03/12/2025 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB75 | |
| Overview(s): Unemployment Insurance | |
| HB121 | |
| HB123 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 121 | TELECONFERENCED | |
| + | HB 75 | TELECONFERENCED | |
| *+ | HB 123 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 12, 2025
3:19 p.m.
DRAFT
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Carolyn Hall, Co-Chair
Representative Ashley Carrick
Representative Robyn Niayuq Burke
Representative Dan Saddler
Representative Julie Coulombe
Representative David Nelson
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 75
"An Act relating to national criminal history record checks for
certain employees of the Department of Revenue; relating to
allowable absences for eligibility for a permanent fund
dividend; relating to the confidentiality of certain information
provided on a permanent fund dividend application; relating to
electronic notice of debt collection executed on a permanent
fund dividend; and providing for an effective date."
- HEARD & HELD
OVERVIEW(S): UNEMPLOYMENT INSURANCE
- HEARD
HOUSE BILL NO. 121
"An Act relating to the practice of accounting; and providing
for an effective date."
- HEARD & HELD
HOUSE BILL NO. 123
"An Act relating to vehicle rental taxes; relating to the
issuance of subpoenas related to tax records; and providing for
an effective date."
- HEARD & HELD
HOUSE BILL: UNEMPLOYMENT INSURANCE
- REMOVED FROM AGENDA
PREVIOUS COMMITTEE ACTION
BILL: HB 75
SHORT TITLE: PERM FUND; EMPLOYMENT; ELIGIBILITY
SPONSOR(s): REPRESENTATIVE(s) BYNUM
01/31/25 (H) READ THE FIRST TIME - REFERRALS
01/31/25 (H) STA, L&C
02/18/25 (H) STA AT 3:15 PM GRUENBERG 120
02/18/25 (H) Heard & Held
02/18/25 (H) MINUTE(STA)
02/22/25 (H) STA AT 1:00 PM GRUENBERG 120
02/22/25 (H) Heard & Held
02/22/25 (H) MINUTE(STA)
02/27/25 (H) STA AT 3:15 PM GRUENBERG 120
02/27/25 (H) Moved CSHB 75(STA) Out of Committee
02/27/25 (H) MINUTE(STA)
02/28/25 (H) STA RPT CS(STA) 5DP
02/28/25 (H) DP: HOLLAND, HIMSCHOOT, MOORE, STORY,
CARRICK
03/12/25 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 121
SHORT TITLE: ACCOUNTING; PRACTICE PRIVILEGE
SPONSOR(s): REPRESENTATIVE(s) SCHRAGE
02/28/25 (H) READ THE FIRST TIME - REFERRALS
02/28/25 (H) L&C
03/10/25 (H) L&C AT 3:15 PM BARNES 124
03/10/25 (H) -- MEETING CANCELED --
03/12/25 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 123
SHORT TITLE: TAXATION: VEHICLE RENTALS, SUBPOENAS
SPONSOR(s): REPRESENTATIVE(s) MCCABE
03/05/25 (H) READ THE FIRST TIME - REFERRALS
03/05/25 (H) L&C, FIN
03/12/25 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE JEREMY BYNUM
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 75.
TREVOR SHAW, President & CEO
Alaska Society of Certified Public Accountants
Anchorage, Alaska
POSITION STATEMENT: Presented a summary of changes and
sectional analysis relating to a proposed committee substitute
for HB 75.
SENATOR JESSE KIEHL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave invited testimony in support of HB 75.
KARI NORE, External Affairs Director
Alaska Chamber
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in support of HB 75.
GENEVIEVE WOJTUSIK, Director
Permanent Fund Dividend Division
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
75.
PALOMA HARBOUR, Director
Division of Employment & Training Services
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Co-presented the Unemployment Insurance
overview.
LENNON WELLER, Administrative Services Director
Division of Research & Analysis
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Co-presented the Unemployment Insurance
overview.
REPRESENTATIVE CALVIN SCHRAGE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 121.
AMANDA NDEMO, Staff
Representative Calvin Schrage
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Shrage, prime
sponsor, gave a PowerPoint, titled "House Bill 121."
BETH STUART, Chair
Managing Partner
KMPG LLC
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in support of HB
121.
THOMAS NEILL, Chair
Uniform Accountancy Act Committee
Joint American Institute of CPAs/National Association of State
Boards of Accountancy
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony during the hearing
on HB 121.
KAREN TARVER, Former Chair/Legislative Liaison Chair
State Board of Public Accountancy/Alaska Society of Certified
Public Accountants
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in support of HB
121.
REPRESENTATIVE KEVIN MCCABE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 123.
ACTION NARRATIVE
3:19:38 PM
CO-CHAIR ZACK FIELDS called the House Labor and Commerce
Standing Committee meeting to order at 3:19 p.m.
Representatives Coulombe, Burke, Fields, and Hall were present
at the call to order. Representatives Nelson, Saddler, and
Carrick arrived as the meeting was in progress.
HB 75-PERM FUND; EMPLOYMENT; ELIGIBILITY
3:20:00 PM
CO-CHAIR FIELDS announced that the first order of business would
be HOUSE BILL NO. 75, "An Act relating to national criminal
history record checks for certain employees of the Department of
Revenue; relating to allowable absences for eligibility for a
permanent fund dividend; relating to the confidentiality of
certain information provided on a permanent fund dividend
application; relating to electronic notice of debt collection
executed on a permanent fund dividend; and providing for an
effective date." [Before the committee was CSHB 75(STA).]
3:20:32 PM
REPRESENTATIVE JEREMY BYNUM, Alaska State Legislature, as prime
sponsor, presented HB 75. He said HB 75 is an important bill,
particularly for mariners. He paraphrased the second and third
paragraphs of the sponsor statement [included in the committee
file], which read as follows [original punctuation provided]:
The Permanent Fund Dividend is a cornerstone of
economic stability for many residents, but outdated
regulations create unnecessary barriers for Alaskans
pursuing education, maritime careers, and medical
care.
