SB 349 - UNEMPLOY EXEMPT AMATEUR SPORTS OFFICIAL CHAIRMAN LEMAN announced SB 349 to be up for consideration. MR. TIM BENINTENDI, Staff the Senator Tim Kelly, said "SB 349 would exempt Alaska amateur sport officials from the unemployment tax liabilities, but it does not relieve them of income tax liability. This legislation is predicated on successful passage of corresponding federal legislation which is now being worked on by Senator Stevens' office. The two have to go hand-in-hand. "Recreational nonprofessional sports are a large and expanding component of our State's athletic and social life and the role of amateur sports officials is vital to its continuation and development. The essential character of this avocation will be adversely impacted if tax pressures on modest stipends is not relieved. Most amateur sports officials provide their own transportation, uniforms, safety equipment, and other expenses without reimbursement from the nonprofits or the recreational units of local government that hires them. Without modest relief provided by SB 349, there may be a decline in the availability of qualified amateur sports officials as they pick up other work or worse, force increases in costs to the many nonprofits which sponsor amateur sporting events. This increase may lead to unavoidable program reductions. "The Alaska Legislature once did exempt amateur sports officials from employment tax liabilities, but the exemption was lifted a year later under the threat of losing federal funds at the Department of Labor. Federal law was not in sync with state law at the time. "SB 349 is supported by the Farthest North Umpire's Association, the Alaska School Activities Association, and the Anchorage Sports Association. It is not opposed by the AFL-CIO and carries a zero fiscal note." Number 215 MR. DWIGHT PERKINS, Special Assistant, Department of Labor, said the Department is neutral on this. They are bound by federal legislation until it is changed. He suggested a technical amendment to make sure they cover the state or any political subdivisions, like Parks and Recreation. On line 6 to insert "(22) services performed in the employee of a State, or any political subdivision thereof, or any organization exempt from income tax under section 501(a)..." which would make us consistent with federal legislation. SENATOR MACKIE moved to adopt the amendment. There were no objections and it was so ordered. MR. JOHN RENN, Anchorage Football Association, supported HB 349 and said the alternative is for associations to bear the cost and it would somehow go back to the youth. MS. PATRICIA LILLIAN, Amateur Softball Association Commissioner, supported SB 349 as it would have good long term effects to the cost of doing business. When they were exempted in 1989, it was to declare them as nonemployees. In 1994 the same situation existed when the Legislature exempted them from Workers' Compensation. This has been the intent of the legislature for a number of years and this is consistent with that position. She thought all the officials and user groups would support this without question. MR. JERRY WATSON, President, Farthest North Umpires' Association, said the legislation would have a dramatic affect on amateur sports in the State. He explained that this is not primary employment for most; it is done for love of the sport and for the comraderie. He said that recruiting is difficult and bills like this will only help that. MR. BRUCE KEMMERER, Alaska Amateur Softball Association Umpire Chief, said there are 300 softball officials in the State, but it's getting harder and harder each year to recruit officials for the sport. Passage of a bill like this would help alleviate that problem, because unemployment and workers' compensation problems turned people from officiating at all sports. Officials try to keep the cost of doing business down as much as possible. The game stipends they receive do not cover everything. There's a lot of volunteer work that is done preparing for a season, like going to clinics. Officials are independent contractors and are required to file income taxes, but they need this bill to keep the costs down. MR. GARY MATTHEWS, Executive Director, said he represents 195 member high schools and over 800 certified high school officials throughout the State. He said for most officials it's a labor of love and nearly everyone holds down an additional full-time job. He explained that in most of the small communities in the State the schools contact the officials directly, but in the larger communities, local associations of officials coordinate the scheduling of game assignments and help offer opportunities for training. If officials are determined to be covered by unemployment compensation, the cost to schools will be greatly increased. It is important from a statewide School Activities Association's perspective to pass this legislation. MR. LEFTY SCHALLOCK, Fairbanks Basketball Association, supported SB 349, otherwise it could increase costs by as much as 30 - 40 percent. In most instances there would be two choices, one for the officials organization to disband and the second would be to pass the increased costs on to the user groups which means our youth. MR. BOB WALKER, President, Anchorage Amateur Softball Umpire's Association, said he represented the largest softball umpire group in the State and supported this bill. MS. KIM KILLIAN, Vice President, Fairbanks Volleyball Officials Association, supported HB 349 and said this removes another added burden to keeping youth sports on-line. MR. ROBERT WALKOTTE, Fairbanks Football Officials Association, supported SB 349 because he was concerned that the costs were becoming prohibitive that the officials would probably get out. SENATOR KELLY moved to pass CSSB 349(L&C). There were no objections and it was so ordered.