Legislature(2021 - 2022)ADAMS 519
04/26/2021 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB47 | |
| HB127 | |
| HB28 | |
| HB81 | |
| HB151 | |
| HB41 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 47 | TELECONFERENCED | |
| += | HB 127 | TELECONFERENCED | |
| += | HB 28 | TELECONFERENCED | |
| += | HB 81 | TELECONFERENCED | |
| += | HB 151 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 41 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 26, 2021
1:34 p.m.
1:34:33 PM
CALL TO ORDER
Co-Chair Merrick called the House Finance Committee meeting
to order at 1:34 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
Representative Adam Wool
MEMBERS ABSENT
None
ALSO PRESENT
Representative Andi Story, Sponsor; Thatcher Brower, Staff,
Representative Tarr.
PRESENT VIA TELECONFERENCE
Susan Doherty, Executive Director, Southeast Alaska Seiners
Association; Robert Heyano, Self, Dillingham; Chelsea
Haisman, Executive Director, Cordova District Fisherman
United, Cordova; Susan DeLoache, Owner, Bright Beginnings
Early Learning Center, Palmer; Jan Carolyn Hardy, Self,
Anchorage; Heather DeLoache, Corporate IT Manager, Bright
Beginnings Early Learning Center, Anchorage; Arthur Clark,
Alaska Real Estate Association, Anchorage; Trevor Storrs,
President and CEO, Alaska Children's' Trust, Anchorage;
Tricia Teasley, Vice President of Communication, Catholic
Social Services, Anchorage; Eve Van Dommelen, Alaska Food
Coalition, Anchorage; Don Etheridge, Alaska American
Federation Of Labor And Congress Of Industrial
Organizations (AK AFL-CIO), Juneau; John Fox, Self,
Anchorage; Dan Robinson, Research Chief, Division of Labor
Research and Analysis, Department of Labor and Workforce
Development,; Patsy Westcott, Director, Division of
Employment and Training Services, Department of Labor;
Lennon Weller, Economist and Unemployment Insurance
Actuary, Division of Labor Research and Analysis,
Department of Labor.
SUMMARY
HB 28 REGISTRATION OF BOATS: EXEMPTION
HB 28 was HEARD and HELD in committee for further
consideration.
HB 41 SHELLFISH PROJECTS; HATCHERIES; FEES
CSHB 41(FIN) was REPORTED out of committee with a
"do pass" recommendation and with five previously
published fiscal notes, two zero notes: FN1(CED)
and FN2(DFG); and three indeterminant notes:
FN3(DFG), FN4(GOV/SP Approp), and FN5(REV).
HB 47 COUNCIL FOR ALASKA NATIVE LANGUAGES
HB 47 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN1(CED).
HB 81 OIL/GAS LEASE:DNR MODIFY NET PROFIT SHARE
HB 81 was HEARD and HELD in committee for further
consideration.
HB 127 MUNI BOND BANK: UA, LOAN AND BOND LIMITS
HB 127 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN1(REV).
HB 151 UNEMPLOYMENT BENEFITS FOR COVID-19
HB 151 was HEARD and HELD in committee for
further consideration.
Co-Chair Merrick reviewed the meeting agenda.
1:35:17 PM
Representative Thompson asked Co-Chair Foster for further
public process on HB 69 [-Approp: Operating
Budget/Loans/Funds] and wanted information on what had
changed since the last committee substitute (CS) had been
adopted due to the inclusion of the federal COVID relief
funding and some capital items. He also inquired why the
Permanent Fund Dividend (PFD) was not included in the bill.
Co-Chair Foster indicated that part of the issue was timing
and completing the budget by the end of session. He agreed
things had been more complicated with the inclusion of
COVID relief funding. He would reply further later.
HOUSE BILL NO. 47
"An Act renaming the Alaska Native Language
Preservation and Advisory Council as the Council for
Alaska Native Languages; and relating to the Council
for Alaska Native Languages."
1:38:33 PM
Co-Chair Merrick indicated that the committee had a prior
hearing on HB 47 on April 21. 2021.
1:38:42 PM
REPRESENTATIVE ANDI STORY, SPONSOR, shared that she was a
member of the Alaska Native Language Preservation and
Advisory Council. She highlighted that the bill changed the
councils name to the Alaska Native Language Council. In
addition, the bill expanded the council from 5 to 7
members, making room for more regional language experts.
1:39:52 PM
Co-Chair Merrick OPENED public testimony.
1:40:00 PM
Co-Chair Merrick CLOSED public testimony.
Co-Chair Foster MOVED to report HB 47 out of Committee with
individual recommendations and the accompanying fiscal
note.
HB 47 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN1(CED).
1:41:14 PM
HOUSE BILL NO. 127
"An Act relating to the Alaska Municipal Bond Bank
Authority."
Co-Chair Merrick indicated that the committee had a prior
hearing on HB 127 on April 21. 2021.