House Bill 75 addresses these issues by modernizing
allowable absences, enhancing program security, and
improving administrative efficiency. HB 75 ensures
that time spent in a U.S. merchant marine academy is
treated the same as attending college, allowing
Alaskans to pursue this vital technical training
without losing their PFD eligibility. The bill also
provides relief for college students who cannot afford
to return home for winter or spring breaks, ensuring
that these short-term absences do not jeopardize their
qualification. Additionally, it simplifies the rules
governing out-of-state medical care, preventing
Alaskans with unexpected health emergencies from being
penalized.
To strengthen program security, HB 75 requires
fingerprint-based background checks for PFD Division
employees who handle sensitive personal data, reducing
the risk of fraud and identity theft. The bill also
makes the PFD applicant list confidential, further
protecting Alaskans from fraudulent claims and
identify theft. Additionally, it improves overall
administrative efficiency by allowing residents to
opt-in to electronic levy notices, cutting costs
associated with printing and mailing.
REPRESENATIVE BYNUM spoke to the updated sectional analysis,
stating that the previous committee of referral had changed
"armed services" to "uniform services".
3:23:25 PM
TREVOR SHAW, President & CEO, Alaska Society of Certified Public
Accountants (AKCPA), as invited testifier, presented a summary
of changes from the original bill version to CSHB 75(STA)
[included in the committee file], which read as follows
[original punctuation provided]:
1. Changes all instances of "armed services to
"uniformed services".
2. Adds Section 3 defining "family members" by
relationship.
3. Adds to Section 3 defining Uniformed Services as
"Army, Navy, Air Force, Marine Corps, Coast Guard,
Space Force, and the Commissioned Corps of the
National 2 Oceanic and Atmospheric Administration
and Public Health Services".
4. Renumbers the following sections.
MR. SHAW noted that the major change was the addition of
merchant mariner training at the Merchant Marine Academy as an
allowable absence for permanent fund dividend (PFD) eligibility.
MR. SHAW further noted that HB 75 would not expand statutory
protections for voluntary out-of-state activities such as Peace
Corps or participation in the Olympic games, for example. He
clarified that CSHB 75(STA) "preserves and aligns protections
already granted to individuals whose careers require extensive
training and certification outside of Alaska." He explained
that existing statute already allows for eligible absence for
those "serving under foreign or coastal articles of employment
aboard an ocean-going vessel of the United States Merchant
Marine." He stated that HB 75 would clarify additional relevant
educational programs that should qualify as allowable absences.
He further stated that an individual who received necessary out-
of-state medical care would not be exempted from PFD
eligibility. He stated that HB 75 would protect students unable
to return home [to Alaska] during their spring or winter breaks,
"as long as they ... return to their educational program." He
stated that PFD Division employees would be required to provide
fingerprints under the proposed legislation, noting that many
professions are subject to Federal Bureau of Investigation (FBI)
background checks, such as nurses, hairdressers, massage
therapists, retail estate appraisers, et cetera. Additionally,
he stated that the PFD applicant list would be confidential
under CSHB 75(STA). He concluded that the proposed legislation
also would allow individuals to opt in to electronic
communications regarding their PFD.
MR. SHAW paraphrased the sectional analysis for CSHB 75(STA)
[included in the committee file], which read as follows
[original punctuation provided]:
Section 1. Requires the Permanent Fund Division to
conduct background checks on and fingerprint its
employees and applicants for employment within the
Division.
Section 2. Modifies the allowable absences for
Permanent Fund Dividend eligibility to include:
• Absences for school breaks and holiday, not
including summer break, during the academic year.
• Education (1) to become a merchant mariner, and (2)
through other vocational programs approved by the
United States Coast Guard.
• Prevents medical absences from limiting the length
of voluntary absences.
Section 3. Provides definitions relating to "family
members" and "uninformed services".
Section 4. Aligns to Sect 1., requiring the Permanent
Fund Division to conduct background checks on and
fingerprint its employees and applicants for
employment within the Division.
Section 5. Makes the names of Permanent Fund Dividend
applicants confidential.
Section 6. Allows an opt-in option for Permanent Fund
Dividend recipients to receive levy notices
electronically.
Section 7. Establishes an effective date of January 1,
2026.
3:27:28 PM
SENATOR JESSE KIEHL, Alaska State Legislature, began by stating
that HB 75 contains half of the elements originally proposed by
the governor in a previous legislature. He further surmised
that the proposed legislation contains "important tune-ups" to
allowable absences, and the safety and efficiency of the PFD.
He concluded that CSHB 75(STA) is not a PFD formula bill;
rather, it is a "clean-up bill," noting that it nearly passed in
the prior year.
3:28:58 PM
KARI NORE, External Affairs Director, Alaska Chamber, gave
invited testimony in support of HB 75. She gave prepared
testimony [included in the committee file], which read as
follows [original punctuation provided]:
The Alaska Chamber was founded in 1953 and is Alaska's
largest statewide business advocacy organization. Our
mission is to promote a healthy business environment
in Alaska. The Chamber has more than 700 members and
represents businesses of all sizes and industries from
across the state, representing 58,000 Alaskan workers
and $4.6 billion in wages.
The Chamber has a formal policy position to support
clarifying vocational training absences for purposes
of receiving PFD benefits. We support the enactment
of clarifying changes to the PFD statute in order to
assure Alaskans who are members of the uniformed
services or those attending merchant marine training
programs remain eligible to obtain their PFD, provided
they have met all other eligibility criteria.
