HOUSE BILL NO. 58 An Act relating to the calculation and payment of unemployment compensation benefits; and providing for an effective date. REBECCA NANCE-GAMEZ, DEPUTY COMMISSIONER, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT, stated that Alaska's economy includes many seasonal industries with employees who rely on their unemployment benefits to fill the gaps between times of work. The current rate of unemployment insurance payments falls short in helping families cover living expenses. Alaska's unemployment insurance provides the lowest percentage of the State's average weekly wage of any state. Alaska's maximum weekly benefit amount of $248 ranks th To correct the inadequacy, HB 58 has been transmitted to increase unemployment insurance benefits and then index the benefits to the State's average weekly wage, so that future adjustments would be automatic and synchronized to the State's economy. Ms. Nance-Gamez commented that under the bill, the maximum weekly benefit amount would increase January 1, 2002, to $284. Those earning $31,250 or more per year would be eligible for the maximum benefit. A year later, the maximum weekly benefit amount would be indexed to the average weekly wage in the State for the preceding fiscal year, set at fifty percent of that wage. Based on current projections, the maximum weekly benefit amount in 2003 would be $320 for those claimants who earned $35,500 or more. She urged support for the legislation BILL CRAMER, ACTING ASSISTANT DIRECTOR, UNEMPLOYMENT INSURANCE DIVISION, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT, responded to questions by Co-Chair Williams and noted that the State of Alaska is last and that the percentage of the average weekly wage is 32%; the next lowest paying state is Illinois at a 38% replacement of the average weekly wage. The average weekly cost of a living wage increase was in 1996, moving from $212 to $248 dollars. Representative Foster asked the employee and employer percentage being paid. Ms. Nance-Gamez replied that in Alaska, employers pay 80%. New Jersey is the other state that has an employer's contribution. PAM LABOLLE, PRESIDENT, ALASKA STATE CHAMBER OF COMMERCE, JUNEAU, stated that the increase proposed would increase unemployment compensation by 29% above the present level. Alaska employers would pay the cost of the increase, which would be $10 million dollars. The Alaska State Chamber of Commerce believes that the increase would be exorbitant. She noted that the State Chamber does oppose the legislation. Representative Hudson asked the first year cost to the employer. Ms. LaBolle responded that if the increase were $10 million dollars, the first year increase would be $3.5 million dollars. DON ETHERIDGE, ALASKA STATE AFL-CIO, JUNEAU, voiced strong support for the legislation. He noted that the proposed legislation was the number one priority this year for the Union. KIM GARNERO, DIRECTOR, DIVISION OF FINANCE, DEPARTMENT OF ADMINISTRATION, addressed the fiscal note. She stated that the State of Alaska is a reimbursable employer for employment insurance purposes. The State pays tax contributions based on the employers experience rating and the employees contribute. The State reimburses the fund for actual payments made to former employees. Representative Foster MOVED to ADOPT Amendment #1. [Copy on File]. He asked Ms. LaBolle to speak to the amendment. Co- Chair Williams OBJECTED for purposes of discussion. Ms. LaBolle explained that the amendment would supports the position of the State Chamber of Commerce that an increase only occurs on the first level. A roll call vote was taken on the motion. IN FAVOR: Foster, Mulder OPPOSED: Bunde, Croft, Davies, Harris, Hudson, Lancaster, Whitaker Representative Moses was not present for the vote. The MOTION FAILED (2-8). Representative J. Davies MOVED to report CS HB 58 (L&C) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 58 (L&C) was reported out of Committee with a "do pass" recommendation and with fiscal note #1 by Department of Labor and Workforce Development, #2 by Department of Administration and #4 by the University of Alaska.