02/24/2020 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB84 | |
| HB215 | |
| HB235 | |
| HB113 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 84 | TELECONFERENCED | |
| *+ | HB 215 | TELECONFERENCED | |
| += | HB 235 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 113 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 24, 2020
3:17 p.m.
MEMBERS PRESENT
Representative Ivy Spohnholz, Chair
Representative Louise Stutes
Representative Zack Fields
Representative Sara Hannan
Representative Andi Story
Representative Mel Gillis
Representative Sara Rasmussen
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 84
"An Act relating to the presumption of compensability for a
disability resulting from certain diseases for firefighters,
emergency medical technicians, paramedics, and peace officers."
- HEARD & HELD
HOUSE BILL NO. 215
"An Act relating to unemployment insurance contribution rates;
and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 235
"An Act relating to allocations of funding for the Alaska
Workforce Investment Board; and providing for an effective
date."
- HEARD & HELD
HOUSE BILL NO. 113
"An Act relating to employment preferences for spouses and
children of veterans, disabled veterans, former prisoners of
war, members of the national guard, and deceased service
members."
- MOVED CSHB 113(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 84
SHORT TITLE: WORKERS' COMP: POLICE, FIRE, EMT, PARAMED
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
03/06/19 (H) READ THE FIRST TIME - REFERRALS
03/06/19 (H) HSS, L&C
04/04/19 (H) HSS AT 3:00 PM CAPITOL 106
04/04/19 (H) Heard & Held
04/04/19 (H) MINUTE(HSS)
04/25/19 (H) HSS AT 3:00 PM CAPITOL 106
04/25/19 (H) Moved HB 84 Out of Committee
04/25/19 (H) MINUTE(HSS)
04/26/19 (H) HSS RPT 5DP
04/26/19 (H) DP: CLAMAN, TARR, DRUMMOND, ZULKOSKY,
SPOHNHOLZ
02/24/20 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 215
SHORT TITLE: EMPLOYER'S UNEMPLOYMENT INSUR RATE
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/27/20 (H) READ THE FIRST TIME - REFERRALS
01/27/20 (H) L&C, FIN
02/24/20 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 235
SHORT TITLE: AK WORKFORCE INVESTMENT BOARD:ALLOCATIONS
SPONSOR(s): WOOL
02/05/20 (H) READ THE FIRST TIME - REFERRALS
02/05/20 (H) L&C, FIN
02/21/20 (H) L&C AT 3:15 PM BARNES 124
02/21/20 (H) Heard & Held
02/21/20 (H) MINUTE(L&C)
02/24/20 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 113
SHORT TITLE: MILITARY FAMILY EMPLOYMENT PREFERENCE
SPONSOR(s): JACKSON
03/27/19 (H) READ THE FIRST TIME - REFERRALS
03/27/19 (H) MLV, L&C
04/16/19 (H) MLV AT 1:00 PM GRUENBERG 120
04/16/19 (H) Heard & Held
04/16/19 (H) MINUTE(MLV)
04/18/19 (H) MLV AT 1:00 PM GRUENBERG 120
04/18/19 (H) -- MEETING CANCELED --
04/23/19 (H) MLV AT 1:00 PM GRUENBERG 120
04/23/19 (H) Moved CSHB 113(MLV) Out of Committee
04/23/19 (H) MINUTE(MLV)
04/24/19 (H) MLV RPT CS(MLV) NT 5DP 1NR
04/24/19 (H) DP: KOPP, JACKSON, TARR, TUCK, LEDOUX
04/24/19 (H) NR: THOMPSON
05/06/19 (H) L&C AT 3:15 PM BARNES 124
05/06/19 (H) -- MEETING CANCELED --
05/10/19 (H) L&C AT 3:15 PM BARNES 124
05/10/19 (H) Heard & Held
05/10/19 (H) MINUTE(L&C)
02/19/20 (H) L&C AT 3:15 PM BARNES 124
02/19/20 (H) Heard & Held
02/19/20 (H) MINUTE(L&C)
02/21/20 (H) L&C AT 3:15 PM BARNES 124
02/21/20 (H) Heard & Held
02/21/20 (H) MINUTE(L&C)
02/24/20 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE ANDY JOSEPHSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 84, as prime sponsor.
ELISE SORUM-BIRK, Staff
Representative Andy Josephson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented a PowerPoint entitled, "HB 84,"
on behalf of Representative Josephson, prime sponsor.
THOMAS HOFFMAN
Public Safety Employees Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 84.
PATSY WESCOTT, Director
Division of Employment and Training Services
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Introduced HB 215.
LENNON WELLER, Economist/Unemployment Insurance Actuary
Research & Analysis Section
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Provided a PowerPoint, entitled
"Unemployment Insurance Financing Metrics in Alaska 1980s to
Current," and answered questions during the hearing on HB 215.
