01/30/2020 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB50 | |
| SB76 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 50 | TELECONFERENCED | |
| += | SB 76 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
January 30, 2020
1:30 p.m.
MEMBERS PRESENT
Senator Click Bishop, Chair
Senator Gary Stevens, Vice Chair
Senator Mia Costello
Senator Joshua Revak
Senator Elvi Gray-Jackson
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 50
"An Act imposing an annual educational facilities maintenance
and construction tax on net earnings from self-employment and
wages; relating to the administration and enforcement of the
educational facilities maintenance and construction tax; and
providing for an effective date."
- MOVED CSSB 50(L&C) OUT OF COMMITTEE
SENATE BILL NO. 76
"An Act repealing the Workers' Compensation Appeals Commission;
relating to decisions and orders of the Workers' Compensation
Appeals Commission; relating to superior court jurisdiction over
appeals from Alaska Workers' Compensation Board decisions;
repealing Rules 201.1, 401.1, and 501.1, Alaska Rules of
Appellate Procedure, and amending Rules 202(a), 204(a) - (c),
210(e), 601(b), 602(c) and (h), and 603(a), Alaska Rules of
Appellate Procedure; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 50
SHORT TITLE: EMPLOYMENT TAX FOR EDUCATION FACILITIES
SPONSOR(s): SENATOR(s) BISHOP
02/11/19 (S) READ THE FIRST TIME - REFERRALS
02/11/19 (S) L&C, FIN
04/16/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/16/19 (S) Heard & Held
04/16/19 (S) MINUTE(L&C)
01/28/20 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
01/28/20 (S) Heard & Held
01/28/20 (S) MINUTE(L&C)
01/30/20 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 76
SHORT TITLE: REPEAL WORKERS' COMP APPEALS COMMISSION
SPONSOR(s): SENATOR(s) WIELECHOWSKI
03/06/19 (S) READ THE FIRST TIME - REFERRALS
03/06/19 (S) L&C, JUD, FIN
01/28/20 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
01/28/20 (S) Heard & Held
01/28/20 (S) MINUTE(L&C)
01/30/20 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
BRANDON SPANOS, Deputy Director
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Responded to questions related to SB 50.
NANCY MEADE, General Council
Administrative Staff
Alaska Court System (ACS)
Juneau, Alaska
POSITION STATEMENT: Provided the Alaska Court System's
perspective on SB 76.
DEIRDRE FORD, Chair
Alaska Workers' Compensation Appeals Commission (WCAC)
Anchorage, Alaska
POSITION STATEMENT: Provided the commission's perspective on SB
76.
ERIC CROFT, Attorney
representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 76.
HANNA LAGER, Director
Administrative Services Division
Department of Labor and Workforce Development
Juneau, Alaska
POSITION STATEMENT: Provided information about the fiscal note
for SB 76.
SENATOR WIELECHOWSKI
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As sponsor of SB 76, provided statistical
information on the number of workers' compensation cases.
DAVID DUNSMORE, staff
Senator Bill Wielechowski
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing on SB 76, commented on
statistical information on the number of workers' compensation
cases, on behalf of the sponsor.
ACTION NARRATIVE
1:30:50 PM
CHAIR CLICK BISHOP called the Senate Labor and Commerce Standing
Committee meeting to order at 1:30 p.m. Present at the call to
order were Senators Stevens, Gray-Jackson, Costello, Revak, and
Chair Bishop.
SB 50-EMPLOYMENT TAX FOR EDUCATION FACILITIES
1:32:07 PM
CHAIR BISHOP announced the consideration of SENATE BILL NO. 50,
"An Act imposing an annual educational facilities maintenance
and construction tax on net earnings from self-employment and
wages; relating to the administration and enforcement of the
educational facilities maintenance and construction tax; and
providing for an effective date."
He stated that this is the third hearing for SB 50, public
testimony was taken during the last hearing [and the committee
adopted a committee substitute (CS) for SB 50, Version S]. He
noted that Mr. Spanos was online to respond to questions Senator
Stevens posed during the last hearing.
SENATOR STEVENS asked how the fees would be collected for self-
employed individuals.
1:33:25 PM
BRANDON SPANOS, Deputy Director, Tax Division, Department of
Revenue (DOR), Anchorage, Alaska, said the Department of Labor &
Workforce Development currently collects unemployment insurance
from employers and employees. SB 50 would implement a tax of $30
for each individual. The DOR's fiscal note reflects collecting
from employers and self-employed individuals, so it would do
both. He envisioned that self-employed individuals would submit
some type of a return. Currently, the administrative section in
AS 43 requires an electronic filing of any tax return or report.
