SB 217 — An Act relating to employer contributions to the unemployment compensation fund; establishing an employer contribution for the state training and employment program; and providing for an effective date.

AS 23.20.135(b) is amended to read:

(b) The department, or a designee of the department, shall immediately deposit, upon receipt, all money payable to the fund in the clearing account.

Refunds of contributions erroneously collected and payable under AS 23.20.225 and 23.20.526(a)(11) may be paid from the clearing account in the same manner, or from the training and building fund.

Interest and penalty payments may not be refunded from the unemployment compensation fund.

After clearance, all money in the clearing account [, EXCEPT FOR THAT PORTION OF EMPLOYEE CONTRIBUTIONS UNDER AS 23.20.290(d) USED TO PAY INTEREST ON ADVANCES RECEIVED UNDER AS 23.20.140,] shall be immediately deposited with the United States Secretary of the Treasury to the credit of the account of this state in the unemployment trust fund established and maintained under 42 U.S.C.

1104 (sec.

904, Social Security Act), as amended.

* Sec.

8.

That percentage is 76 percent beginning January 1, 2009, [AND]and 73 percent SB0217B -3- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G beginning January 1, 2010,2010. and 100 percent beginning January 1, 2027.

Notwithstanding any other provision of this chapter, including the application of credits [HOWEVER], (1) the rate of contributions for an employer (1) may not exceed [BE LESS THAN ONE PERCENT OR MORE THAN] six and one-half percent;

(2) the rate of contributions for an employer may not be less than zero percent;

(3) the rate of contributions for an employer with less than four quarters of experience may not be less than one percent;

(4) the [.

THETHE] RATErate OFof CONTRIBUTIONScontributions FORfor ANan EMPLOYER]employer in rate class 21 may not be less than 5.4 percent;

and (5) the [.

THETHE] RATErate OFof CONTRIBUTIONScontributions FORfor ANan EMPLOYER]employer must be rounded to the nearest 1/100th of one percent.

COLUMN B COLUMN C COLUMN A Cumulative Experience Rate Class Ratable Payroll Factor at least but less than (percent) (percent) 1 5 .400.0 [.40] 2 5 10 .45 3 10 15 .50 4 15 20 .55 5 20 25 .60 6 25 30 .65 SB 217 -2- SB0217A New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\A 7 30 35 .70 8 35 40 .80 9 40 45 .90 10 45 50 1.00 11 50 55 1.00 12 55 60 1.10 13 60 65 1.20 14 65 70 1.30 CSSB 217(L&C) -4- SB0217B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G 15 70 75 1.35 16 75 80 1.40 17 80 85 1.45 18 85 90 1.50 19 90 95 1.55 20 95 99.99 1.60 21 99.99 1.65.

9.3.

ASThis 23.20.350(d)Act istakes amendedeffect toJanuary read:1, 2027.

(d)SB0217A An-3- individualSB who217 isNew eligibleText underUnderlined (a)[DELETED ofTEXT thisBRACKETED] section is entitled to receive the weekly benefit amount set out in column (B) of the table in this subsection that is opposite the amount set out in column (A) of the individual's base period wages determined under (c) of this section:

