Legislature(2017 - 2018)BARNES 124

03/29/2017 03:15 PM LABOR & COMMERCE

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Audio Topic
03:19:11 PM Start
03:19:42 PM Confirmation Hearing(s)
03:25:14 PM HB126
03:42:27 PM HB142
04:34:22 PM HB103
05:16:10 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 142 UNEMPLOYMENT COMPENSATION BENEFITS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ HB 126 ORGANIZED MILITIA: WORKERS COMPENSATION TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ Confirmation Hearings: TELECONFERENCED
- Board of Certified Direct-Entry Midwives
- Board of Pharmacy
- Board of Professional Counselors
+= HB 103 OPTOMETRY & OPTOMETRISTS TELECONFERENCED
Heard & Held
-- Public Testimony --
           HB 142-UNEMPLOYMENT COMPENSATION BENEFITS                                                                        
                                                                                                                                
3:42:27 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
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."                                                                             
                                                                                                                                
3:42:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK described  HB 142 by stating  that it relates                                                               
to  the effectiveness  of  Alaska's  Unemployment Insurance  (UI)                                                               
program.  He continued as follows:                                                                                              
                                                                                                                                
     The   national  unemployment   insurance  program   was                                                                    
     initially created  in 1935 by the  Social Security Act.                                                                    
     Congress  chose   to  create   a  national   system  of                                                                    
     compensation  for   unemployed  workers  based   on  an                                                                    
     insurance  model rather  than  an entitlement  program.                                                                    
     This  insurance  model  has worked  well  for  over  80                                                                    
     years.    As  with  any other  insurance  program,  the                                                                    
     objective is to underwrite  and identify potential loss                                                                    
     incurred by  a small percentage of  the insured through                                                                    
     accumulation  of funds  collected from  the group  as a                                                                    
     whole.  The loss insured by  the program is the loss of                                                                    
     wages by unemployed workers.   The premiums required to                                                                    
     cover  this  potential loss  are  in  most states  paid                                                                    
     solely by the employer; although  in Alaska the cost is                                                                    
     shared by the  employer and the worker.  We  are one of                                                                    
     three states  in the  nation that  does this.   Alaskan                                                                    
     employers carry 73  percent of the direct  cost and the                                                                    
     workers pay  27 percent of these  costs through payroll                                                                    
     taxes.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  TUCK  stated  that   as  with  any  program  that                                                               
compensates individuals while they are  not working, there may be                                                               
concerns about  providing a disincentive  for returning  to work.                                                               
He said, "In  striving to provide sufficient  temporary income to                                                               
enable workers to bridge the  gap between jobs while meeting non-                                                               
deferrable   expenses  without   that   disincentive,  the   U.S.                                                               
Department  of  Labor encourages  a  target  of 50  percent  wage                                                               
replacement to try to balance that  out."  He explained that wage                                                               
replacement measures  the state's  average weekly  benefit amount                                                               
as a percent  of the average weekly wage.   According to the most                                                               
recent figures published by the  U.S. Department of Labor, Alaska                                                               
ranks last in  wage replacement at 28.8  percent, forty-fourth in                                                               
the  nation  in terms  of  the  average  weekly benefit  paid  to                                                               
unemployed workers  - $252 per  week, and  39th in the  nation in                                                               
terms  of the  maximum weekly  benefit amount  of $370  per week.                                                               
Benefit amounts are  based on the amount of wages  a worker earns                                                               
during a  prescribed base period.   Workers with  higher earnings                                                               
whose loss  of work has a  higher financial impact can  receive a                                                               
higher benefit  amount.  Representative  Tuck related  that under                                                               
Alaska's current statute, the maximum  benefit amount that can be                                                               
paid  to workers  who have  earned $42,000  or more  is $370  per                                                               
week, regardless whether the amount  of wages lost was $42,000 or                                                               
$100,000  or  $200,000 per  year.    The current  maximum  weekly                                                               
benefit  amount  represents  approximately   36  percent  of  the                                                               
average  weekly  wage   of  $1,020  in  Alaska.     The  proposed                                                               
legislation seeks to  raise the maximum weekly  benefit amount in                                                               
Alaska to an  amount that is roughly one-half  the average weekly                                                               
rate  in the  state  for  2017, up  to  $510  per week  effective                                                               
January 1, 2018.                                                                                                                
                                                                                                                                
REPRESENTATIVE  TUCK  stated  that   the  second  intent  of  the                                                               
proposed bill  is to tie  future increases to the  maximum weekly                                                               
benefit amount to a percentage of  the average weekly wage, as is                                                               
the  case  in  36  other  states.   This  would  allow  the  wage                                                               
replacement  offered  by  the  program   to  rise  based  on  the                                                               
relationship to the  wages that are being replaced.   He said the                                                               
estimated cost to  employers, for each employee  earning the full                                                               
taxable  wage  base  of  approximately  $38,000,  would  increase                                                               
gradually  beginning in  2019 [until  it  reaches] an  additional                                                               
$233  per employee  in  2023.   He  indicated  this  is over  the                                                               
baseline forecast, and  the proposed bill would  not increase the                                                               
minimum wage  benefit assessment.  The  estimated additional cost                                                               
to employees earning  the full taxable wage base in  2023 will be                                                               
$31  over the  baseline  forecast.   Representative Tuck  advised                                                               
that after December  31, 2019, the maximum  weekly benefit amount                                                               
would be calculated each year based  on 50 percent of the average                                                               
weekly wage  in the  state.   He said  tying future  increases to                                                               
increases in the average weekly wage  over time would result in a                                                               
less dramatic  change to employer  taxes than what the  state has                                                               
experienced in the past when  the maximum benefit amount remained                                                               
static and  became less and  less adequate  over time, as  it has                                                               
since the last increase in 2009.                                                                                                
                                                                                                                                