1:41:26 PM
REPRESENTATIVE BART LEBON, SPONSOR, thanked the committee
for hearing the bill.
1:41:55 PM
Co-Chair Merrick OPENED public testimony.
1:42:03 PM
Co-Chair Merrick CLOSED public testimony.
Co-Chair Foster MOVED to report HB127 out of Committee with
individual recommendations and the accompanying fiscal
note.
HB 127 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN1(REV).
HOUSE BILL NO. 28
"An Act relating to the registration of commercial
vessels; and providing for an effective date."
Co-Chair Merrick indicated that the committee had a prior
hearing on HB 28 on April 22. 2021.
1:42:43 PM
THATCHER BROWER, STAFF, REPRESENTATIVE TARR, thanked the
committee for hearing the bill. He recounted that the bill
removed the duplicative requirement for vessels with a
current Commercial Fisheries Entry Commission (CFEC)
license to register every three years with the Division of
Motor Vehicles (DMV).
1:43:18 PM
Co-Chair Merrick OPENED public testimony.
1:43:33 PM
SUSAN DOHERTY, EXECUTIVE DIRECTOR, SOUTHEAST ALASKA SEINERS
ASSOCIATION (via teleconference), relayed her
organizations support for HB 28. She elaborated that the
bill fixed the unintended consequences created by the
passage of SB 92 [Vessels: Registration/Titles; Derelicts
Chapter 111 SLA 18, 10/11/2018] in 2018. She believed that
the redundancy created an unnecessary hardship for Alaska's
fleet in communities lacking a DMV office and for out-of-
state license holders. She offered that the intent of the
bill was to ensure proper ownership and contact information
was on file in the event the vessel was abandoned. She
encouraged the committee to pass the legislation.
1:45:19 PM
ROBERT HEYANO, SELF, DILLINGHAM (via teleconference), spoke
in support of HB 28. He shared that he was a commercial
herring and salmon fisher in Bristol Bay. He agreed that
the bill corrected an oversight. He believed that
commercial fishing vessels had sufficient identification
and asked for passage of the bill.
1:46:31 PM
CHELSEA HAISMAN, EXECUTIVE DIRECTOR, CORDOVA DISTRICT
FISHERMAN UNITED, CORDOVA (via teleconference), spoke in
support of HB 28. She conveyed that the bill eliminated the
need for an additional vessel registration with the DMV as
required by prior passage of SB 92 and provided an
exemption for vessels registered with the Commercial
Fisheries Entry Commission (CFEC). Currently, all vessel
owners who participate in Alaskas commercial fisheries are
required to register their vessel with the CFEC, which
provided each vessel with a permanent Alaska Department of
Fish and Game (ADF&G) number. She indicated that CFEC
already had a database that was easily searchable and
publicly accessible online, and vessels registered with the
CFEC are well documented by the state. Most commercial
fishermen had U.S. Coast Guard documented vessels.
1:47:43 PM
Co-Chair Merrick CLOSED public testimony.
HB 28 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 81
"An Act authorizing the commissioner of natural
resources to modify a net profit share lease."
1:48:15 PM
Co-Chair Merrick reported that the committee last heard the
bill on April 23, 2021.
1:48:27 PM
Co-Chair Merrick OPENED public testimony.
1:48:39 PM
Co-Chair Merrick CLOSED public testimony.
Co-Chair Merrick indicated amendments were due by
12:00 P.M. on Thursday, April 29, 2021.
1:49:24 PM
HB 81 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 151
"An Act relating to unemployment benefits during a
period of state or national emergency resulting from a
novel coronavirus disease (COVID-19) outbreak; and
providing for an effective date."
1:49:52 PM
Co-Chair Merrick indicated that the last time the bill was
heard was on April 20, 2021.
1:50:06 PM
Co-Chair Merrick OPENED public testimony.
1:50:14 PM
SUSAN DELOACHE, OWNER, BRIGHT BEGINNINGS EARLY LEARNING
CENTER, PALMER (via teleconference), opposed the bil. She
read from submitted testimony (copy on file).
I am the owner of Bright Beginnings Early Learning
Centers in Anchorage and Eagle River. We are licensed
to care for 455 children ages 6 weeks to 12 years. I
am concerned about the effects that extended
unemployment benefits and stimulus checks are having
on our ability to hire staff. The passing of HB151
would magnify this problem. I was grateful for the
extra benefits when it was necessary for our staff to
receive them in 2020 due to lack of work. That was a
very difficult year for all of us. For our childcare
centers to provide care for the parents that are
returning to work, it is vital that we have qualified
applicants to hire. Even though our business offers
competitive wages, health insurance, 401K, paid
vacations, and other benefits, we have very few
applicants. Many times, applicants don't show up for
their scheduled interview. It seems that they are
looking to fulfill the requirements for maintaining
their unemployment benefits, and not actually wanting
to work. It has been suggested that we contact the
unemployment officials when someone does not show up
for an interview or declines a job offer. We cannot be
put in the position of policing unemployment fraud.