(A) (B) Base Period Wages Weekly Benefit Amount At least But less than 0 2,500 $ 0 2,500 2,750 56 2,750 3,000 58 3,000 3,250 60 3,250 3,500 62 3,500 3,750 64 3,750 4,000 66 4,000 4,250 68 4,250 4,500 70 4,500 4,750 72 4,750 5,000 74 5,000 5,250 76 5,250 5,500 78 5,500 5,750 80 5,750 6,000 82 SB0217B -5- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G 6,000 6,250 84 6,250 6,500 86 6,500 6,750 88 6,750 7,000 90 7,000 7,250 92 7,250 7,500 94 7,500 7,750 96 7,750 8,000 98 8,000 8,250 100 8,250 8,500 102 8,500 8,750 104 8,750 9,000 106 9,000 9,250 108 9,250 9,500 110 9,500 9,750 112 9,750 10,000 114 10,000 10,250 116 10,250 10,500 118 10,500 10,750 120 10,750 11,000 122 11,000 11,250 124 11,250 11,500 126 11,500 11,750 128 11,750 12,000 130 12,000 12,250 132 12,250 12,500 134 12,500 12,750 136 12,750 13,000 138 13,000 13,250 140 13,250 13,500 142 13,500 13,750 144 CSSB 217(L&C) -6- SB0217B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G 13,750 14,000 146 14,000 14,250 148 14,250 14,500 150 14,500 14,750 152 14,750 15,000 154 15,000 15,250 156 15,250 15,500 158 15,500 15,750 160 15,750 16,000 162 16,000 16,250 164 16,250 16,500 166 16,500 16,750 168 16,750 17,000 170 17,000 17,250 172 17,250 17,500 174 17,500 17,750 176 17,750 18,000 178 18,000 18,250 180 18,250 18,500 182 18,500 18,750 184 18,750 19,000 186 19,000 19,250 188 19,250 19,500 190 19,500 19,750 192 19,750 20,000 194 20,000 20,250 196 20,250 20,500 198 20,500 20,750 200 20,750 21,000 202 21,000 21,250 204 21,250 21,500 207 [206] SB0217B -7- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G 21,500 21,750 209 [208] 21,750 22,000 212 [210] 22,000 22,250 214 [212] 22,250 22,500 216 [214] 22,500 22,750 219 [216] 22,750 23,000 221 [218] 23,000 23,250 224 [220] 23,250 23,500 226 [222] 23,500 23,750 228 [224] 23,750 24,000 231 [226] 24,000 24,250 233 [228] 24,250 24,500 236 [230] 24,500 24,750 238 [232] 24,750 25,000 240 [234] 25,000 25,250 243 [236] 25,250 25,500 245 [238] 25,500 25,750 248 [240] 25,750 26,000 250 [242] 26,000 26,250 252 [244] 26,250 26,500 255 [246] 26,500 26,750 257 [248] 26,750 27,000 260 [250] 27,000 27,250 262 [252] 27,250 27,500 264 [254] 27,500 27,750 267 [256] 27,750 28,000 269 [258] 28,000 28,250 272 [260] 28,250 28,500 274 [262] 28,500 28,750 276 [264] 28,750 29,000 279 [266] 29,000 29,250 281 [268] CSSB 217(L&C) -8- SB0217B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G 29,250 29,500 284 [270] 29,500 29,750 286 [272] 29,750 30,000 288 [274] 30,000 30,250 291 [276] 30,250 30,500 293 [278] 30,500 30,750 296 [280] 30,750 31,000 298 [282] 31,000 31,250 300 [284] 31,250 31,500 303 [286] 31,500 31,750 305 [288] 31,750 32,000 308 [290] 32,000 32,250 310 [292] 32,250 32,500 313 [294] 32,500 32,750 315 [296] 32,750 33,000 317 [298] 33,000 33,250 320 [300] 33,250 33,500 322 [302] 33,500 33,750 325 [304] 33,750 34,000 327 [306] 34,000 34,250 329 [308] 34,250 34,500 332 [310] 34,500 34,750 334 [312] 34,750 35,000 337 [314] 35,000 35,250 339 [316] 35,250 35,500 341 [318] 35,500 35,750 344 [320] 35,750 36,000 346 [322] 36,000 36,250 349 [324] 36,250 36,500 351 [326] 36,500 36,750 353 [328] 36,750 37,000 356 [330] SB0217B -9- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G 37,000 37,250 358 [332] 37,250 37,500 361 [334] 37,500 37,750 363 [336] 37,750 38,000 365 [338] 38,000 38,250 368 [340] 38,250 38,500 370 [342] 38,500 38,750 373 [344] 38,750 39,000 375 [346] 39,000 39,250 377 [348] 39,250 39,500 380 [350] 39,500 39,750 382 [352] 39,750 40,000 385 [354] 40,000 40,250 387 [356] 40,250 40,500 389 [358] 40,500 40,750 392 [360] 40,750 41,000 394 [362] 41,000 41,250 397 [364] 41,250 41,500 399 [366] 41,500 41,750 401 [368] 41,750 42,000 404 [370] 42,000 42,250 406 42,250 42,500 409 42,500 42,750 411 42,750 43,000 413 43,000 43,250 416 43,250 43,500 418 43,500 43,750 421 43,750 44,000 423 44,000 44,250 425 44,250 44,500 428 44,500 44,750 430 CSSB 217(L&C) -10- SB0217B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G 44,750 45,000 433 45,000 45,250 435 45,250 45,500 438 45,500 45,750 440 45,750 46,000 442 46,000 46,250 445 46,250 46,500 447 46,500 46,750 450 46,750 47,000 452 47,000 47,250 454 47,250 47,500 457 47,500 47,750 459 47,750 48,000 462 48,000 48,250 464 48,250 48,500 466 48,500 48,750 469 48,750 49,000 470 49,000 470 [370].