Unless the bill adds a paper option, filing for the $30 head tax
would require an electronic filing. A provision in the bill
would allow individuals who cannot file electronically to obtain
a waiver. He anticipated that most self-employed individuals
would file their return through DOR's online system to pay the
$30 tax. The portal already exists for this secure submission,
he said.
SENATOR STEVENS asked how DOR will ensure this happens and how
fishermen will know they must pay this tax, particularly those
from out of state.
MR. SPANOS said the information would likely be included when
fishermen obtain their licenses. He explained that to collect
taxes from marijuana-grower taxpayers, the division works with
the Department of Commerce, Community and Economic Development
(DCCED) since these individuals obtain licenses. He envisioned
the process to collect the annual $30 tax would be similar.
SENATOR STEVENS commented that everyone on commercial boats is
required to have a license, so notices would be sent to
everyone. He asked whether DOR would be able to withhold
licenses if fishermen did not pay.
MR. SPANOS replied the department has the ability to assess
taxpayers who are not paying their taxes. He envisioned that DOR
would likely do a cost-benefit analysis to determine if it was
in the state's best interest to try to collect. He anticipated
that the collection efforts would likely cost more than the $30
tax.
SENATOR STEVENS commente that if word got out that the DOR would
not pursue collections, no one would pay their taxes.
MR. SPANOS responded that the department might consider other
options. One option would be for payors to withhold the tax. The
tax code states that professional licenses in the state will be
suspended for those in arrears. The DOR notifies the Department
of Commerce, Community and Economic Development (DCCED) when
corporate taxpayers are in arrears and subsequently DCCED has
suspended their licenses. It certainly would be possible to
suspend fishermen's licenses, he said.
SENATOR STEVENS said he was comfortable with the answers, but
the Senate Finance Committee may want to consider this further
to ensure that licenses are suspended for nonpayment.
CHAIR BISHOP agreed. He commented that possible tax collection
mechanisms exist, because the education head tax was collected
from 1959-1980.
SENATOR GRAY-JACKSON mentioned that during the last hearing she
indicated she would contact the Anchorage School Board to submit
comments on the bill. She related that she had a conversation
with the board chair who will look into the matter.
CHAIR BISHOP said he heard that ASD would be submitting
testimony in response to her query.
1:41:11 PM
CHAIR BISHOP found no further comments or questions and
solicited a motion.
1:41:17 PM
SENATOR STEVENS moved to report CSSB 50, work order 31-LS0383\S,
from committee with individual recommendations and attached
fiscal note(s).
1:41:28 PM
CHAIR BISHOP found no objection and CSSB 50(L&C) was reported
from the Senate Labor and Commerce Standing Committee.
1:41:35 PM
At ease
SB 76-REPEAL WORKERS' COMP APPEALS COMMISSION
1:43:32 PM
CHAIR BISHOP reconvened the meeting and announced the
consideration of SENATE BILL NO. 76, "An Act repealing the
Workers' Compensation Appeals Commission; relating to decisions
and orders of the Workers' Compensation Appeals Commission;
relating to superior court jurisdiction over appeals from Alaska
Workers' Compensation Board decisions; repealing Rules 201.1,
401.1, and 501.1, Alaska Rules of Appellate Procedure, and
amending Rules 202(a), 204(a) - (c), 210(e), 601(b), 602(c) and
(h), and 603(a), Alaska Rules of Appellate Procedure; and
providing for an effective date."
He stated that this is the second hearing on SB 76 [and the
committee previously adopted a committee substitute (CS)]. He
invited Ms. Meade to give the Alaska Court System's perspective
of SB 76.
1:44:22 PM
NANCY MEADE, General Council, Administrative Staff, Alaska Court
System (ACS), Juneau, Alaska, stated that passage of SB 76 will
increase the case load for superior court judges, but the policy
decision of where cases are best handled is within the purview
of the legislature. Superior court will handle any cases that
are assigned, but additional cases will impact the ACS. She said
she anticipated 30-40 additional appeals per year, although it
is difficult to predict. Prior to 2005, the superior court
handled these cases, so the court system has experience in this
area. Although limited in number, these are some of the most
challenging and time-consuming cases and can take up to 12-18
months. The reason is because workers' compensation law is
unique, large, and somewhat arcane. The cases contain
significant documentation, including medical records. It would
seem each superior court judge would have just one or two extra
cases a year. However, since most of the cases occur in the
population centers, it is more likely that judges in Anchorage,
Juneau, and Fairbanks would handle most of the cases.
She said that workers' compensation appeals cases were taken
from the court in 2005 because decisions took so long and
because the decisions lacked consistency since the judges were
not subject matter experts in workers' compensation. She said
she cannot promise this would change if the policy decision is
to return these cases to the superior court. The ACS handles
other agency appeals and these would be handled the same way.