This would be time-consuming and create animosity
towards our business. Now it is time to encourage
people to go back to work. Enrollment in our childcare
centers is starting to increase, and it is necessary
for us to hire additional staff members to care for
these children. The extended benefits have made hiring
very difficult, and our company is not able to enroll
new children because of staffing shortages. Last week
it was necessary for us to discontinue care for some
of our families because there simply are not enough
staff members to care for the children. The parents of
ten children from our Eagle River center were informed
that we could no longer care for their children. This
is devastating for all of us. These are children that
we have a relationship with and care very much about.
The financial loss to our center is $8000/month. This
week we are having an emergency meeting to determine
how many children we can care for at our other three
sites with the staff that we have. Sadly, it is
necessary to discontinue care for more of our
children. This was truly a heartbreaking decision for
us to make and puts our parents in a very difficult
position. Our current staff members are not getting
proper rest. They are often working 10 hours a day
with no lunch breaks so that we can meet the proper
child to adult ratios. This has been going on for the
past six weeks, and we must take steps to protect our
staff from exhaustion. If workers were incentivized to
return to work rather than to stay home, we would not
be in this difficult position.
My colleagues in the childcare industry and I are
struggling financially. Our business is operating at a
$100,000 loss each month. We are relying on our
Payroll Protection Loan and a grant from the MOA to
keep our doors open. Without increased enrollment, we
will be forced to close when these funds run out. I
understand that the intent of HB151 is to provide
assistance to unemployed people with families. The
unintended result will be that families choose to stay
home with their children instead of returning to the
workforce. The reality is that this will result in
childcare centers permanently closing. Then, when
people are ready to return to work, they will not have
access to childcare. This will cripple the economy.
Please consider targeting funds for the genuinely
needy, while encouraging people capable of working to
seek employment. This will help each sector of our
economy recover. Thank you for your consideration in
this matter.
1:53:56 PM
Representative Rasmussen appreciated Ms. DeLoachs passion
for the children in her program and for providing daycare
for working families. She thought the state needed to
figure out more ways to provide more daycare and Pre-K.
Ms. DeLoach appreciated Representative Rasmussen's
comments.
1:55:01 PM
Representative Wool understood the plight of small business
owners. He asked how easy it had been to prior to the
pandemic to hire staff. Ms. DeLoach indicated it was
drastically more difficult than prior to the pandemic.
1:55:49 PM
JAN CAROLYN HARDY, SELF, ANCHORAGE (via teleconference),
supported the legislation. She read from submitted
testimony (copy on file).
I am a Retired State of Alaska employee and a former
Unemployment Insurance (UI) Adjudicator. During my
training I was taught that for every dollar of UI
infused into the community an additional quarter is
generated. That money is spent here in Alaska and
circulates in the community thereby providing more
jobs for more people. People want to work. No one
likes to be without a job: a job helps to define who
we are and to give our lives meaning. Work is a matter
of pride. Moreover, when we work we can save some of
our earnings, get the benefit of retirement, qualify
for health insurance, and even a 401K. That is not
possible when drawing UI. Yes, we pay taxes on earned
income but we also pay taxes on UI. Same for Social
Security and any other benefit earned from a lifetime
of work.
UI claims in February were 208% greater than last
year. While things are improving we have a long way to
go in our recovery. On the bright side, augmented UI
benefits during the pandemic have increased consumer
spending, smoothed consumption, stabilized aggregate
demand, and benefited local business owners. The
proposed increase in benefits under HB151 is targeted,
temporary, and goes to families who need it. The idea
that increased flexibility and benefits are no longer
necessary or are bad for business is short sighted and
illogical. Passing HB 151 will result in leveraging
$2.4 million in UI benefits paid for by the federal
government, providing the Department Labor and
Workforce Development which oversees UI with
additional flexibility and temporarily increasing a
per dependent benefit of $51 per week for unemployed
families with children or who are caring for
individuals with disabilities. Since the State of
Alaska has the lowest wage replacement rates in the
nation and is still down 20,000 jobs from pre-pandemic
employment, we need this bill to sustain our economy
and to keep Alaskans from moving to States where they
perceive greater opportunity.
I know our legislators are aware that Alaskans are not
yet out of the pandemic woods. We are making great
strides to recovery but we cannot let our guard down.
HB 151 provides for the temporary assistance we need
now. I urge you to shepherd this through the committee
process, vote in favor, and send HB 151 on to the
Senate floor for approval.
Thank you for your time and for your consideration.
1:58:54 PM
HEATHER DELOACHE, CORPORATE IT MANAGER, BRIGHT BEGINNINGS
EARLY LEARNING CENTER, ANCHORAGE (via teleconference),
spoke against the legislation. She read from submitted
testimony (copy on file).