* Sec.

10.

AS 23.20.350 is amended by adding a new subsection to read:

(h) On January 1 of each year, the department shall increase the maximum base period wages in (d) of this section by a percentage equal to the percentage increase in the base of contributions calculated under AS 23.20.175 in comparison to the base contributions calculated for the prior year.

The new base period wage amount shall be rounded to the nearest $250.

The department shall increase the corresponding weekly benefit amount in (d) of this section by $2 for each $250 increase in base period wages.

The department may not decrease the base period wage amount of the weekly benefit amount.

* Sec.

11.

AS 23.20.526(a) is amended to read:

(a) In this chapter, unless the context otherwise requires, "employment" does not include (1) domestic service in a private home, except as provided in SB0217B -11- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G AS 23.20.525(a)(13);

(2) newsboys' services in selling or distributing newspapers on the street or from house to house;

(3) service not in the course of the employing unit's trade or business performed in a calendar quarter by an individual, unless the cash remuneration paid for the service is $50 or more and the service is performed by an individual who is regularly employed by the employing unit to perform the service;

an individual is here considered to be regularly employed to perform service not in the course of an employing unit's trade or business during a calendar quarter only if the individual performs the service for some portion of the day on each of 24 days during the quarter or during the preceding calendar quarter;

(4) service performed by an individual in the employ of the individual's (A) son, daughter, or spouse;

(B) parent or legal guardian if the individual was under the age of 21 years and a full-time student during eight of the last 12 months and intends to resume full-time student status within the next four months;

and (C) mother or father if the service is performed by a child under the age of 18;

(5) service with respect to which unemployment insurance is payable under an unemployment insurance program established by an Act of Congress;

(6) service performed in the employ of a foreign government including service as a consular or other officer or employee or a nondiplomatic representative;

(7) service performed in the employ of an instrumentality wholly owned by a foreign government if (A) the service is of a character similar to that performed in foreign countries by employees of the United States government or its instrumentalities;

and (B) the department finds that the United States Secretary of State has certified to the United States Secretary of the Treasury that the foreign government, with respect to whose instrumentality exemption is CSSB 217(L&C) -12- SB0217B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G claimed, grants an equivalent exemption with respect to similar service performed in the foreign country by employees of the United States government and its instrumentalities;

(8) service performed by an insurance agent, insurance solicitor, real estate broker, real estate salesperson, or securities salesperson to the extent the person is compensated by commission, unless the service is required to be covered under the Federal Unemployment Tax Act, as amended;

(9) notwithstanding AS 23.20.525(a)(9), service performed by an officer or member of the crew of an American vessel on or in connection with the vessel, if the operating office, from which the operations of the vessel operating on navigable waters inside or inside and outside the United States are ordinarily and regularly supervised, managed, directed, and controlled, is outside this state;

(10) service performed on or in connection with a vessel not an American vessel by an individual if the individual performed service on and in connection with the vessel when outside the United States;

(11) service performed in the employ of the United States government or an instrumentality of the United States exempt under the Constitution of the United States from the contributions imposed by this chapter, except that to the extent that the Congress of the United States permits states to require an instrumentality of the United States to make payments into an unemployment fund under a state employment security law, all of the provisions of this chapter apply to the instrumentalities, and to service performed for the instrumentalities in the same manner, to the same extent, and on the same terms as to all other employers, employing units, individuals, and service;

however, if this state is not certified for any year by the United States Secretary of Labor under 26 U.S.C.

3304(c) (Federal Unemployment Tax Act, Internal Revenue Code), the payments required of the instrumentalities with respect to the year shall be refunded by the department from the fund in the same manner and within the same period as is provided in AS 23.20.225 with respect to contributions erroneously collected;

(12) service performed in the employ of another state, or political subdivision of another state, or an instrumentality of another state or political SB0217B -13- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G subdivision that is wholly owned by another state or its political subdivision, or a service performed in the employ of an instrumentality of another state or its political subdivisions to the extent that the instrumentality is, with respect to the service, exempt under the Constitution of the United States from the tax imposed by 26 U.S.C.