REPRESENATIVE ADAM WOOL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, provided the opening
statement for HB 235.
ASHLEY CARRICK, Staff
Representative Adam Wool
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
235 on behalf of Representative Wool, prime sponsor.
DON ETHERIDGE
Alaska American Foundation of Labor & Congress of Industrial
Organizations
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 235.
CHARLES MCKEE
Anchorage, Alaska
POSITION STATEMENT: Provided Comments not on topic with the
published agenda.
DOUG WAIRATH
Northwestern Alaska Career & Technical Center
Nome, Alaska
POSITION STATEMENT: Testified in support of HB 235.
REPRESENTATIVE SHARON JACKSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Offered comments during the hearing on HB
113, as prime sponsor.
ACTION NARRATIVE
3:17:24 PM
CHAIR IVY SPOHNHOLZ called the House Labor and Commerce Standing
Committee meeting to order at 3:17 p.m. Representatives Story,
Stutes, Fields, Gillis, Hannan, Rasmussen, and Spohnholz were
present at the call to order.
HB 84-WORKERS' COMP: POLICE, FIRE, EMT, PARAMED
3:18:28 PM
CHAIR SPOHNHOLZ announced that the first order of business would
be HOUSE BILL NO. 84, "An Act relating to the presumption of
compensability for a disability resulting from certain diseases
for firefighters, emergency medical technicians, paramedics, and
peace officers."
3:18:43 PM
REPRESENTATIVE ANDY JOSEPHSON, Alaska State Legislature, as
prime sponsor, introduced HB 84. He paraphrased the sponsor
statement, which read in its entirety as follows [original
punctuation provided]:
First responders are exposed to a broad array of toxic
chemicals daily in the course of their service to our
communities. This level of exposure has been linked to
increased risk of disease or disability among this
sector of public servants. Under current Alaska law,
the presumption of coverage for certain diseases or
disabilities being caused by work only extends to
certain firefighters. House Bill 84 (HB 84) has the
core purpose of extending this presumption of coverage
to emergency medical technicians, paramedics and peace
officers.
Emergency medical technicians (EMTs), paramedics and
peace officers face toxic exposure comparable to those
faced by firefighters and often are present when
responding to fire calls or when dealing with a
mediation of other environmental contaminants. Since
these professions face the same daily risks as
firefighters, they deserve the same legal protections.
Additionally, HB 84 adds breast cancer to the diseases
covered under Alaska's presumptive illness law. There
is emerging evidence that breast cancer rates are
significantly higher among female firefighters than
the average population and that there are more
instances of premenopausal breast cancer among these
professional women. There is also evidence that many
chemicals known to cause breast cancer form during
thermal decomposition.
Finally, HB 84 extends coverage to professionals who
entered active service prior to August 19, 2008 and
who, having gone through all official work-related
medical examinations, did not show evidence of disease
in their first seven years of service.
Passage of HB 84 will ensure that Alaska adequately
protects the individuals who choose professions to
protect Alaska. I encourage you to support this
legislation and urge you to reach out to my office
with any questions or concerns.
3:24:31 PM
ELISE SORUM-BIRK, Staff, Representative Andy Josephson, Alaska
State Legislature, presented a PowerPoint entitled, "HB 84," on
behalf of Representative Josephson, prime sponsor. She informed
the committee that most categories of firefighters are currently
covered under AS 23.30.121 [Presumption of coverage for
disability from diseases for certain firefighters]. The purpose
of HB 84 is to extend the presumption of compensability for
certain diseases to three more professions: emergency medical
technicians, peace officers, and paramedics. She noted that the
first responder professions are often exposed to the same
dangerous situations and toxins that firefighters are (slide 2).
HB 84, she said, seeks to expand presumptive coverage to allow
for line-of-duty claims and subsequent benefits to be
automatically approved as long as the specific criteria are met
under the state's regulations. Alaska has very specific
criteria in place for someone to be eligible for the potential
benefits (Slide 3). She outlined Alaska's specific criteria on
slide 4, which read as follows [original punctuation provided]:
? Narrowly defined and limited in AS 23.30.121
? Presumption of coverage may be rebutted based on
tobacco use, physical fitness, weight, lifestyle,
hereditary factors, exposure from other employment or
non-employment activities
? May not extend for more than 3 months for each year
of service or 60 months following last date of
employment
? Only to those who have served for a minimum of seven
years
? Only to individuals who have undergone qualifying
medical exam and requisite annual exams with no
evidence of disease
? Only if the individual with cancer was exposed to
known carcinogens in the course of employment
MS. SORUM-BIRK directed attention to slide 5, entitled
"Sectional Analysis," which read as follows [original
punctuation provided]:
? Section 1:
? Amends AS 23.30.121(b) throughout to add emergency
medical technician, paramedic and peace officer to
professions presumed covered for disability or
disease.