My name is Heather DeLoach. I am the Corporate Finance
& IT Manager for Bright Beginnings Early Learning
Center in Anchorage and Eagle River. As a lifelong
Alaskan, graduate of UAA's School of Business, and
mother of two children, I would ask the members of our
House of Representatives to vote against the
provisions in HB151 that will allow an indiscriminate
increase of unemployment benefits until March 2022.
The original intent of increased unemployment benefits
was to support Alaskans as their places of work were
closed due to the COVID-19 pandemic. Thankfully,
businesses are reopening and are in desperate need of
a workforce to support a recovering economy.
Increasing unemployment benefits at this time does not
support this effort. Our leadership team has
diligently fought to retain and hire teachers to meet
the need for childcare in our community. However, the
workforce is greatly diminished. As a result, our
dedicated teaching staff is becoming overworked as
they selflessly tend to the children entrusted to our
care. We need more teachers, but the applicants are
minimal and far too many will schedule an interview,
only to not show up. Hiring has always had its
challenges for our industry, but the difficulty in
hiring over the last several months is unprecedented.
As we are unable to fill vacant positions, we are at a
point of needing to turn away families seeking
childcare and have even been forced to disenroll
current families so we can maintain safe ratios. This
is costing us thousands and will soon cost us 10's of
thousands of dollars each month in lost income and
increased expenses.
If the goal of our state's leaders is economic
recovery, I would urge financial incentives for
employers to increase wages. and benefits, funding to
the Background Check Unit so as to make the hiring
process more efficient and reducing the 30- day
turnaround on background checks, provide support to
the Department of Labor's Unemployment Insurance staff
to investigate fraudulent unemployment claims, and so
on. These actions would help strengthen our economy,
instead of removing incentives to work and then
increasing employer Unemployment Insurance taxes.
Funding greater unemployment benefits will only
increase the number of people using these benefits.
When looking at economic incentives, if given the
choice to either work or not work while still making
the same, if not more, income, the incentive is to NOT
work. Where will our economy be when businesses fail
due to a lack of workers there will be few jobs
available when the unemployment runs out and we will
have prematurely exhausted the funding to sustain it.
a lot of the current unemployment funding is provided
by federal resources. Let's send the message that
Alaskans want to work for a living. I respectfully
urge you to lead Alaska's economic recovery by
considering the long-term needs of both employees and
employers and voting against HB151.
Representative Rasmussen asked if her business had offered
a new hiring bonus. She inquired whether it would be
beneficial if the state could assist in offering hiring
bonuses with federal funds. Ms. DeLoache replied that the
business had offered a $100 hiring bonus, which was all it
could afford. She noted that it had not made any
difference.
2:02:59 PM
ARTHUR CLARK, ALASKA REAL ESTATE ASSOCIATION, ANCHORAGE
(via teleconference), spoke in favor of the legislation. He
shared that he represented many owners of housing rentals
and believed that the payments helped residents pay rent
and utilities, which stabilized the housing market.
2:04:14 PM
TREVOR STORRS, PRESIDENT AND CEO, ALASKA CHILDREN'S' TRUST,
ANCHORAGE (via teleconference), supported the legislation.
He related that one of the most effective ways to prevent
child abuse and neglect was by addressing the social
determinants that promotes trauma and inhibits the skills
to manage it. A key social determinate was a family's
economic wellbeing; Alaska was ranked 36 in the nation for
childrens wellbeing. He elaborated that growing up in
poverty was a major barrier to healthy child development
and had a disproportionate effect on the very young or
those in persistent poverty. He reported that in 2019, 14
percent of Alaskas children lived at or below the poverty
level. In 2019, one quarter of Alaskan children lived in
households with high housing costs. He indicated that the
effects of COVID magnified the issues. Nearly 20 percent of
Alaskas adults living in households with children felt
they could not pay their next rent or mortgage payment and
18 percent did not have enough food. Over 50 percent of
adults living in households with children had lost their
jobs since March 2020. He emphasized that HB 151 provided
economic stability to the states most vulnerable families
and decreased the risk to children.
2:06:36 PM
Representative Rasmussen thanked Mr. Storrs for commenting.
She asked whether Mr. Storrs had heard the testimony from
the childcare center operators and what his thought were.
She related her concerns regarding the lack of childcare
due to staffing needs. Mr. Storrs answered that he heard
and was alarmed by the testimony. He voiced that there was
no indication that HB 151 would exacerbate the issue. He
shared that he had friends with businesses who were
struggling to find staff. He thought the larger issue was
with wages. He deemed that if providing a living wage
through enhanced unemployment truly was creating a problem
with staffing, discussions regarding wages were necessary.
2:08:26 PM
Representative Rasmussen asked how many childcare positions
were needed to fulfill the need for childcare in the state.