Since 1997, over 700 Alaskans have been recruited,
trained, and placed in deep-sea maritime employment by
attending the Paul Hall Center for Maritime Training
and Education. Many of these candidates were youth,
Alaskan Natives, displaced workers, and veterans who
attended an apprentice program paid for through a
labor-management training trust fund. In so doing,
management can be assured the individuals they hire to
crew their vessels are thoroughly trained to USCG
[United States Coast Guard] standards and uniformly
meet their security, safety, and competency standards.
Furthermore, by recruiting Alaskans for this
apprenticeship opportunity companies in the Alaska
maritime trade, like Alaska Tanker Company, Crowley
Maritime, Matson Navigation, and TOTE Maritime Alaska,
continue to meet their commitment to hire local.
Denying PFD benefits to Alaskans, particularly younger
Alaskans, while engaged in this required training,
discourages them from considering this pathway as a
career opportunity. The purpose for the local hire
effort is for these individuals to be trained outside
and to return to Alaska to spend their earned wages
and enjoy their benefits on their time off.
In closing, the Chamber supports [HB 75] and
encourages swift passage of this straightforward and
good for business bill. Thank you for considering the
Alaska Chamber's comments.
3:31:37 PM
CO-CHAIR FIELDS noted that a transportation company has an
apprenticeship program due to efforts by both former Congressman
Don Young and former Senator Ted Stevens to develop local
workforce. He explained that CSHB 75(STA) was a multi-decade
piece of legislation. He stated that swift passage was his
goal.
3:32:21 PM
REPRESENTATIVE COULOMBE stated that she is in support of
legislation that aids in developing Alaska's workforce. She
noted there is a zero fiscal note. She queried whether current
employees, future employees, or both would be fingerprinted
under CSHB 75(STA).
REPRESENATIVE BYNUM deferred to Ms. Wojtusik.
3:33:14 PM
GENEVIEVE WOJTUSIK, Director, Permanent Fund Dividend Division,
Department of Revenue, replied that, were CSHB 75(STA) to pass,
the division would take six months to develop regulations for
background checks.
3:33:37 PM
REPRESENTATIVE COULOMBE asked whether the exemption for
emergency medical leave was a new exemption.
3:33:58 PM
MS. WOJTUSIK replied that an emergency-related exemption would
be a new piece of statute. She explained that, currently, there
are 16 different allowable absences in Alaska Statute (AS) that
qualify as an emergency. She further explained that there are
exemptions for medical leave and family medical leave, but not
for emergency medical leave.
3:34:26 PM
REPRESENTATIVE NELSON queried the reason for changing armed
services to uniform services in the proposed legislation,
thereby including the National Oceanic and Atmosphere
Administration (NOAA).
3:34:48 PM
REPRESENATIVE BYNUM replied that the change occurred in the
previous committee of referral, House State Affairs Standing
Committee. He explained that the chair of the committee
requested that change be included.
MR. SHAW responded that the change was proposed by
Representative Andi Story in House State Affairs Standing
Committee. He explained that it was technical change that would
create allowable absences for an additional 50 people or less.
3:36:15 PM
REPRESENTATIVE NELSON asserted that NOAA was not militarized.
He stated that he would like to see NOAA removed from the
proposed legislation.
3:36:52 PM
MR. SHAW noted that the Peace Corps also fall under allowable
absences, because of their service as commissioned officers
through a federal agency. He stated their office was open to
refinement of CSHB 75(STA).
3:37:38 PM
REPRESENTATIVE SADDLER echoed concerns about changing the
exemption from "armed services" to "uniformed services". He
shared additional concerns that exemptions are "always expanded,
never contracted."
REPRESENTATIVE SADDLER noted that members of armed services
cannot decline assignments and asked whether members of NOAA or
the public health service could decline moves.
3:39:10 PM
CO-CHAIR FIELDS thanked the various speakers for CSHB 75(STA).
REPRESENATIVE BYNUM thanked the committee members for their time
and stated that his office was always open to questions.
[HB 75 was held over.]
^OVERVIEW(S): Unemployment Insurance
OVERVIEW(S): Unemployment Insurance
3:39:42 PM
CO-CHAIR FIELDS announced that the next order of business would
be the Unemployment Insurance overview.
3:40:15 PM
PALOMA HARBOUR, Director, Division of Employment & Training
Services, Department of Labor & Workforce Development,
introduced herself for the public record.
3:40:29 PM
LENNON WELLER, Administrative Services Director, Division of
Research & Analysis, Department of Labor & Workforce
Development, introduced himself for the public record.
3:40:46 PM
The committee took an at-ease from 3:40 p.m. to 3:42 p.m.
3:42:07 PM
MS. HARBOUR, as co-presenter of the Unemployment Insurance
overview, began by giving an overview of the federal
unemployment tax requirements, located on slide 2 of the
PowerPoint, titled "Unemployment Insurance 101," [included in
the committee file], which read [original punctuation provided]:
• Required federal unemployment taxes paid by
employers are reduced as long as the state maintains a
federally compliant unemployment system (from $420 to
$42 maximum per employee)
• Federal funding for the state's unemployment
insurance program is also reliant on the state
maintaining a federally compliant unemployment system
• Federal requirements include that the state's
unemployment trust fund (UTF) can be used solely for
the payment of unemployment compensation (Federal
Unemployment Tax Act Section 3304(a)(4))
MS. HARBOUR drew committee members' attention to a flow chart on
slide 3, representative of the employer and employee
contributions to the unemployment insurance (UI) program. She
explained that both employers and employees benefit from the
program in times of economic downturn or layoff. She further
explained that the federal requirements are limited to employers
and not every state collects contributions from employees and
stated that [Alaska] has flexibility in how employee
contributions to the trust fund are treated. She stated that
there are two training programs supported by the employee
contributions: the State Training and Employment Program (STEP)
and the Technical Vocational Education Program (TVEP). She
stated that 0.5 percent is the employee minimum tax rate,
explaining that 0.1 percent goes towards STEP and 0.25 percent
goes toward TVEP. She noted that STEPs pilot program was
started in 1989, made permanent in 1996, and that the 0.1
percent employee contribution has not changed since its
inception. She further noted that TVEP was started in 2000 with
an employee contribution of 0.1 percent and has risen steadily
over time with regular authorization from the legislature. She
stated that TVEP was made permanent in 2024.
