Legislature(2013 - 2014)BARNES 124

03/18/2013 03:15 PM House LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 3:15 pm on 3/20/13 --
+= HB 76 UNEMPLOYMENT; ELEC. FILING OF LABOR INFO TELECONFERENCED
Moved CSHB 76(L&C) Out of Committee
+= HB 112 REPEAL FILM PRODUCTION TAX CREDIT TELECONFERENCED
Heard & Held
<Bill Heard & Held Over to 3/20/13>
+ SB 23 AIDEA: LNG PROJECT; DIVIDENDS; FINANCING TELECONFERENCED
Moved HCS CSSB 23(L&C) Out of Committee
         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.                                                                                                                            

Document Name Date/Time Subjects
HB76 Draft Proposed Amendment ver A.3-Herron.pdf HL&C 3/18/2013 3:15:00 PM
HB 76
HB76 Draft Proposed Amendment ver A.4-Herron.pdf HL&C 3/18/2013 3:15:00 PM
HB 76
HB76 Draft Conceptual Amendment-Olson.pdf HL&C 3/18/2013 3:15:00 PM
HB 76
HB112 Opposing Document-Article - Alaska Magazine.pdf HL&C 3/18/2013 3:15:00 PM
HB 112
HB112 Opposing Document-Assorted emails and letters 3-16-2013.pdf HL&C 3/18/2013 3:15:00 PM
HB 112
SB23 ver C.pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Hearing Request.pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Fiscal Note DCCED-AIDEA-03-05-13 (3).pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Fiscal Note DCCED-AIDEA-03-05-13 (2).pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Supporting Document-AIDEA Project Analysis Process 2-26-2013.pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Supporting Document-AIDEA-AEA Policy Presentation 2-28-2013.pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Supporting Document-Interior Energy Plan.pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Supporting Document-Assorted Letters of Support-03-14-2013.pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Draft Proposed HL&C CS ver O.pdf HL&C 3/18/2013 3:15:00 PM
SB 23
HB76 Draft Proposed HL&C CS ver N.PDF HL&C 3/18/2013 3:15:00 PM
HB 76
HB76 Draft Proposed HL&C CS ver N.PDF HL&C 3/18/2013 3:15:00 PM
HB 76
Draft Conceptual Amendment #2 to fix version N.pdf HL&C 3/18/2013 3:15:00 PM
HB 76
SB23 Opposing Documents-DPA FY05-FY14 Budget History Graphs presented by Rep Reinbold.pdf HL&C 3/18/2013 3:15:00 PM
SB 23
SB23 Opposing Documents-DPA benefits by Census area presented by Rep. Reinbold.pdf HL&C 3/18/2013 3:15:00 PM
SB 23