Mr. Storrs did not know the information. He furthered that
tracking childcare staff was not a data point that was
commonly measured. The numbers of open positions for
children in childcare centers was tracked and he offered to
provide the most current numbers. Representative Rasmussen
would appreciate the information.
2:10:06 PM
TRICIA TEASLEY, VICE PRESIDENT OF COMMUNICATION, CATHOLIC
SOCIAL SERVICES, ANCHORAGE (via teleconference), spoke in
favor of the bill. She relayed that her organization was in
solidarity with Mr. Storrs testimony. Since the pandemic,
Catholic Social Services (CSS) experienced a sharp increase
for many of its services for families with dependents. The
organizations food pantry went from serving 100 families
per day to 300 families per day; many were first time
recipients. The housing case managers were housing one
family per day, which represented a large increase since
the pandemic began and rental assistance had skyrocketed as
well. She urged the committee to support HB 151.
2:11:56 PM
EVE VAN DOMMELEN, ALASKA FOOD COALITION, ANCHORAGE (via
teleconference), spoke in support of the legislation. She
shared that the coalition partnered with 120 organizations
to work together to elevate anti-hunger and root cause
issues. She noted that food insecurity had risen by 32
percent over the past year. She elucidated that over 25
percent of Alaskas children were experiencing food
insecurity. The coalition partners had to significantly
increase their capacity, up to 900 percent since 2019, and
many had experienced its highest numbers in the prior few
months. She was concerned that the economic impacts of
COVID 19 would linger. She believed that unemployment
insurance (UI) was a vital resource for the families the
coalition served. She shared that extension of the
unemployment benefits provided support and flexibility for
families to get back on their feet during the period of
recovery. In addition, the benefits eased the burden on the
coalition partners and other front line organizations. She
urged members to support HB 151.
2:14:10 PM
DON ETHERIDGE, ALASKA AMERICAN FEDERATION OF LABOR AND
CONGRESS OF INDUSTRIAL ORGANIZATIONS (AK AFL-CIO), JUNEAU
(via teleconference), supported HB 151. He reported that
many seasonal workers in the tourist industry would remain
unemployed in the upcoming tourist season. The members
would need the financial support due to low employment. He
offered that the Department of Labor and Workforce
Development (DLWD) was doing a good job of rooting out
fraud in the UI system. He reiterated that the members
needed the support the extended benefits provided. He
relayed that AK AFL-CIO submitted a letter of support that
provided further detail (copy on file).
2:16:16 PM
JOHN FOX, SELF, ANCHORAGE (via teleconference), spoke in
opposition to the bill. He shared that he owned 2
businesses in Anchorage and was having difficulty finding
employees. He had been looking for someone to work for over
9 months.
Co-Chair Merrick asked him what kind of businesses he
owned. Mr. Fox responded that he owned a restaurant and a
construction company.
2:17:28 PM
Co-Chair Merrick CLOSED public testimony.
2:17:48 PM
DAN ROBINSON, RESEARCH CHIEF, DIVISION OF LABOR RESEARCH
AND ANALYSIS, DEPARTMENT OF LABOR AND WORKFORCE
DEVELOPMENT, (via teleconference), was asked to provide the
data that would support or refute the argument that
expanded UI benefits were incentivizing people to refrain
from working or seeking employment. He elaborated that DOL
did not maintain data on job openings or applications.
However, the department had specific data on what hiring
Alaskan businesses were engaged in. When employers filed UI
quarterly contribution reports, they provided occupation
codes, dates of hire, and names of new employees. The
information was valuable for identifying economic trends.
He noted that the division published a monthly publication
called Alaska Economic Trends. He relayed that the
information was based on statewide data. He revealed that
the largest numbers of hires occurred in lower wage
industries. In the most recent quarter available, the
fourth quarter of 2020, 7,046 employees were hired in the
retail sector, which was almost normal by only 100 fewer
hires. He surmised that in the retail industry extended UI
benefits did not reflect a disincentive to return to work.
He illuminated that in the Accommodation and Food Services
Sector that included hotels, restaurants, and bars, was one
of the largest sectors and experienced the highest number
of job losses. In the fourth quarter of 2020, 4,716
individuals were hired, which reflected a decrease from
6,987 in the prior year. He related that he had heard the
same concerns that extended UI benefits were inhibiting job
seekers. The division informally attempted to answer the
assertion by asking a few questions of employers. The
division inquired whether former employees were informing
employers that the reason they were not wanting to work was
due to the fact they could earn more collecting UI. He
wondered whether the reason people were not applying for
work was due to a vulnerability to COVID, or worry
regarding becoming infected, or infecting someone they live
with. He asked whether homeschool or childcare duties
obstructed some from returning to work. Finally, he
considered whether it was possible that the increased
hassles of being in the hospitality industry was worth
the amount paid for hospitality work. He exemplified a wait
person who had confrontations with people not wearing
masks, increased take-out orders, and changes in tipping.