3:46:14 PM
REPRESENTATIVE COULOMBE asked for confirmation that STEP and
TVEP money comes only from employee contributions, and not every
state requires employee contributions.
MS. HARBOUR confirmed that is correct.
REPRESENTATIVE COULOMBE further asked for clarification that
employer contributions are required to go towards benefits.
3:46:41 PM
MS. HARBOUR replied that Alaska Statute (AS) dictates the amount
of employer contributions to the system and confirmed that the
employer contributes to the benefits system.
3:46:56 PM
REPRESENTATIVE COULOMBE asked for confirmation that a percentage
of employee paychecks are taken for training. She additionally
asked for confirmation that TVEP has a set list of programs for
which the money is put into whereas STEP is more competitive.
MS. HARBOUR confirmed that is correct.
3:47:29 PM
CO-CHAIR FIELDS asked how the STEP process application works.
MS. HARBOUR explained that STEP funding was appropriated by
legislature to the Alaska Workforce Investment Board. She
further explained that appropriated funds are made available to
training programs to apply for grant solicitation annually in
the spring. She noted that the Alaska Workforce Invest Board
tries to make awards no later than July 30.
MS. HARBOUR noted that both employee and employer are meant to
share a portion of the system cost, meaning that increased
diversion increases the cost of the employer contributions. She
reported that employee contribution is currently 0.35.
MS. HARBOUR drew committee members' attention to the table chart
on slide 4, which represents the 21-employer unemployment tax
rate classes.
MS. HARBOUR noted that employers with less than four quarters of
wages are assigned an industry-tax rate based on other employers
in that same industry that have more than four quarters of
wages. She stated that employers with more than four quarters
of wages are grouped into 21 different rate classes that are
supposed to pay an experience-based tax rate. She explained
that "large fluctuations in wages ... pay higher tax rate ...
[and] lower fluctuations ... pay a lower tax rate." She further
explained that, due to the solvency of the trust fund, all 20
non-penalty rate classes are paying the statutory minimum one-
percent tax rate. She further noted that the twenty-firsttax
rate class is 5.4 percent and explained that it is assigned to
employers with delinquent filings or payments.
MS. HARBOUR moved to slide 5 and drew committee members'
attention to a bar graph, whose x-axis represents the current
benefits schedule from January 2020 to November 2024, with the
y-axis representative of the number of claimants.
MS. HARBOUR described the minimum and maximum claims and
benefits, which read [original punctuation provided]:
Minimum base wage $2,500 = Benefit of $56 per week
Maximum base wage $42,000 = Benefit of $370 per week
Dependent allowance $24 per, max of 3
$45.3 million paid out in FY2024
[19,651] total claimants in 2024
MS. HARBOUR noted that Alaska is one of 13 states with dependent
allowance. She further reported that Alaska is currently
experiencing a historic low in claim filings and noted that
Alaska was experiencing historic lows prior to the COVID-19
pandemic. She reported that in 2024, DOLWD paid out 19,651
total claimants.
MS HARBOUR concluded by stating that, due to the historic low
claim filings and Alaska's high covered claim wages, the annual
revenue into the trust fund far exceeds the annual cost of
benefits.
3:52:31 PM
REPRESENTATIVE SADDLER questioned whether the unemployment
benefits are designed to provide a guaranteed basic income
sufficient to live. He noted that a person with three
dependents could claim approximately $1,700 a month in benefits.
3:53:01 PM
MS. HARBOUR replied that the unemployment benefits are meant to
sustain an individual as they are seeking new employment and
referred to the benefits as a stopgap.
3:53:19 PM
MS. HARBOUR, in response to questions from Co-Chair Fields,
stated that the unemployment rate was last changed in
"legislative year 2008, calendar year 2009." She further stated
that the allowance for dependents has not been updated since its
implementation. She stated that she could not recall when the
dependent allowance was instated. She further stated that
benefits in general are intended to support the economy when
there is a significant reduction of force. She reiterated that
only 13 states have a dependent allowance.
MR. WELLER, in response to a question from Co-Chair fields,
responded that the dependent allowance was first implemented in
1979 at roughly $16 and was increased to $24 in 1983.
CO-CHAIR FIELDS requested an inflation adjustment to the numbers
provided by Mr. Weller.
3:54:57 PM
MS. HARBOUR continued with the presentation, citing "in Fiscal
Year 2024, the Unemployment Trust Fund brought in $169.5 million
in revenue and only paid out $45.3 million in benefits."
3:55:31 PM
MR. WELLER drew committee members' attention to three line
graphs on slide 6 of the presentation, noting that they are
representative of the relationship between chargeable benefit
costs to the system, net UI contributions, and the resulting
trust fund balance. He noted that the line graphs tend to
correspond to activity in the economy, explaining that the trust
fund balance corresponded to national and state-level recession,
such as the 2008 housing crisis and the COVID-19 pandemic. He
further noted that the trust fund balance has increased
significantly over time since the 2000s. He stated that current
statutes do not have the parameters to lower rates for
exceptionally low costs. He noted that, while tax rates
currently are sitting at statutory minimums, DOLWD is still
"pulling in far more than we need to." He stated that the
resulting fund balance is beyond targets and has no current
mechanism for relief. He identified the minimum [tax] rates as
a significant component and stated that the benefits schedule
has an additional affect.
3:59:05 PM
REPRESENTATIVE SADDLER noted that slides 5 and 6 of the
PowerPoint show an influx of claims during 2020. He asked an
additional question about the 19,651 total claimants in 2024.