? Creates a new section to include breast cancer under
diseases for which a covered professional can claim
compensation.
? Extends coverage to certain professionals who
entered active service prior to August 19, 2008.
? Section 2, Section 3, Section 4:
? Includes emergency medical technician, paramedic and
peace officer among presumptively covered professions
? Section 5:
? Provides definitions of "emergency medical
technician," "firefighter,""paramedic," and "peace
officer."
? Section 6:
Clarifies that AS 23.30.121 as amended applies to
claims made on or after the effective date of this
Act.
? Section 7:
? Encourages revisors to update catch line of AS
23.30.121 to reflect changes made by this Act.
MS. SORUM-BIRK continued to slide 6, entitled "Diseases covered
in Alaska," which read as follows [original punctuation
provided]:
Currently covered: respiratory disease, certain
cardiovascular events related to toxin exposure,
primary brain cancer, malignant melanoma, leukemia,
non-Hodgkin's lymphoma, bladder cancer, ureter cancer,
kidney cancer, prostate cancer
? Added by HB 84: breast cancer
? Emerging literature suggests a higher rate of
breast cancer among women firefighters
3:31:56 PM
MS. SORUM-BIRK directed attention to slide 8, "Expands
definition of firefighter." She explained that the current
statutory definition of firefighter that's used in the
presumptive illness legislation in presumptive illness law does
not include individuals who are employees of the state of
Alaska. This means that airport firefighters who are Department
of Transportation & Public Facilities (DOT&PF) employees,
employees of the state fire marshal, and wildland firefighters
employed by the Department of Natural Resources are not covered
by current law. For this reason, HB 84 adds firefighters who
are state employees to the definition of firefighter. She noted
that at least 13 states cover police officers, and 10 states
cover paramedics and EMTs. She added that there is a growing
body of research relating to the cancer risk for police
officers. Several studies have found correlations between
police work and increases in various types of cancer. She
further noted that the most common hazards for EMTs and
paramedics include responding to natural disasters, terrorist
attacks, and chemical spills released during chemical
transportation. Law enforcement personnel are also concerned
with clandestine drug labs and exposure, specifically from
methamphetamine production.
REPRESENTATIVE JOSEPHSON noted that the 2008 legislation was
restricted and constrained.
3:36:26 PM
REPRESENTATIVE HANNAN questioned whether the statutory
definition of peace officer includes village public safety
officers (VPSOs) who in many communities, are the only first
responders.
MS. SORUM-BIRK said she would follow-up with the requested
information.
REPRESENTATIVE HANNAN inquired as to how firefighters verify
that they were exposed to carcinogens on the job.
3:38:13 PM
REPRESENTATIVE JOSEPHSON said he does not know; however, he read
the following from the John Adamson case [ADAMSON v. State of
Alaska, Intervenor.]:
At the hearing, Adamson testified that he had been
exposed to soot in the course of fighting fire and
that he had been involved in fighting several large
fires including a paint supply store in which paint
was burning. Dr. Allems agreed that Adamson had been
exposed to soot. Dr. Allems also testified that
arsenic is used in paint pigments and cadmium is used
in paints and batteries. Cadmium, arsenic, and soot
are all listed as known carcinogens by the national
toxicology program.
CHAIR SPOHNHOLZ clarified that by "soot," Representative
Josephson was referring to ash.
REPRESENTATIVE JOSEPHSON offered his understanding that, not
without a battle by the municipality, Adamson was able to
provide anecdotal evidence of his exposure to carcinogens. He
said keeping a log is typically how it's done.
3:39:47 PM
REPRESENTATIVE HANNAN asked how many disability claims have been
processed since the law passed in 2008 from which public
employees or volunteer firefighters have received workers'
compensation.
MS. SORUM-BIRK offered her understanding that "just a handful"
of cases have used this presumption of compensability in Alaska.
Regarding the determination of carcinogens, she directed
attention to page 2, lines 28-29 of the bill, which states that
the lists of cancer-causing agents must be defined by the
International Agency for Research on Cancer or the National
Toxicology Program.
REPRESENTATIVE JOSEPHSON offered to follow up with the requested
information.
3:41:50 PM
REPRESENTATIVE RASMUSSEN referencing AS 01.10.609(a)(7)(A)-(F),
said the definitions of a "peace officer" include an officer of
the state troopers; a member of the police force of a
municipality; a village public safety officer; a regional public
safety officer; a United States marshal or deputy marshal; and
an officer whose duty it is to enforce and preserve the public
peace. She expressed her concern that that subparagraph (F),
"an officer whose duty it is to enforce and preserve the public
peace," is too vague.
