Legislature(2017 - 2018)HOUSE FINANCE 519

02/08/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 213(FIN) Out of Committee
Moved CSHB 142(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 142                                                                                                            
     "An Act relating to unemployment insurance benefits;                                                                       
     increasing the maximum weekly unemployment insurance                                                                       
    benefit rate; and providing for an effective date."                                                                         
1:34:44 PM                                                                                                                    
Co-Chair Foster  reported that  the bill  was last  heard on                                                                    
February 2,  2018 at  which time  the committee  took public                                                                    
testimony.  There was  one amendment  that would  be offered                                                                    
for the bill. He invited testifiers to the table.                                                                               
KENDRA, KLOSTER,  STAFF, REPRESENTATIVE CHRIS  TUCK, relayed                                                                    
Representative Tuck's  apologies for  not being  present. He                                                                    
was chairing another committee  currently. She was available                                                                    
for questions.                                                                                                                  
Representative  Wilson  understood  the amounts  were  being                                                                    
changed  to  be  closer  to  the  fiftieth  percentile.  She                                                                    
wondered why the scale stopped at $59,500.                                                                                      
PATSY WESCOTT, CHIEF OF  UNEMPLOYMENT INSURANCE, DIVISION OF                                                                    
EMPLOYMENT AND  TRAINING SERVICES,  DEPARTMENT OF  LABOR AND                                                                    
WORKFORCE  DEVELOPMENT,  explained  that the  current  scale                                                                    
determined the  amount at which the  department stopped. The                                                                    
scale  increased  the  benefit  in  $2  increments,  and  it                                                                    
increased  the   qualifying  base   period  wages   in  $250                                                                    
increments.  The  department  stopped   the  scale  when  it                                                                    
reached  $510,  approximately  50  percent  of  the  state's                                                                    
average weekly wage.                                                                                                            
Representative Wilson  asked about the  indeterminate fiscal                                                                    
note. The  estimated cost  difference, had  it been  done in                                                                    
2017, was $456,600. In order  to determine the state's share                                                                    
of increase, she wondered if  she would calculate 76 percent                                                                    
of $456,600. Ms. Wescott responded  that the fiscal note was                                                                    
prepared by the  Office of Management and  Budget (OMB). She                                                                    
thought it  would be  better to  have a  representative from                                                                    
OMB speak to the fiscal note.                                                                                                   
1:37:29 PM                                                                                                                    
CAROLINE SCHULTZ,  POLICY ANALYST, OFFICE OF  MANAGEMENT AND                                                                    
BUDGET, introduced  herself and asked  Representative Wilson                                                                    
to repeat her question.                                                                                                         
Representative  Wilson  relayed  that the  fiscal  note  was                                                                    
indeterminate because the state did  not know what the wages                                                                    
would be  or who would  qualify. She supposed it  was merely                                                                    
an estimate. Again,  she referred to the  cost difference of                                                                    
$456,600.   She   asked    for   clarification   about   the                                                                    
Ms.  Schultz  responded  that  the   state  paid  for  state                                                                    
employee unemployment  insurance (UI) claims  by associating                                                                    
a  rate   with  every   state  employee.   The  unemployment                                                                    
insurance rate  was .4 percent  which went into  the working                                                                    
reserve account. The state paid  out terminal leave cash-ins                                                                    
and UI claims from the  terminal leave account. The fund was                                                                    
underwritten  by the  .4 percent  which  came from  personal                                                                    
services. She  explained that about  50 percent  of personal                                                                    
services  costs were  undesignated general  funds (UGF),  36                                                                    
percent were  designated general funds (DGF),  and the other                                                                    
14  percent  were  federal  funds.  She  continued  that  of                                                                    
$456,600,  about  $228,000 was  UGF,  $164,000  was DGF  and                                                                    