MR. WELLER replied that an individual can qualify for up to 26
weeks of benefits, noting that the numbers month to month could
be representative of repeat claimants.
REPRESENTATIVE SADDLER asked for historical averages, not
including 2020, given the COVID-19 pandemic.
MR. WELLER responded that the total number of claimants
fluctuates and typically increases as the employee base
experiences growth. He identified a different figure that might
better answer the question as the insured unemployment rate,
which, he explained, was "individuals filings as a percentage of
individuals covered by the program." He stated that this figure
ranged between 2.5 percent and 5.5 percent, in the past 15 to 20
years, and further noted that it fluctuates in correlation with
Alaska's highly seasonal economy.
4:01:25 PM
REPRESENTATIVE COULOMBE reiterated that the balance of the trust
fund is over $700 million. She noted that the fund has to be
used for benefits but is constrained by statute. She asked what
the legislature can do to help.
4:02:13 PM
MS. HARBOUR emphasized that revenues are currently exceeding
costs and identified some options. She stated that the
legislature could increase costs and adjust the benefits
schedule. She further stated that the legislature could
decrease revenue, and divert more revenue into training, thus
reducing the statutory minimum.
MS. HARBOUR stated that all of the "levers" could be pulled, and
the trust fund would remain solvent.
4:02:54 PM
REPRESENTATIVE COULOMBE asked if the legislature could divert
funds from STEP or TVEP to something like family paid leave.
MS. HARBOUR stated that the legislature could do what
Representative Coulombe described with change to statute. She
also stated that the funds would have to come from employee
contributions or from another program. She said 0.35 of
employee contributions are diverted into the trust fund.
4:03:36 PM
CO-CHAIR FIELDS stated they would be introducing a committee
bill.
4:03:43 PM
REPRESENTATIVE CARRICK asked which items come out of the
employee portion and employer portion of the trust fund. She
further inquired why only the employee portion was subject to
legislative change, not the employer portion.
4:04:09 PM
MS. HARBOUR offered her understanding that training funding was
established to provide state infrastructure to re-employ
unemployed Alaskans. She explained that the employee
contributions go into three places: STEP, where funding is
competitively awarded; TVEP, where funding goes towards named
recipients in statute; and the unemployment trust fund.
MR. WELLER, in response to a previous statement made by Ms.
Harbour, clarified that 0.15 from employee contributions is
diverted into the unemployment trust fund, while 0.35 from
employee contributions is diverted into training programs. He
spoke to a solvency adjustment, explaining that employers could
pay in the backend any potential loss in the fund, were the
balance to fall below actuarial standards.
REPRESENTATIVE CARRICK asked what the UI balance should be to
remain solvent, assuming a stable population.
4:07:25 PM
MR. WELLER replied that, historically, the full solvency ratio
should be between three and three-point-three percent of covered
wages. He stated that currently the reserve has approximately
4.5 percent. He further noted that a solvency tax could be
applied when the reserve goes below three percent and that
credit could be applied when the reserve goes above 3.3 percent.
MS. HARBOUR stated that there was currently $180-190 million in
excess above the target reserve ratio.
REPRESENTATIVE CARRICK asked for clarification that those
numbers were above 3.3 percent.
MS. HARBOUR clarified that her numbers were from September 2024
and stated that, at that time, the trust fund balance was $724.4
million at a reserve ratio of 4.44 percent, $186.2 million above
the target reserve ratio of 3.3 percent. She noted that the
fund, at the target reserve ratio of 3.3 percent, would sit at
approximately $540 million. She reiterated that revenues were
currently exceeding costs by about three times, and that there
was currently no pathway in AS to bring the fund into alignment.
4:09:35 PM
CO-CHAIR FIELDS shared that he was concerned by a lack of paid
parental leave in Alaska pushing parents out of workforce. He
repeated that he would be drafting a committee bill regarding
the UI reserve and thanked Ms. Harbour and Mr. Weller for their
presentation.
HB 121-ACCOUNTING; PRACTICE PRIVILEGE
4:09:55 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 121, "An Act relating to the practice of
accounting; and providing for an effective date."
4:11:20 PM
REPRESENTATIVE CALVIN SCHRAGE, Alaska State Legislature, as
prime sponsor of HB 121, gave a prepared sponsor statement
[included in the committee file], which read as follows
[original punctuation provided]:
The accounting profession is essential to
Alaska's economy, ensuring financial transparency for
businesses, organizations, and government entities.
However, outdated regulatory barriers are limiting the
number of qualified professionals entering the field.
The demand for accountants is growing nationwide, with
employment in the field expected to increase by 6%
over the next decade. However, the number of CPA's
practicing in Alaska is shrinking. Between fiscal
years 2019 and 2024, CPA licensure in the state grew
by only 3%. If this trend continues, Alaska will face
a worsening shortage of accounting professionals,
limiting access to essential financial services.
HB 121 addresses these issues by:
• Making technical and housekeeping changes to
practice privilege for out-of-state firms to allow
them greater flexibility.
• Removing the outdated and onerous requirement that
students complete an extra year of college, beyond the
120-credit hour bachelor's degree with a concentration
in accounting.
These changes align Alaska with national trends
toward greater flexibility in CPA licensure while
maintaining professional integrity. Candidates will
still be required to pass the Uniform CPA Exam, meet
education and professional experience requirements,
ensuring competency without imposing unnecessary
costs. I encourage my colleagues to support this
important legislation.
4:13:17 PM
AMANDA NDEMO, Staff, Representative Calvin Schrage, Alaska State
Legislature, on behalf of Representative Schrage, prime sponsor,
moved to the second slide of the PowerPoint [included in the
committee file], titled "HB 121 Accountancy Act Changes," which
read as follows [original punctuation provided]:
The accounting profession in Alaska faces workforce
shortages.
Current regulations create unnecessary barriers to
entry.