REPRESENTATIVE JOSEPHSON acknowledged her concern and said he
would look into the meaning of that categorization.
CHAIR SPOHNHOLZ noted that subsection (F) may be regarding
serious emergencies or larger disasters. She added, people who
might not respond to certain kinds of emergencies in every given
scenario will do so in the case of a serious emergency. In the
case of a larger disaster, emergency responders of all different
kinds will participate in different ways according to their
training and could be exposed to things that they might not be
in the course of their regular duties.
3:43:55 PM
REPRESENTATIVE RASMUSSEN mentioned the research on women
firefighters and breast cancer. She asked if "there's anything
that correlates female firefighters to, maybe, starting a little
bit later in life with starting their family ? getting
themselves established in a career that's more male dominated."
REPRESENTATIVE JOSEPHSON explained that the San Francisco Fire
Department did a study that found six times the normal rate of
breast cancer among its firefighters. He acknowledged that
there could be other causalities.
MS. SORUM-BIRK noted that the same study found a much higher
level of breast cancer among premenopausal women compared to the
general population. She said she's not sure if they looked at
the specific factors mentioned by Representative Rasmussen.
REPRESENTATIVE RASMUSSEN offered her belief that, in general,
age is a factor for women. She said that as women approach age
55 it increases the likelihood of developing breast cancer. She
went on to say she heard that women who breast feed are less
likely to develop breast cancer and asked if there is any known
correlation between the two.
CHAIR SPOHNHOLZ agreed that when expanding presumptive illness
to include breast cancer, it's fair to ask that [the committee]
has a clear understanding of what the "linkage" is to an
increase in rates.
3:47:20 PM
THOMAS HOFFMAN, Public Safety Employees Association, said he has
been a firefighter and police officer at the Ted Stevens
Anchorage International Airport for the last four years. He
stated that he and his co-workers are appreciative that HB 84 is
being expanded to include the state firefighters. He said there
are a lot of hazardous materials involved in responding to an
aircraft or airport fire. He offered his belief that all
firefighters who serve the state of Alaska, whether in training
or responding to incidents, have been exposed to carcinogens.
He expressed his support for HB 84.
3:49:33 PM
REPRESENTATIVE RASMUSSEN asked how many state firefighters would
be included in HB 84.
MR. HOFFMAN replied that in his department alone there are
anywhere between 68-75 firefighters, not including the Fairbanks
Airport or the UAA firefighters.
CHAIR SPOHNHOLZ thanked Mr. Hoffman and the rest of the public
safety employees for their work for the state.
3:50:52 PM
CHAIR SPOHNHOLZ announced that HB 84 was held over.
HB 215-EMPLOYER'S UNEMPLOYMENT INSUR RATE
3:51:23 PM
CHAIR SPOHNHOLZ announced that the next order of business would
be HOUSE BILL NO. 215, "An Act relating to unemployment
insurance contribution rates; and providing for an effective
date."
3:51:57 PM
PATSY WESCOTT, Director, Division of Employment and Training
Services, Department of Labor & Workforce Development, informed
the committee that employer rates are provided for in Title 23,
Chapter 20, the Alaska Employment Security Act. The act itself
is designed to promote employment and economic security and
provide a partial wage replacement to qualified, unemployed
workers through the collection of unemployment insurance tax
contributions. Currently, the applicable statute provides for a
minimum contribution rate of one percent for all employers in
all rate classes one through twenty. The only exception is rate
class twenty-one, which is the penalty rate. HB 215 seeks to
lower the minimum contribution rates for employers in rate
classes one through nine and set the minimum rates to correlate
with an employer's experience rating. The current minimum of
one percent notably affects the rate for employers with a year-
round consistent work force. These employers contribute at a
disproportionate rate when compared to employers who have
inconsistent employee payroll from quarter to quarter. An
employer's experience rate is based on how consistent their work
force is throughout the year. The more stable an employer's
work force, the less need there is for their employees to draw
unemployment insurance benefits. Since these employers have
fewer employees in need of benefits, it is appropriate that
their rates should not be expected to carry the same
contribution burden as their counterparts in higher rate
classes. At this time, approximately 4,700 employers are paying
more contributions than are necessary. The proposed legislation
would establish lower minimum rates, beginning January 1, 2021.
3:54:56 PM
LENNON WELLER, Economist/Unemployment Insurance Actuary,
Research & Analysis Section, Department of Labor & Workforce
Development, provided a PowerPoint presentation, entitled
"Unemployment Insurance Financing Metrics in Alaska 1980s to
Current." He noted that, in general, the unemployment insurance
(UI) financing system has essentially been in its current form
since the early 1980s and has served the state "fairly well."