other,  and  $64,000   were  federal  funds.  Representative                                                                    
Wilson  asked  her  to  restate   her  answer.  Ms.  Schultz                                                                    
repeated the figures.  Representative Wilson appreciated the                                                                    
Representative Grenn asked when  the weekly benefit had been                                                                    
increased last.  Ms. Wescott responded effective  January 1,                                                                    
2009.  Representative   Grenn  asked   if  there   had  been                                                                    
automatic  adjustments  every  year. Ms.  Wescott  responded                                                                    
that  the  second  portion  of  the  bill  would  allow  for                                                                    
automatic  increases  moving forward.  Representative  Grenn                                                                    
referred to  a note he  had from  the previous year  that 36                                                                    
states  had  automatic  adjustments.  He  wondered  if  that                                                                    
number had  changed. Ms. Wescott  responded that  the number                                                                    
was still 36.                                                                                                                   
Vice-Chair  Gara   understood  why   the  fiscal   note  was                                                                    
indeterminate  and  was  okay  with  leaving  it  that  way.                                                                    
However, he thought  there might be a problem at  the end of                                                                    
the  year because  of no  budget money  being allocated  for                                                                    
what the state knew would  be approximately $228,000 of UGF.                                                                    
He suggested  there would be a  $230,000 cost at the  end of                                                                    
the year.                                                                                                                       
Co-Chair  Foster  indicated  that the  one  amendment  being                                                                    
offered was brought to the committee by the bill sponsor.                                                                       
1:42:17 PM                                                                                                                    
Co-Chair Foster MOVED to ADOPT Amendment 1 (copy on file):                                                                      
     Page 9, line 13:                                                                                                           
          Delete "2019"                                                                                                         
          Insert "2020"                                                                                                         
     Page 9, line 28:                                                                                                           
          Delete "2018"                                                                                                         
          Insert "2019"                                                                                                         
Co-Chair Foster reviewed the amendment.                                                                                         
There being NO OBJECTION, Amendment 1 was ADOPTED.                                                                              
Co-Chair Seaton  was not comfortable with  the indeterminate                                                                    
fiscal note. Fiscal  notes were combined into  the budget as                                                                    
appropriations.  Without  an  amount,   no  money  would  be                                                                    
appropriated for the bill if it  were to pass. He was unsure                                                                    
how to handle the matter.                                                                                                       
Co-Chair Foster would take an  at ease after Vice-Chair Gara                                                                    
reviewed the fiscal note.                                                                                                       
Vice-Chair  Gara reported  that  HB 142,  version  U, had  2                                                                    
fiscal  notes. The  first  was  a zero  fiscal  note by  the                                                                    
Department of  Labor and  Workforce Development  (DLWD). The                                                                    
appropriation  was unemployment  and  training services  and                                                                    
the   allocation  was   unemployment   insurance.  The   OMB                                                                    
component number  was 2276. The  second fiscal note  was the                                                                    
indeterminate  fiscal  note  by   OMB  that  had  just  been                                                                    
discussed. It reached  across all of the  departments in the                                                                    
state and had an OMB component number of 0.                                                                                     
Co-Chair   Foster   invited   Kelly  Cunningham   from   the                                                                    
Legislative Finance Division (LFD) to the table.                                                                                
1:46:05 PM                                                                                                                    
KELLY  CUNNINGHAM,  ANALYST, LEGISLATIVE  FINANCE  DIVISION,                                                                    
responded  that because  increasing  the  UI benefits  would                                                                    
touch all allocations,  she did not believe there  was a way                                                                    
to  generate  a  fiscal  note  that  would  represent  every                                                                    
allocation in  the state.  The Legislative  Finance Division                                                                    