Aligning with national standards will improve access
to services.
HB 121 makes key changes to modernize the profession.
MS. NDEMO reported that there had been a 30-percent decrease in
candidates sitting for the exam nationally since 2016. She
moved to the third slide and stated that the proposed
legislation would make two key changes relating to the education
requirements for certified public accountant (CPA) licensure and
practice privileges for out-of-state firms.
MS. NDEMO moved to the fourth slide, giving an overview of the
current education requirements for CPAs in Alaska, which read as
follows [original punctuation provided]:
Current requirements:
• 150-credit hours AND two years of experience for CPA
licensure.
National Trends:
• 30 states have introduced legislation removing the
150 credit hour requirement for licensure.
• Many states are moving toward a 'dual pathway'
a) 150 credit hour + one year of experience OR
b) 120 credit hours (Bachelors degree) + two years of
experience
MS. NDEMO noted that the current education requirements are
higher than a standard bachelor's degree, which typically
consists of 120 credit hours. She further noted that the
current requirements add an additional year of college. She
moved to the fifth slide and gave an overview of the proposed
changes to the education requirements under HB 121. The fifth
slide read as follows [original punctuation provided]:
HB 121:
• Removes the 150 credit hour requirement for CPA
licensure (moving to a bachelors + two years of
experience model).
• Retains essential qualification requirements
O Passing CPA exam
O Bachelor's degree with an accounting concentration
O Two years of relevant experience
MS. NDEMO moved to the sixth slide and gave an overview of the
current out-of-state practice privileges. The sixth slide read
as follows [original punctuation provided]:
Current requirements for out-of-state firms
•AS 08.04.240(k)
•Firms that do not have an office in Alaska but
provide, or offer to provide, attest functions in the
state are still required obtain CPA firm permits.
"Firm" means a sole proprietorship, partnership,
limited liability company, corporation, or other legal
entity that can organize as a legal person under state
law. AS 08.04.680(6).
"Attest function" means audit, review, examination of
prospective financial information, and other services
as described in AS 08.04.680(1).
MS. NDEMO added that HB 121 would align practice privilege for
out-of-state firms with out-of-state individuals. She moved to
the seventh slide and gave an overview of out-of-state
individual [CPA] privileges, which read as follows [original
punctuation provided]:
Current requirements for out-of-state individuals (AS
08.04.420 and 08.04.422)
•Licensed to practice public accounting in another
state
•The individual's licensing state satisfies
substantial equivalency requirements to the
qualifications required of an applicant for a license
in Alaska.
•Principal place of business for the practice of
public accounting is in that other state
•Consent to Alaska's jurisdiction and disciplinary
authority of the board
•Assign home state's board as agent for service of
process
•Do not need to provide notice, pay a fee, or submit
documentation
CPA license: license granted by the state of
application after all education, exam, and experience
requirements have been met.
"Principal place of business" office location
designated by an individual for the purposes of
substantial equivalency and reciprocity. AS
08.04.680(17).
"Practice privilege" means a practice privilege
authorized under AS 08.04.420. AS 08.04.680(15).
MS. NDEMO noted that the framework allows out-of-state
individual CPAs to serve Alaska clients without facing
additional licensure barriers while ensuring professional
accountability. She further noted that these privileges are not
extended to out-of-state firms under the current law.
MS. NDEMO moved to the eighth slide, stating that out-of-state
firms are required to obtain a separate Alaska firm permit, even
if they do not have a physical office in the state. She gave an
overview of how HB 121 would address this inconsistency, which
read as follows [original punctuation provided]:
HB 121 -Firm mobility
•Provides for firm mobility
•Aligns firm practice privilege with existing
individual CPA practice privilege.
•Reduces administrative burdens.
•Maintains regulatory oversight.
MS. NDEMO moved to the ninth slide, giving an overview of the
impacts of HB 121, which read as follows [original punctuation
provided]:
Benefits of HB 121
Increases the pipeline of CPA candidates
Encourages business growth and supports business needs
Regulatory oversight remains intact
Makes Alaska a more accessible market for accounting
professionals.
MS. NDEMO moved to the tenth slide, asserting that HB 121 would
ensure that high professional standards are upheld. She stated
that out-of-state individuals and firms would remain subject to
oversight of the Board of Accountancy in their home state and
Alaska's Board of Public Accountancy as a condition of granting
practice privilege.
4:19:09 PM
BETH STUART, Chair, Managing Partner, KMPG LLC, stated that she
obtained her CPA licensing in 1996 and has maintained licensure.
She asserted that accounting professionals around the country
are concerned about the decline of people entering the
profession. She reported that studies have shown that the
decline was partly due to time and costs of required education
beyond a bachelor's degree. She stated that there was a "wave
of legislation around the country" to remove the soft 30-credit
requirement, which she noted are not required to be in
accounting or business. She asserted that removing this
requirement would not be detrimental to the quality of education
or accounting work; rather, the removal of the requirement would
reduce professional and licensure barriers. She stated that the
State Board of Accounting supports HB 121 and additionally
stated that it would align firm mobility with individual
mobility, as well as aligning Alaska's mobility laws with most
other states and the Uniform Accountancy Act. She thanked the
committee members for their consideration of HB 121.
4:21:38 PM
THOMAS NEILL, Chair, Uniform Accountancy Act Committee, Joint
American Institute of CPAs/National Association of State Boards
of Accountancy (AICPA/NASBA), explained that he was the current
chair of the AICPA University of Alaska Anchorage (UAA)
committee, which is joint committee of AICPA and NASBA. He
reported that there are efforts around the country to modify
model legislation in place to eliminate the 30-hour requirement
or create additional pathway that allows a bachelor's degree in
order to address the shrinking CPA population due to retirements
and firm mergers and the issue of a lack of people coming into
the profession. He stated that HB 121 would simplify the
educational requirement for CPA licensure. He stated that he
had additionally reviewed mobility requirements within HB 121
and stated that it aligned with proposed model legislation. He
concluded by stating that HB 121 would not diminish existing
public protection provisions in statute and welcomed questions
from committee members.