The change to superior court would not require any new rule
types or forms. She related that when this bill was brought
forward by a previous legislature, she worked with workers'
compensation on the language so the wording is this bill is
acceptable.
1:49:38 PM
SENATOR GRAY-JACKSON reiterated that prior to creation of the
WCAC, parties were not satisfied with the way cases were handed.
MS. MEADE agreed.
SENATOR GRAY-JACKSON asked whether there had been any
dissatisfaction with the commission.
MS. MEADE replied that was not her area of expertise.
SENATOR GRAY-JACKSON asked whether she could estimate the extra
cost to the ACS.
MS. MEADE explained that the Alaska Court System (ACS) submitted
a zero fiscal note because an increased workload does not
necessarily increase cost unless it is something new. Judges
receive the same salary regardless of the workload, even if they
work on weekends. A bill that anticipates 30 new cases a year
would not require a new judge and would use the current
infrastructure.
1:51:32 PM
SENATOR STEVENS asked if Workers' Compensation Appeals
Commission (WCAC) cases that are appealed would be referred to
the superior court, not the Alaska Supreme Court.
MS. MEADE replied the workers' compensation cases start with the
Workers' Compensation Board (WCB), then go to the WCAC, and then
the Alaska Supreme Court. If this bill passes, the cases will go
to the WCB then to superior court if appealed and finally to the
Alaska Supreme Court if the lower court decision is appealed.
1:53:10 PM
DEIRDRE FORD, Chair, Alaska Workers' Compensation Appeals
Commission (WCAC), Anchorage, Alaska, introduced herself. She
said that she was available for questions but could make a
statement if the Chair would like her to do so.
CHAIR BISHOP asked for the commission's opinion of SB 76.
MS. FORD began by saying she practiced as an employer defense
attorney before the Workers' Compensation Board for
approximately 20 years. She represented employers and insurers.
She subsequently served as a hearing officer for three and a
half years holding hearings before the WCB and then retired. She
was appointed chair in October 2016 and was recently reappointed
by Governor Dunleavy. She had experience with appeals before the
superior court, but she did not have experience with appeals to
the commission.
MS. FORD said she has three concerns with SB 76, which would
bring the cases before the superior court instead of the
Commission. First, WCAC decisions have precedential value, which
gives some finite parameters to employees and employers as to
how the board should handle disputes. As Ms. Meade said, there
were often inconsistencies with the superior court decisions.
Since these cases did not set precedence, the issue could be
argued again before the Workers' Compensation Board (WCB) and
the superior court.
When the Workers' Compensation Appeals Commission issues a
decision on a particular issue, the decision applies to the WCB
and other WCAC decisions, unless the Alaska Supreme Court
decides otherwise.
MS. FORD said the commission is required to issue a decision
within 90 days from the completion of briefing or oral argument,
whichever is later. She related her understanding that the
superior court judges have six months from that date to issue a
decision.
She highlighted her third concern, which is how self-represented
litigants would be handled. She commended the commission's
clerk, who does an outstanding job working with self-represented
litigants. She helps ensure their forms are completed, that
their briefing is done, and shows them how to file an appeal to
the commission. She said she has no way of knowing, but she did
not believe the superior court would provide the same hands-on
assistance that the WCAC or WCB provides.
1:58:12 PM
CHAIR BISHOP thanked Ms. Ford and opened public testimony on SB
76.
1:58:34 PM
ERIC CROFT, Attorney, representing self, Anchorage, Alaska,
offered to send the material he compiled this morning on the
decisions by the commission. He said he served in the
legislature at the time the WCAC was created and was an opponent
of the change. In the first seven years, the WCAC averaged 25
published decisions per year, but in the last seven years the
number has decreased to approximately 14 published decisions per
year. He acknowledged that Chair Ford does a good job but
maintained that there was not the burden of work to justify the
cost of the commission. He compared it to the Criminal Court of
Appeals, which is a three-member commission that handles about
220 cases per year.
CHAIR BISHOP asked Ms. Lager to discuss the designated general
fund list in the fiscal note.
2:02:29 PM
HANNA LAGER, Director, Administrative Services Division, Labor
and Workforce Development, Juneau, Alaska, stated that the
current FY 2021 governor's request is for $425,900 for the WCAC.
The change in FY 2021 would be half of that because of the
December 31, 2020 sunset date for the appeals commission. In FY
2022 and forward, the full amount would be removed from the
budget. That includes deleting two positions associated with
this component and the associated funding necessary to operate
the WCAC.
CHAIR BISHOP asked for the source of the funds.
MS. LAGER said the workers' safety compensation administration
account consists of receipts paid by employers into the fund,
based on a 2.9 percent premium. An additional 2.5 percent is
paid in on insurance premiums to the Department of Commerce,
Community and Economic Development (DCCED), Division of
Insurance, and is transferred to the fund every year.