worked with  OMB and DLWD  on the fiscal note  and concluded                                                                    
that it made  sense to use "various" and for  the note to be                                                                    
indeterminate  as long  as  an amount  was  included in  the                                                                    
Vice-Chair Gara asked  if the normal course would  be to add                                                                    
the funds as  a statewide appropriation when  the budget was                                                                    
reconciled at  the end of  the year. Ms.  Cunningham replied                                                                    
that there  would not be  an appropriation in  the operating                                                                    
bill. The costs  would not be seen, as they  would be spread                                                                    
throughout the agencies and rolled  in with all of the other                                                                    
benefits that  went into salary adjustment  increases in the                                                                    
following year.                                                                                                                 
Vice-Chair  Gara was  comfortable  with the  bill and  would                                                                    
support it.  However, he did  not want  the state to  lose 2                                                                    
employees  because  of  the  lack  of  a  fiscal  note.  Ms.                                                                    
Cunningham  noted  that there  would  not  be  a loss  of  2                                                                    
employees  within  DLWD because  the  cost  would be  spread                                                                    
throughout the state agencies.                                                                                                  
Co-Chair  Foster   asked  Ms.   Cunningham  to   repeat  her                                                                    
response, as  Co-Chair Seaton did  not hear her  answer. Ms.                                                                    
Cunningham  explained that  because the  increase in  the UI                                                                    
benefits would  touch all allocations throughout  the state,                                                                    
there would not  be an efficient way of  generating a fiscal                                                                    
note. The  "various" indeterminate  note made sense  as long                                                                    
as the estimated amount was in the analysis.                                                                                    
Representative  Wilson  asked  when   the  bill  would  take                                                                    
effect.  Ms.  Cunningham replied  it  would  take effect  in                                                                    
January 2019. It would impact half  of the FY 19 budget. The                                                                    
estimated amount for  FY 19 would be $115,000,  and it would                                                                    
be $230,000  in the out years  starting in FY 20.  She noted                                                                    
it would be automatic.                                                                                                          
Representative  Guttenberg   wanted  reassurance   that  the                                                                    
indeterminate fiscal note would not  end up as a negative in                                                                    
the budget.  Ms. Cunningham understood that  the costs would                                                                    
get  rolled in  after  the  fact. Representative  Guttenberg                                                                    
clarified  that   the  cost  would  be   added  rather  than                                                                    
subtracted after  the fact. Ms. Cunningham  responded, "That                                                                    
is correct."                                                                                                                    
Co-Chair  Seaton  confirmed  that the  legislature  had  the                                                                    
ability  to do  a  fiscal note  in  conference committee  if                                                                    
necessary. He was comfortable moving the bill.                                                                                  
Co-Chair  Seaton  MOVED to  report  CSHB  142 (FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
There being NO OBJECTION, it was so ordered.                                                                                    
CSHB  142 (FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass"  recommendation and  with a  new zero  fiscal note  by                                                                    
DLWD and with a new  indeterminate fiscal note by the Office                                                                    
of the Governor.                                                                                                                
1:52:25 PM                                                                                                                    
AT EASE                                                                                                                         
1:56:25 PM                                                                                                                    

Document Name Date/Time Subjects
HB 142 Testimony.pdf HFIN 2/8/2018 1:30:00 PM
HB 142
HB 213 Letter to House Finance Co-Chairs.pdf HFIN 2/8/2018 1:30:00 PM
HB 213
HB 142 Amendment #1 Foster.pdf HFIN 2/8/2018 1:30:00 PM
HB 142
HB 213 Letter to House Finance Co-Chairs.pdf HFIN 2/8/2018 1:30:00 PM
HB 213
HB 213 Amendment 1 Gara.pdf HFIN 2/8/2018 1:30:00 PM
HB 213
HB142 Support Document - Support Letters 2.7.18.pdf HFIN 2/8/2018 1:30:00 PM
HB 142
HB 213 - DOR 10yr what if payout.pdf HFIN 2/8/2018 1:30:00 PM
HB 213
DOR Response to Amendments to HB 213 2-14-2018.pdf HFIN 2/8/2018 1:30:00 PM
HB 213
HFSC Follow Up Public Libraries Receiving OWL Support in FY2018.pdf HFIN 2/8/2018 1:30:00 PM
DEED Response Qs HFIN
HFSC Follow Up FY2018 School BAG Awards by School.pdf HFIN 2/8/2018 1:30:00 PM
DEED Response Qs HFIN
HFSC Follow Up FY2017 E-Rate Overview.pdf HFIN 2/8/2018 1:30:00 PM
DEED Response Qs HFIN
HFSC Follow Up FY15-FY18 Funding by District.pdf HFIN 2/8/2018 1:30:00 PM
DEED Response Qs HFIN