He commented that labor markets really are markets and
many potential employees and/or employers did not like the
market changes. He thought that COVID-19 raised many
questions. He informed the committee that the labor market
always reflected a balancing act between employers wanting
applicants and workers desiring higher wages. He surmised
that COVID changed the dynamic; possibly forever. He saw
the possibility of restaurant and childcare workers' wages
increasing caused by the different set of factors created
by the COVID pandemic.
2:23:38 PM
Representative Thompson pondered that some businesses had
to lay off employees at the beginning of COVID and wondered
whether a former employee was disqualified from receiving
UI if the employer offered their job back and the
individual refused to return. Mr. Robinson responded that
it was not clear. He indicated that UI required that
recipients had to actively seek work and was meant to
function as a bridge while work was unavailable
2:24:59 PM
Representative Thompson restated his question about the
employee refusing to return to work. Mr. Robinson replied
that it depended on the reason for the refusal. The UI
system staffer would ask the recipient why and if the
answer was due to COVID or COVID related circumstances, the
individual would not be disqualified from receiving
benefits. He deferred details to his colleague that was
part of the UI system.
2:26:08 PM
PATSY WESTCOTT, DIRECTOR, DIVISION OF EMPLOYMENT AND
TRAINING SERVICES, DEPARTMENT OF LABOR (via
teleconference), replied that the answer was dependent on
individual circumstances. She elucidated that there were
mitigating factors that gave the recipient good cause to
refuse work. The UI system determined whether an individual
had the right to refuse work and scrutinized each
individual situation. The determinants had to be mitigating
circumstances i.e., a preexisting condition for COVID or
the employer did not implement necessary precautions for
the employee to return to work safely. She voiced that
simply the fear of COVID was not enough just cause for
employees to refuse to return to work. The division took
the issues very seriously.
2:28:06 PM
Representative Thompson appreciated Ms. Wescott's answer.
He shared from personal experience as a previous employer
that his rates of unemployment insurance would increase
with layoffs. He asked whether the person refusing to
return to work under COVID would still affect the
employers rate. Ms. Westcott affirmed that there was an
experience rating factor that was part of the tax rate
calculation. She pointed out that Alaska was not a direct
charge back state. She delineated that the rating system
considered massive fluctuations from quarter to quarter for
an individual employer and could affect the employer
contribution rate from year to year. However, slight
fluctuations did not affect the employer tax rates. She
deferred to the UI actuary for further details on the tax
rating system.
2:30:22 PM
LENNON WELLER, ECONOMIST AND UNEMPLOYMENT INSURANCE
ACTUARY, DIVISION OF LABOR RESEARCH AND ANALYSIS,
DEPARTMENT OF LABOR (via teleconference), relayed that the
state had an indirect experience rating system, referred to
as a payroll decline system. He elaborated that when
employers had enough quarters of wages reported they fell
into the experience rating system where a minimum of 6
quarters and a maximum of 12 quarters were arrayed from
least to greatest in terms of average payroll decline. The
system was very indirect and on an individual employee
basis it would not affect the tax class much, rather larger
changes in payroll would affect an employer's tax class. He
added that the state had a classification of 20 class rate
taxes for employers.
2:31:56 PM
Representative Wool asked which area of labor did not
experience a steep decline. Mr. Robinson replied that it
was in the retail trade, which were relatively low wage
workers. He noted that the sector was particularly
interesting because low wage work might be susceptible to
workers not returning to work due to extended benefits.
Representative Wool suggested that the hospitality industry
was affected by tips and would be a factor with takeout or
low capacity regardless of the rate of hourly pay. He
wondered when the $600 weekly federal supplement ended and
if there was a change in hiring data when it ended. Mr.
Robinson answered that the $600 expired at the end of the
second quarter. He noted that there had been three
different supplements to UI. He reminded the committee that
the department maintained quarterly hiring data.
2:34:12 PM
Representative Wool inquired whether DOL had the data to
compare the quarter before the supplement ended and the
quarter after and if he noticed a change in the hiring data
for either retail or hospitality workers. Mr. Robinson
replied that there were enough other things happening that
washed out a definitive effect by larger factors. He
guessed that the supplement could have been a factor in
hiring. He provided the example of the hospitality industry
in the second quarter of 2019 with 14,520 hires compared to
the second quarter of 2020 with 5,943 hires, which included
the period of people receiving the $600 supplement.
However, in the third quarter the number only increased to
7,194 still well below the 2019 number. He concluded that
larger things were at work and made it difficult to isolate
the UI supplement factor if it did exist.