3:47:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  said  he  had   a  number  of  letters  of                                                               
opposition from individuals concerned  about the impact that this                                                               
additional cost increment will have  on small businesses during a                                                               
time  of economic  challenge and  recession.   He asked  what the                                                               
actual cost would be to elevate this benefit.                                                                                   
                                                                                                                                
3:47:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK said  the estimated  cost  to employers  for                                                               
each   employee   earning  the   full   taxable   wage  base   of                                                               
approximately  $38,000   will  increase   gradually  and   be  an                                                               
additional $233 per employee by the year 2023.                                                                                  
                                                                                                                                
REPRESENTATIVE BIRCH asked  if it would be $233  per employee per                                                               
year.                                                                                                                           
                                                                                                                                
REPRESENTATIVE TUCK said yes, that  it would be $233 per employee                                                               
once it reaches its full maximum in 2023.                                                                                       
                                                                                                                                
REPRESENTATIVE BIRCH  pointed out  that the  bill refers  to base                                                               
period  wages and  a  weekly  benefit amount,  and  he asked  for                                                               
clarification on the duration of a base period.                                                                                 
                                                                                                                                
REPRESENTATIVE TUCK  said that he  believed it is  the qualifying                                                               
period  for someone  to  receive UI  benefits and  that  it is  a                                                               
period of one year.                                                                                                             
                                                                                                                                
REPRESENTATIVE BIRCH, referring to the  table in HB 142, asked if                                                               
someone with  a base period  of $2,500  to $2,700 per  year would                                                               
then be entitled to a $56 per week benefit.                                                                                     
                                                                                                                                
REPRESENTATIVE TUCK  answered yes.   He said that for  every $250                                                               
increase  in  annual  base  period   wages,  the  weekly  benefit                                                               
increases  $2.   However, again  referring  to the  table in  the                                                               
bill, he  pointed out that  HB 142  would not change  UI benefits                                                               
for those at lower incomes.  He  said the change HB 142 brings to                                                               
the current statute is that of  an increase in the weekly benefit                                                               
for those  at higher  income levels,  and this  could be  seen on                                                               
page 7 of  the bill.  He  said that HB 142 would  allow for those                                                               
who earn more and have  contributed more to the insurance program                                                               
to be  able to receive  a larger  proportion of their  annual pay                                                               
than what they  would receive now.  It would  also bring benefits                                                               
closer  to the  recommended  average of  the  U.S. Department  of                                                               
Labor, as well  as making Alaska current with 36  other states in                                                               
the country.   Representative Tuck said Alaska  has more seasonal                                                               
workers than any other state  in the country, citing the seasonal                                                               
industries of fishing, tourism, and  construction, as well as the                                                               
labor that occurs  on the North Slope and in  mining.  He stated,                                                               
"We want to make sure that  families are able to weather out some                                                               
of those ... tough economic times ...."                                                                                         
                                                                                                                                
3:51:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH, referencing page 8  of the bill, asked what                                                               
the duration  of a benefit  would be in  the case of  a fisherman                                                               
working  three  months  and  earning  $50,000  annually,  with  a                                                               
corresponding benefit of approximately $20,000.                                                                                 
                                                                                                                                
REPRESENTATIVE  TUCK  requested  to  bring  Ed  Flanagan  of  the                                                               
Department of  Labor and Workforce Development  to the discussion                                                               
to  explain the  number of  weeks someone  would be  qualified to                                                               
receive a benefit.                                                                                                              
                                                                                                                                
3:51:59 PM                                                                                                                    
                                                                                                                                
ED FLANAGAN,  Director, Central Office, Division  of Employment &                                                               
Training Services,  Department of  Labor &  Workforce Development                                                               
(DLWD),  responding to  the question  from Representative  Birch,                                                               
said  fishermen are  not covered  under UI.   He  added that  the                                                               
maximum  benefit for  a  seafood processing  worker  would be  26                                                               
weeks.  He also said that in  the past, a claim could be extended                                                               
under a federal  extended benefit program, which would  add up to                                                               
an additional  13 weeks of benefits.   In the 1980s,  the program                                                               
was changed  to address  claims from  workers with  earnings that                                                               
occurred  in  only  one  quarter.     Mr.  Flanagan  offered  his                                                               
understanding that  at least  10 percent of  earnings occur  in a                                                               
second quarter.   In  addition, there  is "a  differential ratio"                                                               
utilized to determine  the length of the benefit  period based on                                                               
how  well earnings  were distributed  over the  entire year.   He                                                               
said that  earnings occurring in  just two quarters  would result                                                               
in a maximum benefit period of 18 weeks rather than 26 weeks.                                                                   
                                                                                                                                