4:23:16 PM
REPRESENTATIVE SADDLER asked for clarification that a graduate
with a bachelor's degree in accounting was not automatically
licensed to work as an accountant.
4:23:43 PM
MS. STUART responded that an individual must have a bachelor's
degree in accounting with a minimum number of accounting-,
business-, and finance-related classes. Additionally, she
explained that an individual must pass the uniform CPA exam,
which is a national exam that contains four parts of competency-
based exams. Finally, one must also have two years of
experience working in relevant work under a licensed CPA.
REPRESENTATIVE SADDLER asked where the 30-hour requirement comes
in to the current requirements for licensure.
MS. STUART explained that an individual needs 150 credit hours.
She explained that a bachelor's degree typically consists of 120
credit hours, meaning an individual would need to take an
additional 30 hours. She noted that there was no specification
on the type of classes needed to make up the remainder 30
credits. In response to a follow-up question from
Representative Saddler, confirmed that his understanding of the
requirements was correct.
4:26:01 PM
KAREN TARVER, Former Chair/Legislative Liaison Chair, State
Board of Public Accountancy/Alaska Society of Certified Public
Accountants (AKCPA), stated she has practiced accounting in
Alaska for the past 30 years. She stated that the Alaska
Society of CPAs consists of both CPAs and CPS candidates. She
noted that the legislative committee met recently and voted in
favor of HB 121. She testified that HB 121 would modernize the
path for CPA licensure, thus allowing more people to become CPAs
in Alaska. She asserted that many of her employees had finished
their bachelor's degree with 120 credits and had challenges
getting the additional 30 credits with increasing
responsibilities and personal obligations due to student loans
or financial obligations. She further reported that many put
off getting the additional 30 credits in favor of working upon
completion of the bachelor's towards their two-year working
requirement for licensure. She shared a personal anecdote about
her son who wanted to become a CPA. She stated that HB 121
would allow licensed CPAs in other states to work in Alaska and
vice versa, noting that many clients, in Alaska or other states,
are in desperate need of licensed CPAs. She noted that firm
mobility was a long-term project of the State Board of Public
Accountancy and AKCPA. She asserted that firm mobility would
not diminish the public protection provisions in Alaska Statute
(AS). She repeated that the AKCPA was in support of HB 121.
4:29:44 PM
REPRESENTATIVE COULOMBE offered her appreciation for HB 121.
4:30:08 PM
REPRESENTATIVE CARRICK asked for clarification of the credit
hour requirement for current licensure of CPAs. She asked
whether the credit requirements necessitate an extra year of
school.
4:30:28 PM
REPRESENTATIVE SHRAGE stated that the requirements to become CPA
were found under AS 08.04.100, with the education and experience
requirements found under AS 08.04.120. He clarified that 150
credit hours are currently required, which can be made up with a
bachelor's degree in accounting or a bachelor's degree with a
concentration in accounting. He stated that, after that, an
additional 30 credit hours are required.
4:31:20 PM
REPRESENTATIVE CARRICK asked whether students in accounting
typically graduate and go back to school for the additional 30
credits or stay in school until completion of the credit hour
requirements.
REPRESENTATIVE SHRAGE shared a personal anecdote, noting that
students did a combination of both while he was a student at
UAA. He opined that the additional 30 credits do not have any
value for the students understanding of the practice of
accounting or better qualify them for accounting work.
4:32:24 PM
CO-CHAIR HALL queried the rationale behind the effective date.
4:32:32 PM
REPRESENTATIVE SHRAGE replied that January 2026 was chosen to
allow [DCCED] to make any necessary regulatory changes before
the proposed legislation would take effect.
4:32:48 PM
REPRESENTATIVE SHRAGE, in regard to a question from
Representative Saddler regarding what one cannot do without a
CPA license, replied that one cannot practice on their own
without a CPA license. He stated that an individual can work in
accounting under the supervision of CPA without meeting licensee
requirements. He stated that one cannot do that work
independently without passing the national exam for licensure
and working under a licensed CPA for two years. He further
deferred to Ms. Stuart to ensure his recollection was correct.
4:33:33 PM
MS. STUART stated that Representative Shrage's description was
accurate. She confirmed that one could not provide independent
accounting or tax services without a CPA license. She noted
that her firm will not hire anyone who is not CPA-eligible and
further stated that one could not get promoted to manager
without a license at her firm.
4:34:05 PM
REPRESENTATIVE COULOMBE asked for a fiscal note.
4:34:17 PM
MS. NDEMO stated that she would pass the fiscal note to the
committee.
REPRESENTATIVE SHRAGE stated that there was a zero fiscal note
from DCCED.
4:34:40 PM
CO-CHAIR FIELDS set an amendment deadline for HB 121.
[HB 121 was held over.]
4:35:24 PM
The committee took a brief at-ease at 4:35 p.m.
HB 123-TAXATION: VEHICLE RENTALS, SUBPOENAS
4:35:48 PM
CO-CHAIR FIELDS announced that the final order of business would
be HOUSE BILL NO. 123, "An Act relating to vehicle rental taxes;
relating to the issuance of subpoenas related to tax records;
and providing for an effective date."
4:35:58 PM
REPRESENTATIVE KEVIN MCCABE, Alaska State Legislature, as prime
sponsor, gave the sponsor statement for HB 123 [included in the
committee file], which read as follows [original punctuation
provided]:
HB 123 fixes Alaska's broken vehicle rental tax system
with a smarter, fairer approach. The state's 10%
excise tax on passenger vehicle rentalsincluding Turo
rentalshas sparked confusion and legal battles,
leaving everyday Alaskan hosts to fend for themselves
while platforms like Turo avoid collection duties.