3301 (Federal Unemployment Tax Act, Internal Revenue Code);

(13) service performed in the employ of an international organization;

(14) service covered by an election approved by the agency charged with the administration of any other state or federal employment security law, in accordance with an arrangement under AS 23.20.090(a) during the effective period of the election;

(15) service performed by an individual in agricultural labor, except as provided in AS 23.20.525(a)(14);

the term "agricultural labor" means remunerated service (A) on a farm, in the employ of any person in connection with cultivating the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and fur-bearing animals and wildlife;

(B) in the employ of the owner or tenant or other operator of a farm, in connection with the operation, management, conservation, improvement, or maintenance of the farm and its tools and equipment, or in salvaging timber or clearing land of brush and other debris left by a hurricane, if the major part of the service is performed on a farm;

(C) in connection with the production or harvesting of any commodity defined as an agricultural commodity in 12 U.S.C.

1141j (Sec.

15(g), Agricultural Marketing Act), as amended, or in connection with the operation or maintenance of ditches, canals, reservoirs, or waterways, not owned or operated for profit, used exclusively for supplying and storing water for farming purposes;

(D) in the employ of the operator of a farm in handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or CSSB 217(L&C) -14- SB0217B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G delivering to storage or to market or to a carrier for transportation to market, in its unmanufactured state, any agricultural or horticultural commodity;

but only if the operator produced more than one-half of the commodity with respect to which the service is performed except as stated in (b) of this section;

(E) in the employ of a group of operators of farms, or a cooperative organization of which the operators are members, in the performance of service described in (D) of this paragraph, but only if the operators produced more than one-half of the commodity with respect to which the service is performed;

(F) on a farm operated for profit if the service is not in the course of the employer's trade or business;

(16) service performed as a student nurse in the employ of a hospital or a nurses' training school by an individual who is enrolled and is regularly attending classes in a nurses' training school chartered or approved in accordance with the laws of this state, and service performed as an intern in the employ of a hospital by an individual who has completed a four-year course in a medical school chartered or approved in accordance with the laws of this state, unless the service is required to be covered under the Federal Unemployment Tax Act;

(17) service performed by an individual on a boat engaged in catching fish or other forms of aquatic animal life under an arrangement with the owner or operator of that boat under which (A) that individual does not receive any cash remuneration except as provided in (B) of this paragraph;

(B) that individual receives a share of the boat's, or the boats' in the case of a fishing operation involving more than one boat, catch of fish or other forms of aquatic animal life or a share of the proceeds from the sale of that catch;

and (C) the amount of that individual's share depends on the amount of the boat's, or the boats' in the case of a fishing operation involving more than one boat, catch of fish or other forms of aquatic animal life;

but only if the operating crew of that boat, or each boat from which the individual SB0217B -15- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G receives a share in the case of a fishing operation involving more than one boat, is normally made up of fewer than 10 individuals;

(18) service performed as a prospective or impaneled juror in a court;

(19) service performed for a corporation by an employee of the corporation if (A) the corporation is incorporated under AS 10.06;

(B) the corporation is not a government corporation;

and (C) the employee is an executive officer of the corporation;

(20) service performed by an individual who drives a taxicab whose compensation and written contractual arrangements are as described in AS 23.10.055(a)(13);

(21) service of an individual who (A) directly sells or solicits the sale of consumer products, for resale or otherwise, personally to a prospective consumer in the home or otherwise than in a permanent retail establishment;

a sale or solicitation by telephone, mail, other telecommunications method, or other nonpersonal method does not satisfy the requirement of this subparagraph;

(B) is compensated solely by (i) commissions on sales or other remuneration directly related to sales or sales performance;

or (ii) a profit represented by the difference between the wholesale cost of the product to the seller and the final sale price to the consumer;

and (C) performs under a written contract with the person for whom the service is performed that provides, notwithstanding AS 23.20.395(a), that the individual is not an employee for purposes of this chapter or for federal or state tax purposes;

(22) temporary services related to emergency oil spill training and response activities by an individual described in (17) of this subsection;

in this paragraph, "temporary" means a period of less than seven continuous days;

and (23) service [VOLUNTEER WORK] performed by an independent CSSB 217(L&C) -16- SB0217B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G contractor [A PERSON ENGAGED ON A CONTRACT BASIS] as a sports official at a sports event for which the competitors are not paid a wage or salary;

however, the exemption provided under this paragraph does not apply to a claim for benefits under this chapter that is related to a sports event or competition sponsored by an employer for whom the person making the claim normally performs work, including work as a teacher, coach, or administrator, that is not sports official work;

in this paragraph, (A) "sports official" is a participant in a sports event or competition whose participation is neutral with respect to who wins or loses, including an umpire, referee, judge, scorekeeper, timekeeper, or organizer;

(B) "independent contractor" means a sports official (i) working under a written contract between the sports official and the party or association engaging the sports official's services that specifically states the sports official is an independent contractor;

(ii) who is paid based on a set fee for each game officiated;

(iii) who is free under the terms of the contract to accept or reject assignments of any game;

(iv) who is not limited to exclusively officiating with the party engaging the services of the sports official ["VOLUNTEER WORK" MEANS WORK FOR WHICH COMPENSATION DOES NOT EXCEED $1,500 A YEAR AND IS PAID ONLY TO DEFRAY OR REIMBURSE THE REASONABLE FOOD, TRAVEL, AND INCIDENTAL EXPENSES THE PERSON INCURS IN ORDER TO PERFORM THE WORK OR AS A RESULT OF PERFORMING THE WORK].