REPRESENTATIVE BIRCH said  the concern voiced to him  was that of                                                               
the cost  impact on an  employer and "certainly not  a reflection                                                               
on the  individuals involved."  He  also said he wasn't  aware of                                                               
the mechanics of the system, for  example, how it would prevent a                                                               
situation  where someone  could work  for only  three months  and                                                               
then "basically kick back for nine months."                                                                                     
                                                                                                                                
MR.  FLANAGAN said  that such  a situation  was not  possible and                                                               
that he  would not presume to  tell an employer at  any time, let                                                               
alone in  troubled times, that  $233 per employee five  years out                                                               
is not  something they  should be concerned  about.   However, he                                                               
would encourage employers to think  about how UI benefits support                                                               
many  communities, especially  those  that  have strong  seasonal                                                               
workforces.   He noted that  he feels  we lost something  when we                                                               
went away from  paper payroll checks, as people  would cash those                                                               
checks after hours at a time  when there were limited banking and                                                               
credit card  options.   He summarized by  saying he  thinks there                                                               
are  employers that  understand  UI benefits  not  only help  the                                                               
worker but also insure the community.                                                                                           
                                                                                                                                
3:54:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  Representative  Tuck to  explain                                                               
his  earlier statement,  which indicated  Alaska is  one of  only                                                               
three states that does or does not "do something."                                                                              
                                                                                                                                
REPRESENTATIVE TUCK  responded that Alaska  is one of  only three                                                               
states   where  employees   contribute   to  their   unemployment                                                               
insurance program.                                                                                                              
                                                                                                                                
REPRESENTATIVE JOSEPHSON then made the  point that in addition to                                                               
Alaska's  [UI  benefit]  rates  not being  anything  close  to  a                                                               
livable  wage,  the state  is  one  of  only three  that  require                                                               
employees to contribute to their UI program.                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  added that  he did not  recall the  names of                                                               
the  three  other states,  but  that  of  the three,  Alaska  has                                                               
employee contribution rates that are significantly greater.                                                                     
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked why the  sponsor of the  bill did                                                               
not want to [increase] the lower wage earner's rates.                                                                           
                                                                                                                                
3:55:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK said  that the bill was  focused on providing                                                               
UI  benefits to  higher income  wage  earners and,  in doing  so,                                                               
balancing   the  increase   in  benefits   with  the   associated                                                               
additional cost to the employee.   He emphasized his concern that                                                               
Alaska   retain  skilled   workers  and   support  industry   and                                                               
employers, while sharing the burden "on both sides."                                                                            
                                                                                                                                
3:56:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL asked  if the  annual  salary is  calculated                                                               
based on a weekly salary extrapolated over 52 weeks.                                                                            
                                                                                                                                
3:56:25 PM                                                                                                                    
                                                                                                                                
MR. FLANNAGAN answered no; it  is based on actual earnings during                                                               
the base  period.  He  gave the example  that if someone  filed a                                                               
new claim  this week, then all  the wages for the  period October                                                               
1, 2015, to September 30, 2016,  would be considered.  If a claim                                                               
was  filed  next week,  when  it  would  be  a new  quarter,  the                                                               
earnings period would  be the calendar year 2016.   He said there                                                               
is no averaging or smoothing; and  that it is the actual earnings                                                               
that are utilized.                                                                                                              
                                                                                                                                
REPRESENTATIVE WOOL said that the  reason he asked was because he                                                               
knows that  some people work  seasonally and  [become unemployed]                                                               
following a  season of  high earnings, and  he wanted  to confirm                                                               
that  someone who,  for example,  earned  $1,000 per  week for  3                                                               
months  (for a  total of  $12,000) would  fall under  the $12,000                                                               
category and not the $48,000 or $52,000 category.                                                                               
                                                                                                                                
MR. FLANNAGAN stated that's correct.                                                                                            
                                                                                                                                
REPRESENTATIVE WOOL  asked for confirmation that  under his prior                                                               
example,  the UI  benefit would  be  $132 per  week, even  though                                                               
earnings were $1,000 per week for one quarter.                                                                                  
                                                                                                                                
MR. FLANAGAN stated  that this is correct.  He  added that if the                                                               
beneficiary had dependents, then he/she  would be eligible for an                                                               
additional $24 per week for up to three children.                                                                               
                                                                                                                                
3:58:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD pointed  out  that the  existing                                                               
statute describes the  eligible individual, and then  asked how a                                                               
benefit is calculated for a family.                                                                                             
                                                                                                                                
MR. FLANAGAN  stated unemployment insurance is  based strictly on                                                               
the  individual,  with  the  possibility  of  a  dependent  child                                                               
allowance of  $24 per child  to maximum of  three.  He  said that                                                               
this has been in  statute for some time.  He  added that there is                                                               
no measure in any system nationwide regarding family income.                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD asked what  the fiscal note might                                                               
be, noting that it was shown as zero.                                                                                           
                                                                                                                                
MR. FLANAGAN said that the  fiscal note reflects the agency cost,                                                               
and in this case, it is  de minimis, if calculable.  He indicated                                                               
that a change  in benefit amount does not change  the cost to the                                                               
agency.   He said if  Representative Sullivan-Leonard  was asking                                                               
for  the   cost  to  individuals   or  businesses,  it   was  his                                                               
understanding that this was never reflected in the fiscal note.                                                                 
                                                                                                                                
