SB 25-UNEMPLOYMENT; ELEC. FILING OF LABOR INFO  5:43:47 PM CHAIR DUNLEAVY announced the consideration of SB 25. "An Act relating to electronic filing of certain information with the Department of Labor and Workforce Development; relating to surcharges, rate increase reduction, prohibition on the relief of certain charges, the unemployment trust fund account, and the offset of certain unemployment compensation debt under the Alaska Employment Security Act; relating to the definition of 'covered unemployment compensation debt' in the Alaska Employment Security Act; and providing for an effective date." He noted that this was the second hearing. 5:44:29 PM BRYNN KEITH, Acting Deputy Commissioner, Department of Labor and Workforce Development (DOLWD) introduced herself. PAUL DICK, Director, Division of Employment Security, Department of Labor and Workforce Development (DOLWD) introduced himself. 5:45:03 PM SENATOR OLSON asked what provisions are being made with regard to electronic filing for those employers and employees in rural areas that don't have Internet access. MR. DICK explained that in rural areas, claimants for unemployment insurance and employers would have the option of paper or telephonic filing in addition to the Internet. SENATOR MICCICHE asked if the bill allowed the unemployment insurance tax rate to fluctuate .3 percent from year to year. MR. DICK described the two components to calculate the final tax rate. One measures the benefits versus wages over the past three years. The other is called the trust fund solvency adjustment and it has a limitation of .3 percent. The base tax and surcharge together equal the final tax rate. SENATOR MICCICHE asked if the increase/decrease percentage was a combination of the two. MR. DICK said yes. SENATOR MICCICHE asked Ms. Keith and Mr. Dick if they could alleviate the concerns about the future solvency of a fund that to date has been healthy and intact. 5:48:27 PM MS. KEITH explained that the bill provides the commissioner of labor limited discretion under very controlled circumstances to suspend part or all of the tax increase from year to year. She offered her belief that, given those limitations, the health of the Alaska Unemployment Insurance Trust Fund was not in jeopardy. She described this as a "tweak around the margins" to help the trust fund work a little better and circulate a bit more money through the economy. SENATOR MICCICHE inquired if it represents 100 percent of the benefits of covered unemployment compensation debt. MR. DICK restated that this legislation allows the commissioner to suspend the increase component in the tax rate under certain circumstances. SENATOR MICCICHE asked what "100 percent funding of the fund" represents. MR. DICK stated that SB 25 doesn't change the formula. It looks at solvency at the targeted rate of 3-3.3 percent of wages. SENATOR MICCICHE summarized that the 100 percent rate is 3 percent of the worst case benefits of those represented by the fund. MR. DICK clarified that the target rate is 3-3.3 percent. SENATOR MICCICHE asked if the fund has historically been funded at 3-3.3 percent. MR. DICK replied it has varied through the years. In some years there have been adjustment credits to the Trust Fund Solvency Adjustment and other years there are adjustment debits. This year the rate was 2.2 percent so there was a .8 trust fund solvency adjustment to get to the 3 percent target. SENATOR MICCICHE inquired if it was sometimes a struggle to maintain 3 percent. He asked, for example, if the fund was adequately maintained in the late 1980s. MR. DICK acknowledged that the trust fund decreased severely in the mid-1980s, but once the economy turned around the fund gradually recovered to its current level. 5:52:51 PM CATHIE ROEMMICH, CEO, Juneau Chamber of Commerce, read the following letter to Governor Parnell into the record: Thank you for all your efforts to keep our state strong by working for small business growth. It's not often these days that we find ways to lower the cost on anything so we applaud you for bringing forward the solvency of Alaska's Unemployment Trust Fund Account. The Juneau chamber of Commerce represents nearly 400 business members and their employees. It is our job to promote and support a positive business climate not only in Juneau but throughout the state. Our members support legislation that updates and clarifies laws as they relate to doing business in an effort to improve Alaska's business environment. Therefore we would like to add our support to SB 25. We are pleased that this legislation will insure that business owners as well as Alaskan workers are not paying more to state government in unemployment insurance taxes than necessary. The Juneau Chamber also understands the importance of compliance with the federal unemployment insurance laws. Maintaining the significant Federal Unemployment Tax Act credit that our employers currently receive is another critical piece of responsible taxation. The federal compliance components of SB 25 ensure that Alaska businesses will not be sending any more money to Washington DC than necessary for the unemployment insurance program. We are also supportive of the greater efficiencies that the Department of Labor will be able to provide by allowing electronic filing of unemployment claims. 5:54:59 PM CHAIR DUNLEAVY closed public testimony. Finding no questions or discussion, he asked for a motion. 5:55:09 PM SENATOR MICCICHE moved to report SB 25, labeled 28-GS1494\A, from committee with individual recommendations and attached fiscal note(s). CHAIR DUNLEAVY announced that without objection, SB 25 moved from the Senate Labor and Commerce Standing Committee.