be the
anticipated rise in summer employment, should the tourism
industry restart.
MS. WESTCOTT replied that the number of individuals receiving UI
benefits changes week to week, and is very fluid, but currently
approximately 50,000 individuals receive UI benefits on a week-
to-week basis. For the question on summer employment, she
deferred to Mr. Weller.
5:00:30 PM
LENNON WELLER, Economist, Research and Analysis Section,
Department of Labor and Workforce Development, asked
Representative McCarty to clarify his question about summer
employment.
REPRESENTATIVE MCCARTY said, "Just what do we see in the
average?"
MR. WELLER said that summer employment, defined as the second
and third quarters of the year, tends to be significantly higher
than winter employment. Aggregate summer employment averaged
300,000 in 2020 and 335,000 in 2019. The current employment
forecast, he said, is 272,000 covered jobs in the second quarter
of 2021, compared to 269,300 in 2020. Third quarter covered
employment in 2021 is expected to be 287,100, compared to
283,600 in 2020. He said that probably the single largest
factor in summer employment is whether cruise ships will come to
Alaska. He noted that construction and seafood processing jobs
increase in the summer, but the bulk of employment comes with
those business that focus on tourism. He described expecting
summer 2021 employment to be "much more muted."
5:04:23 PM
REPRESENTATIVE MCCARTY asked whether a similar rise in
employment in the fishing industry.
MR. WELLER replied that he's not expecting much of a change in
seafood processing, as employment in that sector was not
significantly decreased.
5:04:57 PM
CO-CHAIR FIELDS expressed understanding that employees in
leisure and hospitality, construction, and seafood processing
will be laid off at the end of the season. He asked if trust
fund could handle a one or two month extension beyond what the
federal government will pay for.
MR. WELLER said that a waiting week doesn't change the duration
an individual would receive UI benefits, it only shifts the
period of eligibility by one week. He said that it's been nice
having the federal government paying for that first week, but
that week is built into the targets for trust fund solvency
anyway. He noted that most people receiving UI compensation
don't exhaust their benefit, and that he would expect to see
even fewer exhausting the benefit going forward. He said that
he would expect the extension to not have a large impact on
trust fund solvency, especially because regular claims are
expected to fall considerably with the arrival of late summer
and fall of 2021.
5:07:28 PM
CO-CHAIR SPOHNHOLZ shared that unemployment is not expected to
be nearly as bad as it was in summer of 2020, when there were
67,600 claims per week at the peak in May and continuing through
mid-July. She expressed that the fiscal impact of the provision
under HB 151, with an attached fiscal note of $13 million, would
be much lower than it would have been last year. She said that
the summertime is traditionally the "high water mark" for
employment, with unemployment rising with the transition into
fall. She said that the UI fund in Alaska is built to
accommodate the ebb and is well-capitalized. She mentioned that
DOLWD is continuing to work with unemployment beneficiaries to
move towards employment, providing retraining and work search
support services. She described HB 151 as a "common sense
measure that aligns our state statute with federal law and
federal funding."
5:10:21 PM
CO-CHAIR FIELDS announced that the amendment deadline of 3:15
p.m. on March 30, 2021.
REPRESENTATIVE KAUFMAN asked why the amendment deadline is so
soon.
CO-CHAIR FIELDS explained that the provisions expire in April
and the intention is to move the bill along quickly, in order to
give DOLWD time to update their regulations to align with ARPA.
MS. WESTCOFF commented that if the waiting week waiver is
extended beyond September 6, the first week of extended benefits
would have to be fully funded by the state instead of being
funded by the federal government.
REPRESENTATIVE KAUFMAN asked why HB 111 also had a due date of
March 30, 2021, for amendments.
CO-CHAIR FIELDS replied that there is a fairly long list of
administration bills in process, so when one seems to be non-
controversial, the intent is to give committee members the
opportunity to move it right away. He asked Representative
Kaufman whether he would like a longer amendment deadline on HB
111.
REPRESENTATIVE KAUFMAN said that he had questions about
radiation safety which may take longer than overnight to find
out.
CO-CHAIR FIELDS responded that if there are still questions, the
committee can return to HB 111 later.
[HB 151 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 111 FN - DCCED, 3.26.21.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 111 |
| HB 111 v. A.PDF |
HL&C 3/29/2021 3:15:00 PM |
HB 111 |
| HB 111 FN - DHSS, 3.26.21.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 111 |
| HB 111 Presentation 3.27.2020.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 111 |
| HB 111 Supporting Document - Oral Health and Well-being in the U.S..pdf |
HL&C 3/29/2021 3:15:00 PM SFIN 4/21/2022 9:00:00 AM |
HB 111 |
| HB 111 FAQ Document.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 111 |
| HB 111 v. A Sponsor Statement.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 111 |
| HB 111 v. A Sectional Analysis.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 111 |
| HB 151 v. B.PDF |
HL&C 3/29/2021 3:15:00 PM |
HB 151 |
| HB 151 Sponsor Statement.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 151 |
| HB 151 Sectional Analysis.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 151 |
| HB 151 FN, DOLWD 3.26.21.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 151 |
| Supporting Document - UI General Information Brochure.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 151 |
| Supporting Document - Wage Replacement Data, DOLWD.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 151 |
| HB 111 Letters of Support Received as of 3.27.21.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 111 |
| Supporting Document - UI Claims, DOLWD.pdf |
HL&C 3/29/2021 3:15:00 PM |
HB 151 |