3:59:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  asked if  there  was  a way  to                                                               
quantify what  the financial impact is  going to be, not  only to                                                               
the  department but  also what  the benefits  would show  for the                                                               
individual  as well  as for  one, two,  or three  children.   She                                                               
asked if there was a way to calculate what it would be annually.                                                                
                                                                                                                                
MR.  FLANAGAN   said  he  could   provide  the   agency's  annual                                                               
projections on  what it  expects to  pay.   He said  the benefits                                                               
paid out have never been considered relevant to the fiscal note.                                                                
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD said  that she  was looking  for                                                               
those  dollar amounts,  especially since  there is  a request  to                                                               
increase  the unemployment  insurance for  both the  employee and                                                               
the employer.                                                                                                                   
                                                                                                                                
MR. FLANAGAN said  it was those dollar amounts that  were used to                                                               
come up  with the estimates  for 2022 for additional  cost versus                                                               
"doing nothing."   He said  that they  have run those  numbers to                                                               
figure out a  "phasing up" over five years to  an additional $233                                                               
per  employee for  the  employer.   He noted  that  this was  for                                                               
employees making the  $38,000 or $39,000 taxable wage  base.  The                                                               
employer's and the employee's contributions  stop there.  For the                                                               
employee it is an additional $31  per year.  These are determined                                                               
from the  estimate of  the change  in the  benefits that  will be                                                               
paid.  He said the agency can provide this information.                                                                         
                                                                                                                                
4:02:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH pointed  out  that HB  142  would create  a                                                               
second, and therefore additional,  increase under the UI program,                                                               
as  there was  an earlier  bill  that established  training as  a                                                               
benefit.  He then asked if  there are any other existing parts or                                                               
if we would see any other new additions to the UI program.                                                                      
                                                                                                                                
4:03:08 PM                                                                                                                    
                                                                                                                                
MR.  FLANAGAN  said that  he  was  not  aware  of any  others  or                                                               
proposals  for  any  others.    He said  that  the  two  training                                                               
programs  Representative Birch  was  referring to  are the  State                                                               
Training  and Employment  Program  (STEP) and  the Technical  and                                                               
Vocational  Education Program  (TVEP).   He  stated  that in  the                                                               
past,   he  had   misunderstood   these   programs  by   thinking                                                               
incorrectly that because  there is a diversion  from the employee                                                               
share, it  is an additional cost  to the employee.   He explained                                                               
that  the cost  of  the program  is determined  on  a 73  percent                                                               
employer/27 percent  employee split, and  it is after  that split                                                               
that the  diversion is made.   He  said that employees  don't pay                                                               
more except over time in the  long run, because some money is not                                                               
coming out  of the trust fund  that otherwise would.   He said he                                                               
could provide even more detailed  information if requested, as he                                                               
had a staff member from research and analysis on hand.                                                                          
                                                                                                                                
CHAIR KITO said additional information  would not be necessary as                                                               
the issue was not related to the bill.                                                                                          
                                                                                                                                
4:04:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP directed  attention to Section 2,  on page 9                                                               
of HB  142, and asked  what the maximum  benefit would be  for an                                                               
individual that makes $100,000 per year.                                                                                        
                                                                                                                                
4:04:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TUCK  offered his  understanding that  the maximum                                                               
benefit would be  $510, because the benefits "max out"  at a base                                                               
income of  $59,500.  However,  he pointed  out that Section  2 is                                                               
"kind  of a  self-evaluating factor"  that he  mentioned earlier,                                                               
which  would  allow the  unemployment  benefit  to update  itself                                                               
based on 50 percent of the average income.                                                                                      
                                                                                                                                
4:05:17 PM                                                                                                                    
                                                                                                                                
MR. FLANAGAN clarified  that the current weekly  benefit is $370,                                                               
and under the  proposed bill it would increase to  $510. He added                                                               
that "at  the lower end  it's much closer  to 50 percent  than it                                                               
is, because  it starts  at that $2,500,  with a  benefit amount."                                                               
He  explained  that  currently  an  unemployed  worker  who  made                                                               
$42,000 in his/her base year receives  the same benefit as a laid                                                               
off worker making  $84,000.  Both workers  would have contributed                                                               
the  same amount,  "because  $39,000  is where  it  cuts off  for                                                               
contributions."   He said that  the benefits are "out  of whack,"                                                               
because  the person  with  the  higher income  is  going to  have                                                               
higher expenditures.                                                                                                            
                                                                                                                                
REPRESENTATIVE KNOPP  said that  his interpretation of  Section 2                                                               
was that the maximum benefit of  $510 would increase at a rate of                                                               
$2 for every $250 increase in  earnings greater than $59,500.  He                                                               
provided  a   hypothetical  example  of  an   individual  earning                                                               
$100,000 and  asked if  his maximum  benefit calculation  of $834                                                               
for  the individual  (based on  the  language in  Section 2)  was                                                               
correct.                                                                                                                        
                                                                                                                                