He said it's a well-functioning system. Both through the 1980s
recession and the 2009 recession, Alaska never borrowed money to
pay benefits - unlike a majority of other states - which, he
said, is a testament to the system's well-functioning nature.
He explained that the system is self-adjusting, in that it looks
to recapture costs born by the system as its primary objective.
It's also countercyclical, meaning it attempts to do that post
the high cost period through a three-year averaging of cost in
relation to covered wages when implementing tax rates in the
following years. The UI financing system has two primary
objectives, cost recovery and recession readiness, which are the
two main drivers of rates at any given year. He directed
attention to a graph on slide 3, entitled "UI Trust Fund End-of-
Year Balance, Benefit Costs, and Payroll Contributions, 1981-
2019." He said it shows the relationship between benefit costs
at any given year, net contributions, and the resulting trust
fund balance. Over time, in nominal terms, the trust fund
balance should grow because it is kept within a relative ratio
to wages in the economy. Essentially, as wages grow the balance
of the fund should grow.
3:58:05 PM
REPRESENTATIVE HANNAN asked if benefit cost is what is paid out
in benefits.
MR. WELLER answered yes.
REPRESENTATIVE HANNAN pointed out that in 1986 more money was
spent on unemployment insurance than was taken in. She asked
where that money came from, more specifically, if it was a draw
on the general fund.
MR. WELLER said all revenues, or net UI contributions, come from
the payroll tax, which is assessed on all wage and salary
employment in the state.
REPRESENTATIVE HANNAN said the graph shows that the trust fund
balance wasn't high enough to pay the benefit cost in 1986. She
asked what happens when the benefit costs are higher than the
trust fund balance.
MR. WELLER explained that while in any given year more benefits
might have been paid out than the amount received in
contributions, the actual net value of the fund was never
negative. He said in 1986 it fell to a low of $60 million and
began to recover thereafter. He noted that several years prior,
the fund was built up to have the cushion necessary to absorb
those benefit costs higher than contributions.
3:59:43 PM
MR. WELLER directed attention to a graph on slide 4, entitled
Unemployment Insurance Trust Fund Reserve Rate the Measure of
Solvency 1981-2020." He discussed how the trust fund balance is
viewed in terms of the financing system. He said the more
important aspect, as opposed to the nominal value of the fund,
is its relation to the total wages covered in the economy. The
target for the reserve ratio is between 3-3.3 percent of covered
wages and the fund seeks to return to the relative portion of
covered wages. In periods it will be below that which is
accounted for by cost recapture and a solvency adjustment. He
said that the reserve ratio is the balance of the fund as a
percentage of wages in the economy. He pointed out that in the
last several years, it has gone above the target high point
reserve ratio of 3.3 and is currently at 3.8 reserve ratio. He
further noted that the target reserve ratio is a result of
looking at history, benefit costs under high-cost periods, and
deemed acceptable to meet a vast majority of potential large
cost periods.
MR. WELLER turned attention to a graph on slide 5, entitled
"U.S. DOL, Measures of Trust Fund Adequacy." He said,
generally, the state will meet the average high-cost multiple,
which is a more generous measure. It looks at a three-year
average of the highest cost periods as a percentage of wages.
That high-cost rate is 22.6 percent. He explained that the
high-cost multiple looks at the highest cost 12-month period in
the program's history, which was in 1958 at 4.34 percent of
covered wages. The point of this graph, he said, is to show how
far the reserve ratio has come in the last several years. It is
now running at 60 percent higher than the main federal DOL
measure of full solvency - 160 percent of what they would deem
necessary to meet the most likely recessionary cost period.
MR. WELLER continued to a graph on slide 6, entitled
"Unemployment Insurance Average Benefit Cost Rate, ABCR, 1985-
2020." He stated that the Average Benefit Cost Rate (ABCR) is
the main driver of tax rates in any given year - it is the cost
recover element. Three years of benefit cost is used as a
percentage of wages to replenish the fund in relation to those
wages covered. Since the mid-1980s, there has been a
significant decline in the relative ratio of benefits paid to
the general size of the potential pool of wages in the economy.
Furthermore, 2020 is the first year where ACR fell below the
threshold at which the one percent statutory minimum met the
average rate classes 10 and 11.
MR. WELLER directed attention to a graph on slide 7, entitled
"Alaska, UI Contribution Rates Employer and Employee, CY1981 -
CY2020." He said it shows the average employer tax rate and the
uniform employee rate. The past four years has steadily
remained at the statutory minimum one percent, which signifies
that tax rates have bottomed out. He continued to a graph on
slide 8, entitled "1985-2020 Count of Tax Classes at Statutory
Min. 1 [percent] in a given tax year Total of 20 Tax Classes
subject to 1 [percent] Min." He stated that there's at least
one or two tax classes that become subject to the minimum
because rate class one equates to 40 percent of the average
benefit cost rate of portion two employers.