Representative Wool acknowledged the difficulty of
isolating the different factors. He shared from personal
experience that he had been an employer prior to the COVID
19 pandemic. He pointed out the difference between
aggregate data and individual industry data. He recounted
from prior personal experience that when he had asked
former employees to return from seasonal layoff on a
limited hourly basis, they asked to be paid in cash, so
they did not lose their UI benefit or Medicaid. He asked
how limited hourly work affected someone who was receiving
UI benefits or Medicaid. He wondered if they completely
lost their benefits or whether the benefits were on a
sliding scale. He wondered whether DOL enforced working for
cash under the scenario he described. Ms. Westcott
responded that wages had to be reported and that working
under the table for cash was a violation and was not an
option. She related that an individual could work part-
time; for every dollar they earned DOL deducted $.75 per
every $1.00 earned on their UI benefit. She surmised that
it was possible for someone to work 10 hours per week and
still receive a partial UI benefit. Representative Wool
deduced that it was not much of an incentive to work. Ms.
Westcott noted that the first $50 of wages earned in a week
was not deducted from their UI benefit.
2:40:28 PM
Representative Wool had a question about enforcement. He
asked about fraud detection and the number of cases the
division pursued. Ms. Westcott reported that the department
had found less than 1 percent of cases were fraudulent. The
division audited and investigated fraud every day and
supposed that fraudulent claims might increase with the
episodic supplemental program, which created a ripe
environment for fraud. Currently the department's fraud
rate was very low. However, it was something that the
department continued to vigorously investigate. The
division was adding staff to its benefits payment control
unit for fraud detection. She emphasized that the division
considered fraud a serious violation. She acknowledged that
it might be arduous for employers to report an employee on
UI benefits refusing to return to work for fear of losing
benefits.
2:43:18 PM
Representative Wool returned to his scenario, but the
employer reported the person for fraud. He did not think a
valuable employee would ever want to return to the former
employer and it would deter others from working at the
establishment. He deduced that requiring the employer to
self-report on a valuable employee for fraud was
problematic for the employer. He cited the current UI
supplement of $300 and wondered when the supplement
expired. Ms. Westcott responded that the benefits were
extended through September 6, 2021.
2:44:36 PM
Representative Edgmon was trying to get a sense of the
larger picture. He observed that Alaska had lost population
over the last 2 years and deduced that the bill would
benefit some of the workers included in the lost population
due to COVID and the highly seasonal workers that included
the hospitality and tourist industry because the former
number of jobs had decreased. He wondered whether his
observation was valid. He also wanted to know about the
opening of the economy considering the seasonality of jobs
in the state and the fact that many jobs were currently not
available. He noted that the state was down 23,000. He
asked if possibly some of the people who had previously
filled seasonal jobs might have moved out of state. He also
determined that in 2021 the job market would not be back to
normal and less jobs would be available.
2:46:51 PM
Mr. Weller replied that the answer to the first question
about in and out migration concurred with Rep. Edgmons
conclusion that the state had seen a net negative
migration. He elucidated that he was uncertain of the
composition regarding the individuals vacating the state in
the past 12 months. He could not draw a conclusion whether
it would match the potential labor supply of the jobs
available. He expected to have answers in the future. He
agreed that out migration could arguably be a factor in
reducing labor supply for individuals looking for work. He
elucidated that it was likely that Alaska was competing for
a certain labor pool where economies in other states were
opening more quickly than Alaska. He asked Rep. Edgmon to
repeat his second question. Representative Edgmon repeated
his question about the economy opening up and his
expectation that many jobs would still be in decline
especially in the tourist industry. Mr. Weller responded
that demand had been elusive in anything related to the
hospitality industry and it would be difficult for the
state to overcome. He pointed out that it was important to
keep in mind that the pandemic occurred pre-tourism season
in the prior year but for many who lost jobs it was
disproportionately higher for people with year around
employment. He guessed that the economy should be able to
reabsorb a high number of workers as vaccination rates
continued to increase and COVID was under control. He
agreed that in the later stages of the pandemic economic
recovery would be frustrating and develop in fits and
starts in terms of reabsorbing workers back into the work
force.
Representative Edgmon commented that the pandemic made it
difficult to make blanket statements about anything. He
ascertained that currently, the legislation would benefit
many Alaskans and that the bill was likely more helpful
than not. He wondered if anyone in DOL could answer the
question whether the bill was necessary and helpful.
Ms. Westcott responded that the department forecasted
roughly 11,000 new filers between April 1 through September
6, 2021, who would benefit from the change in provision
that waived the waiting week. In addition, in any given
week approximately 25 thousand to 35 thousand individuals
that filed had one or more dependents that would benefit
from the enhanced dependent allowance. Representative
Edgmon asked if her answer was a vote of confidence on the
bill. Ms. Westcott offered that the department was neutral
on the bill. Representative Edgmon wondered if there was
anyone on the line that could answer his question of
whether the bill would be beneficial for Alaskans. Ms.
Westcott reiterated the statistics she cited in her prior
answer.