4:06:50 PM                                                                                                                    
                                                                                                                                
MR.  FLANAGAN said  that he  understood  how Section  2 might  be                                                               
interpreted in  that way; however,  the annual income  of $59,500                                                               
is a cap, and income greater  than $59,500 is not considered.  He                                                               
explained  that Section  2  would provide  an  adjustment to  the                                                               
benefit  schedule by;  extending  it out  beyond  $59,500 if  the                                                               
average annual  wage for the state  increases.  He added  that he                                                               
does  not  expect  any  adjustments  in  the  schedule  to  reach                                                               
$100,000 in his lifetime.  He  again acknowledged that this was a                                                               
confusing element of the bill.                                                                                                  
                                                                                                                                
REPRESENTATIVE KNOPP  reiterated his interpretation  that Section                                                               
2  states  that  weekly  benefits  would  increase  based  on  an                                                               
"individual's base period wages," not  based on changes in "state                                                               
wages on an average."                                                                                                           
                                                                                                                                
MR. FLANAGAN  reemphasized that  no one  would receive  a benefit                                                               
greater than that listed for  an income of $59,500; in subsequent                                                               
years,  if the  average annual  wage  went up,  say $4,000,  then                                                               
"they would  use that column on  the left to calculate  a benefit                                                               
which would go up another $2,000 total in the year."                                                                            
                                                                                                                                
4:08:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  brought  attention   to  the  language  [in                                                               
Section 2],  to which Mr.  Flanagan and Representative  Knopp had                                                               
referred, was  on Page  9, Line  25, and  read:   "the department                                                               
shall determine the  average annual wage paid to  employees".  He                                                               
then asked  for confirmation that  this referred to  the "overall                                                               
state average" and not individual wage.                                                                                         
                                                                                                                                
MR. FLANAGAN  answered that's  correct.   He said  the department                                                               
[reviews the  average annual wage],  which currently  is $53,000.                                                               
The  taxable wage  base is  three-fourths of  the average  annual                                                               
wage.                                                                                                                           
                                                                                                                                
4:09:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   TUCK  brought   the  committee's   attention  to                                                               
language in  [Section 2], subsections  (j) and (h), and  he noted                                                               
that the  language in subsection  (h), [on page 9],  lines 15-17,                                                               
refers  to the  ["average annual  wage"] mentioned  in subsection                                                               
(j).                                                                                                                            
                                                                                                                                
4:09:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked for confirmation of  his understanding                                                               
of the  issue by providing an  example where the average  wage is                                                               
$52,000  or  $1,000  per  week.    He  then  asked  if,  in  this                                                               
situation, benefits under this section  may not exceed 50 percent                                                               
of $1,000 per week or a $500 weekly benefit.                                                                                    
                                                                                                                                
MR. FLANAGAN answered that is correct.                                                                                          
                                                                                                                                
4:10:23 PM                                                                                                                    
CHAIR KITO asked if Mr. Flanagan had any further comment.                                                                       
                                                                                                                                
MR FLANAGAN stated that he would  be available for questions.  He                                                               
added, "It hasn't been done since 2009 ..., and it is past due."                                                                
                                                                                                                                
4:11:11 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 142.                                                                                   
                                                                                                                                
4:11:29 PM                                                                                                                    
                                                                                                                                
AARON  PLIKAT,   President,  Building  and   Construction  Trades                                                               
Council  of  Southcentral  Alaska,   introduced  himself  as  the                                                               
business agent for  Plumbers and Steamfitters, Local  367 and the                                                               
president  of the  Building and  Construction  Trades Council  of                                                               
Southcentral Alaska.   He stated that as the son  of a journeyman                                                               
pipefitter and  someone who has been  in the trade for  22 years,                                                               
he is  knowledgeable about  being out  of work.   He said  he can                                                               
tell firsthand about  the pride a worker feels  when completing a                                                               
project,  as  well as  the  fear  of  the impending  layoff  that                                                               
follows  project completion.    He said  construction has  always                                                               
been  a  path  of  peaks   and  valleys;  when  it's  good,  it's                                                               
fantastic, and  when it's bad,  the span between projects  can be                                                               
months or even  longer.  As a business agent,  he spoke about the                                                               
highly skilled  craftsmen that are  more than willing  to perform                                                               
their  crafts anywhere  under any  circumstances.   These workers                                                               
and all workers  should take some comfort in the  fact that there                                                               
is  a   benefit  for  their  short-term   security  should  their                                                               
employment end suddenly or otherwise.                                                                                           
                                                                                                                                
MR. PLIKAT said  the current benefit is one of  the lowest in the                                                               
country and has  not been adjusted since 2008.   He said the cost                                                               
of living  is increasing  in Alaska.   He  stated support  for an                                                               
adjustment  of  the  state's   unemployment  insurance  from  the                                                               
current  weekly maximum  benefit of  $370 to  the proposed  $510,                                                               
because doing  so will assist  workers by allowing them  the time                                                               
to  find  long  term  quality  employment  again.    He  strongly                                                               
encouraged the committee to support HB 142.                                                                                     
                                                                                                                                