4:06:23 PM
The committee took a brief at-ease.
4:06:27 PM
CHAIR SPOHNHOLZ noted that something is wrong with the visuals
on the projector.
4:07:24 PM
MR. WELLER said on average, there are several tax classes that
are subject to the minimum rate; however, in the past several
years it has steadily crept up to the point where currently, 18
of the 20 rate classes that subject to the minimum are at that
one percent minimum.
4:07:50 PM
REPRESENTATIVE FIELDS asked how many employers HB 215 would
affect.
MS. WESCOTT answered approximately 4,700.
CHAIR SPOHNHOLZ sought clarification on the variation in tax
classes.
MR. WELLER said the average benefit cost rate becomes the
primary component for all employers' rates. Classes 10 and 11
are currently the median of the class structure. That is
multiplied by something either lesser or greater than that to
essentially experience rate employers. He further noted that
tax classes 9 would be subject to 90 percent of that, 8 would be
80 percent and so forth, all the way down to rate class one,
which has an experience factor of .4. That means they should
ideally pay 40 percent of what those in the average tax classes
10 and 11 would pay.
CHAIR SPOHNHOLZ asked for an even more elemental description of
what a tax classification is and how individual jobs are
ascribed to tax classifications.
4:09:36 PM
MR. WELLER explained that federal law mandates that employers
are experience rated. The department does that through a peril
decline method, which means employers are assigned with a lesser
experience a lower rate and those with a higher experience a
higher rate. This is done by looking at average decline in the
employers' payroll. He noted that they must have at least four
quarters of payroll to be subject to an experience rating.
CHAIR SPOHNHOLZ asked what an experience rating is.
MR. WELLER said an experience rating is the relative share of
the average rate that they would pay based on their payroll
decline portion.
4:10:41 PM
MS. WESCOTT, in response to Chair Spohnholz, explained that
experience rating is a long-used term by the U.S. Department of
Labor. Essentially, employers whose payroll has large
fluctuations from quarter to quarter indicates that their
employees were laid off, filing for benefits, or using the
system. Therefore, that employer is experiencing the benefits
of the trust fund and the benefits of the system, as are their
employees. This is contrary to an employer whose payroll is
consistent from quarter to quarter, which indicates their
employees are not being laid off and not drawing benefits from
the system. This employer's experience would be much lower than
an employer whose payroll fluctuates greatly.
4:12:14 PM
REPRESENTATIVE HANNAN surmised that in the context of
unemployment insurance, a high experience rating is bad, and a
low experience rating is good.
MS. WESCOTT replied she wouldn't use the term "bad." She said
the unemployment insurance system exists to provide that partial
wage replacement during periods of time where an employee can be
laid off. Nonetheless, from an employer's perspective, the
lower the rate class they're in the better it is for that
employer because they are paying out a lower rate.
4:13:00 PM
REPRESENTATIVE FIELDS noted that some of this is sectoral - the
construction of industry waxes and wanes with season. He asked
if that is correct.
MS. WESTCOTT confirmed that.
4:13:13 PM
REPRESENTATIVE HANNAN said she assumed that there are other
states that have seasonality to their incomes. In Alaska, for
example, there are huge swaths of industry - from construction
to fisheries - that are always going to be high experience. She
asked if the ranking, rating, and payment rate account for any
industry differences or if seasonality is irrelevant.
MR. WELLER acknowledged that there is a strong correlation
between seasonality and the rate class - the more seasonal the
industry the higher the rate class. He added that less seasonal
more stable employers all find themselves in the lowest rate
class one.
REPRESENTATIVE HANNAN asked if seasonal employers are penalized
by the slower seasons.
MS. WESCOTT said there is nothing in statute that provides for
any waiver or relief to any particular industry.
4:16:57 PM
MR. WELLER resumed his presentation on slide 9, entitled
"Average Benefit cost rate, ABCR/Employer Rate Share/Min one
percent Rate." He explained that the graph depicted on this
slide displays the relationship between the total ABCR and the
employer share. He said at an ABCR of 1.37 or lower the average
rate classes 10 and 11 would be subject to this statutory
minimum. Currently, for 2020 there was an ABCR of 1.28 percent,
which would make the average rate class .82. Under HB 215, the
absolute minimum take would be .82 as opposed to the current 1
percent statutory minimum. He continued to slide 10, entitled
"2020 Rate Classes 1-9, Current Statute V. Proposed Change." He
said that this slide demonstrates how the new experience rated
minimums would affect rate classes 1-9 for the current calendar
year. If there was no minimum in place and included the
solvency adjustment, there would be a negative tax rate for rate
class 1 in 2020. However, if the solvency adjustment were to be
disregarded, the experience rated rate class 1 would be at .38
percent in 2020.