2:56:01 PM
Representative Josephson referenced a 2-page document
provided by DOL dated March 2021 (copy on file) that
contained a table. He wondered if Ms. Westcott was familiar
with the document. Ms. Westcott responded that the table
was the Wage Replacement Ratio. Representative Josephson
deduced that Alaska was ranked in last place. Ms. Wescott
affirmed his statement. She explained that the ratio was
the states average UI benefit amount as a percentage of
the states average weekly wage. She confirmed that Alaska
was last in the nation for wage replacement benefits.
Representative Josephson appreciated concerns regarding
indolence; people receiving UI that could otherwise work.
However, Alaska was the absolute worst in the nation at
wage replacement. He noted that AS 23.23.50 was the most
recent change in replacement rates in 2008. He discerned
that the state had not adjusted rates in at least 13 years.
He summarized that the bill authorized $2.1 million of
federal funds for a week of non-delay. The bill was also
increasing the per child benefit from $25 to $74. He
offered that Alaska was still the least generous of all
states. Ms. Westcott confirmed that Alaska had the least
amount of wage replacement in the nation. She confirmed
that the waiting waiver was fully federally funded. The
provision related to the enhanced dependent allowance was a
cost to the states trust fund. She thought Mr. Weller
would better answer the question.
3:00:33 PM
Representative LeBon asked if the goal was to reopen the
economy sooner rather than later, whether the bill helped
towards the goal. Ms. Westcott reiterated that the
department was neutral on the bill. She indicated that some
provisions in the bill was fully federally funded. The
department was interested in hearing about any situation in
which any unemployed worker refused suitable work because
UI paid more. Representative LeBon opined that it was
essential that businesses were allowed to fully reopen to
100 percent capacity so they could survive as a business.
Co-Chair Merrick would invite other testifiers from the DOL
at a later hearing.
HB 151 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 41
"An Act relating to management of enhanced stocks of
shellfish; authorizing certain nonprofit organizations
to engage in shellfish enhancement projects; relating
to application fees for salmon hatchery permits and
shellfish enhancement project permits; allowing the
Alaska Seafood Marketing Institute to market aquatic
farm products; and providing for an effective date."
3:02:51 PM
Co-Chair Merrick indicated that HB 41 was heard in a prior
hearing on April 21., 2021. She reported that there was one
amendment by Representative Thompson.
Representative Thompson withdrew Amendment 1 (copy on
file).
3:03:18 PM
Representative Thompson MOVED to ADOPT Conceptual
Amendment 1 (copy on file):
I Move A Conceptual Amendment; Sections 7 Through 10
Are Effective Through June 30, 2025.
Co-Chair Merrick OBJECTED for discussion.
Representative Thompson explained that the bill would be
amended to sunset sections 7-10 on June 30, 2025. The
sections addressed the Alaska Seafood Marketing Institute
ASMI portion of the bill.
3:03:46 PM
AT EASE
3:08:49 PM
RECONVENED
Representative Thompson further explained Conceptual
Amendment 1. He indicated that the bill contained sections
providing that ASMI would market aquatic farm products and
that the industry would be exempt from reparations to ASMI.
He relayed prior testimony stating the shellfish industry
would be worth $100 million in a few years. He felt that
the industry should have some skin in the game and
contribute to ASMIs marketing. The sunset date would allow
time to revisit the issue to determine whether there was a
need to contribute for marketing. He shared that the
fishing industry contributed .50 percent of the ex-vessel
price through the processors.
3:10:50 PM
Representative Edgmon thanked the former fisheries
committee chairman. He thought Representative Thompson's
amendment was beneficial and supported it.
Co-Chair Merrick WITHDREW her OBJECTION.
Co-Chair Foster MOVED to report CSHB 41(FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes.
There being NO OBJECTION, it was so ordered.
CSHB 41(FIN) was REPORTED out of committee with a "do pass"
recommendation and with five previously published fiscal
notes, two zero notes: FN1(CED) and FN2(DFG); and three
indeterminant notes: FN3(DFG), FN4(GOV/SP Approp), and
FN5(REV).
Co-Chair Merrick reviewed the agenda for the following
meeting.
ADJOURNMENT
3:12:21 PM
The meeting was adjourned at 3:12 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 41 Amendment 1 Thompson.pdf |
HFIN 4/26/2021 1:30:00 PM |
HB 41 |
| HB 41 Legal Memo Thompson 042221.pdf |
HFIN 4/26/2021 1:30:00 PM SFIN 1/31/2022 1:00:00 PM |
HB 41 |
| HB 47 Letter of Support_ATOH-OHNC 042421.pdf |
HFIN 4/26/2021 1:30:00 PM |
HB 47 |
| HB 151 Public Testimony rec'd by 042621.pdf |
HFIN 4/26/2021 1:30:00 PM |
HB 151 |
| HB 28 Public Testimony as of 042621.pdf |
HFIN 4/26/2021 1:30:00 PM |
HB 28 |