4:13:32 PM                                                                                                                    
                                                                                                                                
DOUG TANSY introduced himself as  a person wearing multiple hats:                                                               
current president of the Fairbanks  Central Labor Council; member                                                               
of  the Alaska  Workforce  Investment Board;  and  member of  the                                                               
Fairbanks Building  and Construction  Trades Council.   He opined                                                               
that  wage  (indisc.)  unemployed or  underemployed  is  critical                                                               
because of the  high rate of seasonal employment  here in Alaska.                                                               
He is  a construction electrician  who served  his apprenticeship                                                               
in Fairbanks and  he has experienced UI benefits first  hand.  He                                                               
is  now a  member of  his local  apprenticeship committee,  which                                                               
oversees the  school and  the apprentices while  they are  in the                                                               
program.                                                                                                                        
                                                                                                                                
MR. TANSY said  the school has invested close to  $50,000 in each                                                               
apprentice by the time each  completes the program.  The benefits                                                               
of the  program are having journeyman-level  workers available to                                                               
safely and  efficiently do high-quality jobs  for contractors and                                                               
to train the next batch of  apprentices that are coming up behind                                                               
them.   He  said that  with low  UI wage  replacement there  is a                                                               
stress on individuals and families,  and sometimes the way out of                                                               
that  stress   is  to  look   for  employment   opportunities  in                                                               
Washington,  Oregon, and  California.   He  said  that when  this                                                               
occurs,  a percentage  of those  who leave  the state  don't come                                                               
back home, which  results in a loss on our  investment, a loss on                                                               
the  investment of  contractors, and  a diminishment  of a  ready                                                               
workforce.    This   scenario  is  a  typical   setting  for  all                                                               
construction trades, not  only the mechanical trades.   Mr. Tansy                                                               
said  the outward  migration during  leaner  times doesn't  cause                                                               
only financial impact  to families; he has seen  it contribute to                                                               
divorce  or  stress  for  children who  must  move  to  different                                                               
schools and  not have in place  the things that are  conducive to                                                               
their  development.    He strongly  encouraged  movement  of  the                                                               
proposed  legislation.   He noted  that the  groups he  mentioned                                                               
today have passed resolutions in support of HB 142.                                                                             
                                                                                                                                
4:16:48 PM                                                                                                                    
                                                                                                                                
BRANDON MCGUIRE expressed  his support for the  bill and provided                                                               
an example of  how it supports the working class,  which not only                                                               
helps  drive  the local  economy  but  also  the economy  of  the                                                               
nation.  He said that he  has a typically employed friend that is                                                               
a construction  worker with the  laborers union.  The  friend and                                                               
his  wife  are expecting  a  child  later  this  year and,  as  a                                                               
seasonal  construction  worker,  Mr. McGuire's  friend  stands  a                                                               
chance of being unemployed in and  around the birth of his child.                                                               
He noted that in a situation  like this, "when Murphy's Law rears                                                               
its head, every little thing helps."                                                                                            
                                                                                                                                
MR. MCGUIRE said  he knows that when a person  is laid off, after                                                               
working  for 1.5  years on  a long  project, unemployment  checks                                                               
don't cover  the bills.   He said Alaska  is such a  great state,                                                               
yet it's  UI benefits are low  compared to those of  other states                                                               
in the country.   Given this, he  said he doesn't see  how a bill                                                               
like this  could see any  opposition, and  he hopes that  it will                                                               
not.   He opined that  Alaska should lead  the way in  support of                                                               
its working-class citizens.                                                                                                     
                                                                                                                                
4:19:03 PM                                                                                                                    
                                                                                                                                
RALPH  KIBBY, Owner,  Chatham Electric  Inc, stated  that Chatham                                                               
Electric  Inc is  a statewide  electrical  contractor that  works                                                               
primarily  in Southeast  Alaska.   He  stated  that his  business                                                               
provides  the first  response for  many communities  in Southeast                                                               
Alaska and  other areas, for  power outages and emergencies.   He                                                               
said his company  hires highly skilled workers, and  he asked the                                                               
committee  to pass  HB 142  to  retain that  highly skilled  work                                                               
force.   He expressed concerned  about workers leaving  the state                                                               
because  their needs  are not  being  met.   He said  contractors                                                               
spend hundreds  of thousands of dollars  training their employees                                                               
regardless  of   the  five-year  period  required   to  become  a                                                               
journeyman.   At this  point, he  said, whatever  can be  done to                                                               
maintain a  skilled workforce -  "our brain-trust" - is  going to                                                               
help Chatham Electric Inc stay in business.                                                                                     
                                                                                                                                
4:20:42 PM                                                                                                                    
                                                                                                                                
WALTER ROBINSON, International  Brotherhood of Electrical Workers                                                               
(IBEW),  stated that  he feels  the  past and  current UI  weekly                                                               
benefit  amount in  Alaska  is  far too  low.   Alaska's  average                                                               
weekly  benefit amount  ranks  forty-fourth  nationally, yet  the                                                               
state has one of the highest  costs of living.  Having personally                                                               
drawn UI benefits himself, he can  attest to the fact that a $370                                                               
weekly benefit is  not enough.  With this amount  of money, it is                                                               
hard to maintain  a household and put food on  the table with two                                                               
kids and a wife to support.  Alaska  is not a cheap state to live                                                               
in because of  the cost of housing, food,  electricity, and heat.                                                               
Under  the current  price of  oil and  state of  the economy,  he                                                               
said,  jobs  are  decreasing,  and  unemployment  is  increasing.                                                               
Alaskans are going to need help  in this recession to get through                                                               
hard times.                                                                                                                     
                                                                                                                                