4:20:36 PM
REPRESENTATIVE FIELDS said an employer might pay in more in a
given year than their employees take out when they get laid off.
He asked if that changes from year to year, meaning one year an
employer's employees getting laid off may take less and then the
next year they might take more. He asked if that's generally
accurate.
MR. WELLER answered yes.
REPRESENTATIVE FIELDS asked if Alaska is 50th in the nation in
terms of UI payments.
MS. WESCOTT said Alaska is currently 37th.
REPRESENTATIVE FIELDS asked how much below average Alaska is in
terms of weekly or bi-weekly payments.
MS. WESCOTT said she would follow up with requested information.
REPRESENTATIVE FIELDS explained that he would like to understand
where Alaska is relative to the average in terms of amount of
dollars workers are not getting when they get laid off.
CHAIR SPOHNHOLZ said the entire committee would be interested in
knowing what Alaska's UI payments are and how they fit into the
national context, as well as what wages are in the state of
Alaska.
4:22:23 PM
REPRESENTATIVE HANNAN sought clarification on whether the state
ranking accounts for the number of people being paid as well as
the dollars they are receiving or just the dollars they are
receiving.
MS. WESCOTT explained that the state ranking compares Alaska's
maximum weekly benefit amount to that of the rest of the states.
REPRESENTATIVE HANNAN asked if it disaggregates for the time of
year and job type.
MS. WESCOTT said there are a number of measures that the
department reports on. She noted that Alaska's average weekly
benefit amount in a given year is much lower than 370.
4:24:33 PM
REPRESENTATIVE FIELDS said he would be interested in learning
Alaska's maximum and average compensation over time and adjusted
for inflation to understand if workers today are getting paid
more or less than 20 or 30 years ago.
CHAIR SPOHNHOLZ agreed.
[HB 215 was held over.]
4:25:11 PM
The committee took an at-ease from 4:25 to 4:29.
HB 235-AK WORKFORCE INVESTMENT BOARD:ALLOCATIONS
4:29:58 PM
CHAIR SPOHNHOLZ announced that the next order of business would
be HOUSE BILL NO. 235, "An Act relating to allocations of
funding for the Alaska Workforce Investment Board; and providing
for an effective date."
4:30:16 PM
REPRESENATIVE ADAM WOOL, Alaska State Legislator, as prime
sponsor, provided a brief reintroduction to HB 235. Basically,
he said, it's a program that was renewed three years ago that is
seeking reauthorization. It takes a portion of collected
unemployment funds and distributes them to 10 recipients
according to a formula.
4:30:59 PM
ASHLEY CARRICK, Staff, Representative Adam Wool, Alaska State
Legislature, stated that HB 235 would reauthorize the TVEP
program for another three years, until 2023. She proceeded to
correct a statement from the previous bill hearing, noting that
the governors amended budget added additional funding for the
TVEP program this year into direct allocations, rather than to
the unemployment insurance fund, as was incorrectly stated
previously.
4:31:51 PM
REPRESENTATIVE HANNAN questioned the reason for a three-year
renewal as opposed to a longer period of time.
REPRESENTATIVE WOOL said there's no reason it must be three
years, adding that it could be longer. He explained that they
were trying to repeat what was done in the past.
CHAIR SPOHNHOLZ questioned whether TVEP has ever been
reauthorized for longer than three years in the past.
MS. CARRICK replied the TVEP program was reauthorized for one
year at its inception in 2000. It was reauthorized for three
years for the first time in 2014 and has never been renewed for
a longer period of time.
4:33:07 PM
REPRESENTATIVE RASMUSSEN asked if it is possible to make sure
that this program is always renewed in the first year of a
legislative cycle. She expressed her concern about nearing the
end of session, which makes it difficult to move legislation
through.
CHAIR SPOHNHOLZ said that is a fair point for consideration by
future legislators.
4:33:51 PM
REPRESENTATIVE WOOL suggested a two or four-year renewal instead
of three years so that it wouldn't end up in the middle.
CHAIR SPOHNHOLZ explained if the program is reauthorized for
three years this time it would come up the first year of the
two-year session next time around. After which, future
reauthorization could be set for an even number of years to
avoid this problem from happening in the future.
4:35:23 PM
REPRESENTATIVE STORY said she would prefer to leave the renewal
at three years because Alaska's career and technical education
is constantly changing.