CHAIR BISHOP recalled that two years ago the multiplier was
increased for the funds for the premiums.
MS. LAGER said that predates her time at the department, but she
believes that is correct. She said the department is closely
monitoring the fund sufficiency and anticipates some issues
arising in a few years.
2:05:11 PM
CHAIR BISHOP reiterated that the funding comes from premiums
paid in by the employers.
CHAIR BISHOP stated that he would leave public testimony on SB
76 open. He asked the sponsor and staff to come to the table.
2:05:56 PM
SENATOR WIELECHOWSKI, Alaska State Legislature, Juneau, Alaska,
introduced himself.
2:06:00 PM
DAVID DUNSMORE, Staff, Senator Bill Wielechowski, Alaska State
Legislature, Juneau, Alaska, introduced himself.
SENATOR STEVENS asked for the length of time to go through the
process and how this bill would save time in workers'
compensation cases that are appealed.
2:06:42 PM
SENATOR WIELECHOWSKI explained that if the WCB issues a decision
and one of the parties appeals the decision, the case would go
before the superior court. He then referenced the sheet in
members' packets, "Cases Before the Alaska Workers' Compensation
Appeals Commission, 2005-2018." He read the number of cases
filed: in 2012 - 29, in 2013 - 26, in 2014 - 30, 2015 - 31, in
2016 - 20, in 2017 - 26, and in 2018 - 26. The most public
decisions that were issued since 2010, because parties may
settle the cases, has been about 15. He reviewed the timeframe:
a party files and the appeals commission has 90 days, which Ms.
Ford stated. Testimony in 2005 was that the average time for
superior court cases was 7-18 months. The WCAC's report
indicates that the average time is 371 days for public decisions
to be issued, or approximately 12 months. The ACS testified that
the average length of time for agency appeals is 12-18 months,
which he did not dispute. He reiterated that his figures were
from 2005. He was unsure if statistical records were available
and surmised that this was likely based on an estimate.
2:09:48 PM
MR. DUNSMORE added that the 2005 data showed just 25 percent of
cases were appealed to the Alaska Supreme Court, but since its
inception, 50 percent of the WCAC's published decisions have
been appealed. In recent years, this figure has increased so a
majority of the WCAC's are appealed. This indicates more cases
would be resolved by the superior court because parties did not
appeal them to the Supreme Court.
CHAIR BISHOP remarked that that is the reason the committee is
discussing the bill.
2:11:12 PM
SENATOR WIELECHOWSKI agreed. He said the chart shows the number
of WCAC's published decisions that were appealed to the Supreme
Court. He related that in 2011, all 13 published opinions were
appealed, in 2012, 15 of 16 published decisions were appealed,
in 2013, 11 of 17 decisions were appealed, and in 2014, 12 of 15
published decisions were appealed. He concluded that a very high
percentage have been appealed to the Supreme Court. He said this
takes up the Supreme Court's resources since its five members
must prepare for these cases and it adds to the total length of
time it takes to resolve workers' compensation cases.
CHAIR BISHOP thanked the sponsor and stated that he would hold
SB 76 in committee for further consideration.
2:13:08 PM
There being no further business to come before the committee,
Chair Bishop adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:13 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 50 Work Draft ver. S.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 Sponsor Statement ver. S.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 Sectional Analysis ver. S.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB050 DRAFT Fiscal Note DOR-TAX 1-24-2020.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB050 DRAFT Fiscal Note DOLWD-UI 11-19-2019.pdf |
SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 - FY21 Major Maintenance Final List.pdf |
SFIN 2/28/2020 9:00:00 AM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 - FY21 School Construction Final List.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 - Nonresidents Working in Alaska 2017 Alaska Department of Labor and Workforce Development.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 News-Miner Editorial.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 50 News-Miner opinion.pdf |
SL&C 4/16/2019 1:30:00 PM SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB50 - Resolutions and Letters- Member Organizations- updated 1-29-2020.pdf |
SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB50-Public Comment- Updated 1-29-20.pdf |
SCRA 1/30/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 50 |
| SB 76 Work Draft Ver. M.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Explanation of changes Ver A to M.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Sponsor Statement ver. M.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Sectional Analysis Ver M.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB076 DRAFT Fiscal Note DOLWD-WC 01.28.2020.pdf |
SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB076 DRAFT Fiscal Note JUD-ACS 01-29-20.pdf |
SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents Legislative Finance Fund Source Report.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents Legislative Research Report 19-175.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents Fall 2019 Revenue Sources Book Pages.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents OMB Component Summary.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |
| SB 76 Supporting Documents 2015 DOL Subcommittee Narrative.pdf |
SL&C 1/28/2020 1:30:00 PM SL&C 1/30/2020 1:30:00 PM |
SB 76 |