* Sec.

12.

AS 23.30.240 is amended to read:

Sec.

23.30.240.

Officers of corporations, municipal corporations, and nonprofit corporations, and members of limited liability companies as employees.

(a) Except as provided in (b) of this section, an executive officer elected or appointed and empowered in accordance with the charter and bylaws of a corporation;

a SB0217B -17- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G member, director, or principal officer of a cooperative organized under AS 10.15;

or a member of a limited liability company organized under AS 10.50 is not an employee of the business entity under this chapter if the executive officer, principal officer, director, or member owns at least 10 percent of the business entity.

Except as provided in (b) of this section, an executive officer of a municipal corporation or charitable, religious, educational, or other nonprofit corporation is not an employee of the corporation under this chapter.

(b) Any type of corporation, cooperative, or limited liability company may bring an executive officer, principal officer, director, or a member exempted under (a) of this section within the coverage of the business entity's insurance contract by specifically including the executive officer or member in the contract of insurance.

The election to bring the executive officer, principal officer, director, or member within the business entity's coverage continues in force for the period during which the contract of insurance is in effect.

During that period, an executive officer, principal officer, director, or a member brought within the coverage of the insurance contract is an employee of the business entity under this chapter.

* Sec.

13.

AS 23.15.630(b), 23.15.835(b);

and AS 23.20.290(d) are repealed.

* Sec.

14.

The uncodified law of the State of Alaska is amended by adding a new section to read:

APPLICABILITY.

AS 23.15.630(a), as amended by sec.

2 of this Act, applies to contracts entered into on or after the effective date of sec.

2 of this Act.

* Sec.

15.

The uncodified law of the State of Alaska is amended by adding a new section to read:

TRANSITION:

BACKGROUND CHECKS.

Notwithstanding AS 12.62.400(a)(26), added by sec.

1 of this Act, and AS 23.15.845, added by sec.

6 of this Act, a person who, on the day before the effective date of secs.

1 and 6 of this Act, is serving as an instructor at the Alaska Vocational Technical Center may continue to serve as an instructor without obtaining the criminal background check required under AS 23.15.845, added by sec.

6 of this Act, until July 1, 2027.

* Sec.

16.

The uncodified law of the State of Alaska is amended by adding a new section to read:

CSSB 217(L&C) -18- SB0217B New Text Underlined [DELETED TEXT BRACKETED] 34-GS2585\G STATE UNEMPLOYMENT INSURANCE LAW FEDERAL APPROVAL.

To the extent necessary to implement this Act, the Department of Labor and Workforce Development shall submit for federal approval the changes to the unemployment insurance laws of the state enacted by secs.

3 - 5, 7 - 11, and 13 of this Act.

* Sec.

17.

The uncodified law of the State of Alaska is amended by adding a new section to read:

CONDITIONAL EFFECT;

NOTIFICATION.

(a) Sections 3 - 5, 7 - 11, and 13 of this Act take effect only if, on or before July 1, 2027, the United States Secretary of Labor approves the change to the unemployment insurance laws of this state under 26 U.S.C.

3304 (Federal Unemployment Tax Act).

(b) The commissioner of labor and workforce development shall notify the revisor of statutes in writing within 30 days after the United States Secretary of Labor approves or denies the change to the unemployment insurance laws of this state.

* Sec.

18.

If secs.

3 - 5, 7 - 11, and 13 of this Act take effect, they take effect on January 1, 2027, or the day after the United States Secretary of Labor approves the change to the unemployment insurance laws of this state, whichever is later.

* Sec.

19.

Section 16 of this Act takes effect immediately under AS 01.10.070(c).

* Sec.

20.

Except as provided in secs.

18 and 19 of this Act, this Act takes effect January 1, 2027.

SB0217B -19- CSSB 217(L&C) New Text Underlined [DELETED TEXT BRACKETED]