4:36:12 PM
CHAIR SPOHNHOLZ opened public testimony.
4:36:32 PM
DON ETHERIDGE, Alaska American Foundation of Labor & Congress of
Industrial Organizations, reported that the Alaska American
Foundation of Labor and Congress of Industrial Organizations
(AFL CIO) and the Alaska Works Partnership (AWP) are supportive
of HB 235, and have been since its inception. He noted that in
the past, they have asked for a five-year reauthorization
period. He expressed concern about expanding the program
because over the years, programs were added without thinking
about the work and training that would come out of it. He
reiterated that the Alaska AFL CIO supports the program as it
is.
4:37:40 PM
REPRESENTATIVE RASMUSSEN asked Mr. Etheridge why the five-year
renewal hasn't worked in the past.
MR. ETHERIDGE explained that they were attempting to stabilize
the TVEP program so the recipients would know how long they
could count on the funds; however, [the legislature] suggested
that a three-year maximum would allow changes to be considered.
He went on to say the Alaska AFL CIO would consent to a five-
year renewal, adding that the length of renewal isn't important
to them.
4:38:40 PM
CHARLES MCKEE provided comments not on topic with the published
agenda.
4:40:23 PM
DOUG WAIRATH, Northwestern Alaska Career & Technical Center,
expressed his support for reauthorizing TVEP. He stated that
TVEP supports a regional training center network across the
state that provides autonomy and flexibility to meet the unique
needs of each regions' priority industry. The regional training
centers provide workforce development training that would
otherwise need to occur outside the region at a much greater
expense. TVEP funds and supports industry certification in
health care through advanced technical training, which
transitions students into employment as certified nurse aides,
village health aides, and personal care attendants.
Furthermore, NACTEC is the only provider of adult and high
school driver education training in the Nome census area and is
a DMV approved third-party road test examiner. He said this is
important in the region as the budget has become tighter and
more cuts have occurred, which resulted in the loss of the Nome
DMV office. As the state budget is restricted, he said, it
becomes critically important to make earlier outreach to develop
a technically skilled workforce. NACTEC supports TVEP
reauthorization efforts and its expansive reach across Alaska to
train workforces locally to best meet local needs.
4:43:07 PM
CHAIR SPOHNHOLZ closed public testimony.
CHAIR SPOHNHOLZ announced that HB 235 was held over.
HB 113-MILITARY FAMILY EMPLOYMENT PREFERENCE
4:43:28 PM
CHAIR SPOHNHOLZ announced that the final order of business would
be HOUSE BILL NO. 113, "An Act relating to employment
preferences for spouses and children of veterans, disabled
veterans, former prisoners of war, members of the national
guard, and deceased service members."
4:44:07 PM
REPRESENTATIVE FIELDS moved to adopt Amendment 3, [labeled 31-
LS0715\S.4, Wayne, 2/22/20], which read:
Page 6, line 10:
Delete "(i)"
Page 6, line 15, following "Militia;":
Insert "or"
Page 6, lines 16 - 21:
Delete all material.
Page 6, line 28, following "to":
Insert "(i)"
Page 6, line 29:
Delete "(1)(A)(i) of subsection;"
Insert "(1)(A) subsection;
(ii) a dependent child or the spouse of a
person under (1)(A) of this subsection;
(iii) a dependent child or, unless the
surviving spouse has remarried, the surviving the
spouse of a person under (1)(B) of this subsection who
died within the 10-year period immediately preceding
the date of the assessment;"
CHAIR SPOHNHOLZ objected for the purpose of discussion.
4:44:13 PM
REPRESENTATIVE FIELDS stated that the intent of Amendment 3 is
to ensure that every spouse and dependent of an active-duty
service member receives consideration or an interview for a
state job. This amendment makes that clear while deleting
confusing material about adding points. It does, however, leave
the underlying point system in place for veterans and disabled
veterans, so that should the department and the state choose to
return to a point-based system, they retain that authority.
4:45:30 PM
REPRESENTATIVE SHARON JACKSON, Alaska State Legislator, thanked
the committee for working to make HB 113 a comprehensive bill to
employ Alaska's military spouses.
4:46:01 PM
REPRESENTATIVE STUTES asked if the bill sponsor has any
objection to Amendment 3.
REPRESENTATIVE JACKSON answered no.
CHAIR SPOHNHOLZ removed her objection. There being no further
objection, Amendment 3 was adopted.
4:46:48 PM
REPRESENTATIVE STUTES moved to report CSHB 113, Version 31-
LS0715\S, as amended, out if committee with individual
recommendations and the accompanying fiscal notes. Without
objection, CSHB 113(L&C) was moved from the House Labor and
Commerce Standing Committee.
4:48:26 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:48 p.m.