Last year, Senate Bill 127 tried to clarify this by
requiring platforms to collect an 8% tax and remit it
to the Department of Revenue, while shielding hosts
from retroactive penalties. It passed with bipartisan
support, but Governor Dunleavy vetoed it, leaving the
issues unresolved. HB 123 steps in with a better plan.
This bill cuts the tax from 10% to 9% for all
passenger vehicle rentals and cuts it even further to
7% for other vehicle rental platform companies such as
Turo and Getaround lower rates than SB 127's 8%,
delivering bigger savings for renters and businesses.
It protects vehicle rental platform company hosts by
blocking the Department of Revenue from chasing back
taxes on prebill rentals, ending unfair enforcement
like bank garnishments. Vehicle rental platforms must
now collect and remit the tax, streamlining the
process without burdening non-platform rentals like
those on Craigslist or Facebook Marketplace.
HB 123 resolves the legal gray area that has pitted
the state against platforms such as Turo and
Getaround, aligns state and local taxeslike
Anchorage's 8%for consistency, and supports Alaskans
earning extra income. It's a practical reboot of SB
127's intent, with lower taxes, less red tape, and
real relief. This is a win for affordability,
competition, and fairnessa system built for Alaska's
future.
REPRESENTATIVE MCCABE further noted that the Department of
Revenue (DOR) sued Turo several years ago, and as a result, the
judge rules that Turo cars and rental cars were "similarly
situated." He further noted that owed taxes amount to
approximately $4,000-$6,000 among as many as 1,500 people in
Alaska.
4:41:50 PM
REPRESENTATIVE BURKE asked whether the litigation between DOR
and Turo was current.
4:42:01 PM
REPRESENTATIVE MCCABE stated that he was not aware of any
current court cases. He further stated that DOR put out a
notice that the taxes must be collected.
4:42:29 PM
REPRESENTATIVE SADDLER noted that the proposed legislation would
put the onus to collect taxes on the Turo application ("app").
He asked whether Turo collected taxes in other jurisdictions.
4:42:42 PM
REPRESENTATIVE MCCABE replied that the Turo app does have the
ability to collect taxes through the app.
4:42:59 PM
REPRESENTATIVE CARRICK offered her support for the intent of the
legislation, particularly the avoidance of retroactive
penalties, which she remarked would be very difficult to
collect. She remarked that she found the differential rate
between Turo versus regular car companies frustrating, as Turo
"has every ability ... to pay and remit this tax as any other
car company." She asserted that, ultimately, the tax is paid by
the end-user, not the person renting out cars through the
platform. She queried the reason for the differential rate and
suggested lowering all the taxes uniformly.
4:44:31 PM
REPRESENTATIVE MCCABE identified the protection of users in
Alaska from retroactive taxes as his primary goal of the
proposed legislation. He stated that it was unknown how much
money Turo would bring in [through taxes] and reminded committee
members that the tax goes towards the state parks.
4:45:20 PM
CO-CHAIR FIELDS clarified that about half of the tax goes toward
the Department of Transportation (DOT) and about half of tax
goes towards the state parks. He likened the tax to a "user
fee."
4:45:30 PM
REPRESENTATIVE MCCABE further noted that the percentage under HB
123 was negotiated and agreed upon by the rental car companies
and by Turo. He remarked that he did not particularly care
about the exact tax percentage.
4:46:08 PM
REPRESENTATIVE CARRICK stated that she found an issue with the
differential rate, given that the end-user is the same
regardless of the platform. She further stated that Turo has
been evading taxes in Alaska for many years. She said that she
would like to see the same tax rate, but that she otherwise
supported the proposed legislation.
REPRESENTATIVE MCCABE reminded committee members that rental
recreational vehicles (RVs) and motorhomes are taxed at a
differential rate of 3 percent. He stated that Turo doesn't
consider themselves a rental car company; rather, they consider
themselves a platform, with the car-owner as the host. He
offered his understanding that the differential tax rate was the
rental car companies' recognition of Turo as lacking a brick-
and-mortar store.
REPRESENTATIVE CARRICK commented that Amazon was not a store.
4:47:29 PM
REPRESENTATIVE COULOMBE asked for confirmation that Turo does
not pay taxes.
REPRESENTATIVE MCCABE replied yes.
REPRESENTATIVE COULOMBE asked what would happen if HB 123 did
not become law.
REPRESENTATIVE MCCABE offered his belief that the State of
Alaska would try to collect tax. He offered his belief that
some Turo hosts are finding a way to collect the tax.
4:48:45 PM
CO-CHAIR FIELDS discussed amendment deadlines.
[HB 123 was held over.]
4:48:57 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
[4:49] p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2025_03_12_HL&C_UI_101_Presentation.pdf |
HL&C 3/12/2025 3:15:00 PM |
Overview: Unemployment Insurance |
| HB 121 presentation 3.12.24.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 121 |
| HB 121 - Sectional Analysis.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 121 |
| HB 121 - Sponsor Statement.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 121 |
| HB0121A.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 121 |
| HB0123A.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 123 |
| HB123.VerA.SectionalAnalysis.3.5.25.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 123 |
| HB123.VerA.SponsorStatement.3.5.25.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 123 |
| HB123.VerA.FiscalNote.DOR.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 123 |
| HB 75 Version B Text.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 |
| HB 75 Sponsor Statement Version B.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 |
| HB 75 Sectional Analysis Version B.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 |
| Hb 75 Version B Summary of Changes .pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 |
| HB 75 Companion Bill - SB 77 Support Letter from Tote Maritime.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 SB 77 |
| HB 75 Companion Bill - SB 77 Support Letter from Alaska Chamber.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 SB 77 |
| HB 75 Companion Bill - SB 77 Support Letter from Matson.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 SB 77 |