MR. ROBINSON  said that he  feels the proposed increase  comes at                                                               
the perfect  time to  ensure Alaskans will  remain in  the state.                                                               
People  on  UI benefits  spend  money  in the  state;  therefore,                                                               
increasing the  maximum weekly benefit  will put more  money into                                                               
the  economy and  help the  business community.   He  stated that                                                               
people  do not  want to  be on  unemployment insurance  as it  is                                                               
stressful not having a job while  trying to pay the bills and put                                                               
food on the  table.  The proposed legislation  bill would relieve                                                               
some  of  the hardship  placed  on  Alaskans during  the  current                                                               
recession and  unemployment.   Mr. Robinson stated  that he  is a                                                               
proud Alaskan but feels rating  forty-fourth in the nation for UI                                                               
benefits  is  not  something  he  is proud  of.    He  urged  the                                                               
committee to move HB 142 and help Alaskans that are suffering.                                                                  
                                                                                                                                
4:22:50 PM                                                                                                                    
                                                                                                                                
LAKE  WILLIAMS, District  Representative, International  Union of                                                               
Operating  Engineers  (IUOE),  Local  302;  President,  Fairbanks                                                               
Building and  Construction Trades  Council, stated that  on March                                                               
15 the council  passed a resolution in support of  HB 142, urging                                                               
the House  to pass the  bill and for  the Senate to  take action.                                                               
He said he would submit that resolution into the record.                                                                        
                                                                                                                                
MR.  WILLIAMS said  as an  apprentice  he relied  on UI  benefits                                                               
while he  was in  school to  help pay  bills, and  when he  was a                                                               
journeyman he relied  on them until the next job  came along.  He                                                               
pointed out  that work has  slowed, with smaller  capital budgets                                                               
and a reduction of  work on the North Slope.   He said that often                                                               
employers  are struggling  to maintain  their workforce;  while a                                                               
lot of them  will find things for workers to  do, they are forced                                                               
to lay people off and then  hope that this skilled workforce will                                                               
not leave the state.  He said  that this is a constant battle for                                                               
employers; they are always worried  about losing skilled workers.                                                               
He said that  [employers] are seeing more and  more people "raise                                                               
the white flag" and move out  of state when they cannot find work                                                               
or  pay  their bills.    Some  of them  come  back  and then  are                                                               
referred to  as "out-of-state workers."   He said that  it's hard                                                               
to  blame these  people  as they  are going  places  where it  is                                                               
cheaper to live, but they are  taking their money with them.  Any                                                               
little bit  [the state] can  do to help workers  and contractors,                                                               
maintain a  workforce, and  assist local  families in  getting by                                                               
until the  next job  comes around  is a  smart thing  to do.   He                                                               
reiterated  his support  for HB  142 and  urged the  committee to                                                               
pass it.                                                                                                                        
                                                                                                                                
4:25:02 PM                                                                                                                    
                                                                                                                                
BRONSON FRYE, Recording Secretary,  South Central Alaska Building                                                               
Trades Council, stated  that he is a  business representative for                                                               
the Painters Union  and is at the meeting to  testify in his role                                                               
as  the  Recording Secretary  of  the  Building and  Construction                                                               
Trades Council  of Southcentral Alaska.   He said he is  in favor                                                               
HB  142 and,  while  many  reasons for  supporting  it have  been                                                               
already articulated,  he thinks  it is  notable that  UI benefits                                                               
have  not been  raised since  2009 and  that the  state's maximum                                                               
weekly  benefit amount  ranks thirty-ninth  in the  country.   He                                                               
pointed out  that the  U.S. Department of  Labor recommends  a 50                                                               
percent  wage  replacement  and  that  HB  142  would  meet  that                                                               
recommendation, increasing  the benefit from the  current maximum                                                               
benefit of $370 to  a maximum of $510.  He  said he believes that                                                               
it  is also  noteworthy that  the State  of Washington's  current                                                               
maximum weekly benefit  is $681, almost double  our $370 benefit.                                                               
A benefit of $510 would bring  Alaska much closer to other states                                                               
in the Pacific Northwest.                                                                                                       
                                                                                                                                
MR. FRYE  opined that when workers  lose their job, it  is a loss                                                               
to not  only the individual  but to the entire  community; having                                                               
adequate  unemployment insurance  benefits lessens  that negative                                                               
impact.  He  pointed out that Alaska is seeing  a downturn in its                                                               
economy and  that if  all the skilled  workers must  move Outside                                                               
for work and stay there, then  the state loses a major investment                                                               
in time,  money, training, and  development of  assets productive                                                               
to Alaska.   He warned against  a situation in which  the economy                                                               
improves and Alaska finds itself with  a shortage of workers.  He                                                               
indicated  that  [helping  workers]  "stay afloat"  and  stay  in                                                               
Alaska is  a wise investment.   In conclusion, he  encouraged the                                                               
passage of HB 142.                                                                                                              
                                                                                                                                
4:27:40 PM                                                                                                                    
                                                                                                                                
PAUL  GROSSI stated  that he  was representing  the Alaska  State                                                               
Pipe  Trades.   He stated  that  [the Alaska  State Pipe  Trades]                                                               
support HB  142, as  it will  help unemployed  workers.   He said                                                               
that he was hearing a lot  of resistance about the proposed bill,                                                               
based it not  being the appropriate time to  increase the benefit                                                               
because there  is a  downturn in  the economy.   He  provided two                                                               
reasons why  he thinks this is  the "exact time" to  increase the                                                               
benefit:  to help unemployed  workers and to help businesses that                                                               
rely on the  workers as customers.  He said  that although the UI                                                               
benefit  would not  replace the  wages earned  during employment,                                                               
the lower income would provide some  help to both the workers and                                                               
the businesses.                                                                                                                 
                                                                                                                                
MR.  GROSSI said  he is  probably the  only one  in the  room old                                                               
enough  to remember  the last  recession.   He said  that he  was                                                               
living in  Anchorage at the  time, and the recession  was "really                                                               
terrible";  it  affected him  personally.    He described  people                                                               
having  to leave  their homes  and condos,  with their  furniture                                                               
left behind.   He also described families leaving  the state with                                                               
only their  suitcases, after  driving down  to the  Department of                                                               
Labor to pick up  their checks. He said that the  bill was "not a                                                               
cure for  that" but would  help to create  a softer landing.   He                                                               
finished by urging the committee to pass HB 142.                                                                                
                                                                                                                                
4:30:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  ventured that  Mr. Grossi was  referring to                                                               
the recession in '85, '86, and '87.                                                                                             
                                                                                                                                
4:30:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH remarked  there had been a  lot of testimony                                                               
about  the  job  losses  that are  occurring  and  discussion  on                                                               
whether Alaska is or is not in  a recession.  He stated that from                                                               
a budget standpoint, Alaska has issues  to deal with at the state                                                               
level and  "some of us would  like to see the  state budget track                                                               
the private budget"  if there is "a contraction."   He then asked                                                               
if benefits are taxable as income.                                                                                              
                                                                                                                                
MR. GROSSI  replied that  he could not  remember for  certain but                                                               
thinks they are taxable.                                                                                                        
                                                                                                                                
4:31:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL said  that he shares the concerns  of most of                                                               
the people  testifying and, along  with Mr. Grossi,  is concerned                                                               
that laid off  workers will go to other parts  of the country and                                                               
that some of them will not come  back to Alaska.  He said that he                                                               
is not  sure the $200 increase  in weekly benefits that  the bill                                                               
would  provide would  be sufficient  to keep  a worker  here when                                                               
they could  make "decent money"  [elsewhere].  He  indicated that                                                               
it would  be helpful if  the provision  under HB 142  kept people                                                               
here a  little longer.   He  ventured that  the real  solution is                                                               
getting the economy back on line to ensure future jobs.                                                                         
                                                                                                                                
MR. GROSSI  responded, "The  only real  solution is  a job."   He                                                               
said he  hopes Alaska would  not again experience a  recession as                                                               
bad  as  the  one  in  the  mid-1980s,  in  Anchorage,  which  he                                                               
characterized  as  "pretty  terrible"  and "like  the  Grapes  of                                                               
Wrath."  He said that he didn't  know if [HB 142] was enough, but                                                               
he thinks  it's worth a try,  as it may cause  a "softer landing"                                                               
and  help  not only  individuals  but  businesses  as well.    He                                                               
pointed  out  that while  individuals  can  leave to  find  work,                                                               
businesses will  close and, as a  result, will be gone.   He said                                                               
that there  were a  lot of  businesses in  the 1980s  that closed                                                               
because they did not have the customers to stay open.                                                                           
                                                                                                                                
4:33:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL   added  that  training  through   the  TVEP                                                               
program,  which  is  covered  under  the  UI  program,  was  also                                                               
available.                                                                                                                      
                                                                                                                                
4:34:16 PM                                                                                                                    
                                                                                                                                
CHAIR KITO announced that HB 142 was held over.                                                                                 
                                                                                                                                

Document Name Date/Time Subjects
HB142 Fiscal Note DOLWD-UI 3.1.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB142 Sponsor Statement 3.8.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB142 Supporting Document-Letter of Opposition Agosti 3.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB142 Supporting Document-Letter of Opposition NFIB 3.7.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB142 Supporting Document-Letter of Support Miller 3.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB142 Supporting Document-MWBA Analysis 3.8.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB142 Supporting Document-Resolution AWIB 3.8.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB142 Supporting Document-Unemployment Insurance Handbook 3.8.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB142 Supporting Document-WBA charts 3.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 142
HB126 Fiscal Note DOA-DRM 2.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 126
HB126 Fiscal Note DOLWD-WC 2.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 126
HB126 Fiscal Note MVA-COM 2.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 126
HB126 Memo of Changes L&C 2.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 126
HB126 Sponsor Statement 2.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 126
HB126 Supporting Document-Letter Adjutant General Hummel 2.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 126
HB103 Supporting Documents-AS 08.72.273 Removal of foreign bodies 3.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 103
HB103 Amendment 1 3.28.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 103
HB103 Amendment 3 3.29.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 103
HB103 Amendment 2 3.29.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 103
HB103 Amendment 4 3.29.17.pdf HL&C 3/29/2017 3:15:00 PM
HB 103