Alaska Legislature: House Labor & Commerce, 5/4/26, 3:15pm

I call the House Labor and Commerce Committee to order. The time is 3:51 on May 4th. Members present: Representatives Freer, Fields, Hall, and Sadler. Um, thank you to Andrew Magnuson and Renzo Moises for tech and teleconferencing support. We have 2 bills on the agenda today.

First up is Senate Bill 21, Alaska Work and Save, and SB 252, Universal Uniform Commercial Code. First up is Senate Bill 21, um, by Senator Wilakowski and Maxine LaBerge. Miss LaBerge, you can come to the table. Do members have any questions for the bill sponsor? And Representative Carrick was here at 3:52.

Not seeing any, we can go straight into amendments. Representative Sadler, would you like to offer any of your amendments? Yes, Mr. Speaker, or Mr. Chair, I do. Give me a quick second here to transition to the floor here.

Thank you, Mr. Chair. I move amendment H.8. I'm not sure if it's been enumerated in this committee yet, but I move H.8. Okay.

Objection. Object. Um, go ahead, Representative Sadler. Thank you. Uh, Mr. Chairman, H.8 is a real simple one.

It's, um, You know, the bill underneath, the underlying bill, SB 21, would not only establish the Alaska Work and Save program, it also lets participants in the program deposit their Permanent Fund dividends into their Work and Save accounts. My amendment here simply gives Alaskans that same opportunity to deposit their Permanent Fund dividends into existing investment accounts instead of relying on the ones created under Work and Save. For historical perspective, this amendment was heard as standalone legislation in the 33rd Legislature as House Bill 245 and did at that point receive a zero fiscal note. It's something I believe in strongly, that people should have the ability to invest their income quickly, easily, so they can provide for their own needs later in life. So I encourage those who support thrift and prudence and investment to support Amendment Number 8.

Okay, um, thank you. And at 3:57, Representative Kolum joined us. Uh, Ms. LeBerge, does the bill sponsor support or oppose this amendment? Thank you. For the record, Maxine LeBerge, staff to Senator Wielechowski.

I really appreciate Representative Sadler's office working with us on this amendment, which does align with the underlying bill policy to help people save for retirement, and we do support the amendment. Representative Carrick. Thank you, Mr. Co-Chair. I, I'm also going to support this amendment. I did just want to note that this is a piece of legislation actively right now.

It's sitting in House State Affairs. We were not able to get to it this session just.

Mostly due to timing considerations. We're hearing other legislation from the maker of the amendment, so it's not something that I was intentionally trying to hold up or anything. I just didn't have time, and I, I do think it fits within the scope of this bill, so I would, I would like to support it as well. Okay, is the objection maintained? I remove my objection.

Thank you. Um, let's see. Which I believe that Representative Colon might have an amendment. Yeah, I move Amendment 9, or I should say H.9. Object.

This amendment just allows employers to opt in or opt out of the program. I support the bill, but one of the testifiers, they compared states that made it mandatory and states that didn't. The ones that didn't make it mandatory, they still got there where they needed to be, but I like the option of letting businesses opt in or opt out. And I think it would actually help competitiveness. Employees looking for this program might be more inclined to join a business that had it, and it would put a natural pressure on other businesses to offer the benefit as well.

Very good. Ms. LaBerge. For the record, Maxine LaBerge, staff to Senator Wielechowski. We had a really similar conversation in the Senate Finance Committee. We didn't have quite the same amendment, but very similar conversation, and it's a great idea.

Unfortunately, it would disqualify us from joining the multistate partnership, which is the component of this bill that makes it financially feasible for the state and savers. So unfortunately, we can't support that one.

Okay. Okay. Is the objection maintained? I maintain my objection. Will the Secretary call the roll?

Representative Sadler. Pass.

Representative Carrick.

No.

Representative Colombe. Yes.

Representative Nelson, not present. Representative Freer, not present. Co-chair Fields. No. Chair Hall?

No. Representative Sadler? Yes. 2 Yeas, 3 nays. So by a vote of 2 to 3, Amendment Number H.9 does not pass.

I believe Representative Kollom has the next amendment. Yeah, I move Amendment 10. I object. Go ahead, Representative Kollom. So same theme, um, instead of the employers, it would be allows employees to have the option to opt in or opt out of the program.

Right now it is just an opt-out option. Okay. Ms. LeBerge and Senator Wilkowski, does this amendment have the same issues as the last amendment and/or do you wish to share on this amendment more broadly? Thank you, Mr. Chairman. For the record, Bill Wilkowski from— Senator from East Anchorage.

I apologize for being late. I am in another committee right now. This creates problems.

Other states that have adopted an employee opt-in program have not been successful. And so we would oppose this. Ms. LaBerge can probably speak in a little more depth on that. Yeah, through the Chair, Maxine LaBerge, staff to Senator Wielechowski. We do have data that shows that savers are 20 times more likely to be saving when they are automatically opted into the program.

And in existing programs, 65 to 80% of savers are already staying in the program showing that people do want to be in these programs. I think another big issue with the opt-in aspect versus opt-out is that it's just difficult to get enrolled when you're working and it's hard to access these programs which also operate during working hours. But like Senator Wielechowski mentioned, New Mexico, Hawaii, and Massachusetts all have had kind of optional programs with pretty low rates of success where the seeing is as low as only 2.5% of eligible savers participating in the program. Yeah, so I guess this comes from, um, that because the cost of living is, uh, it's really tough right now and not everybody can give up some money to save right now. And this is— I guess I wanted people to be aware that they are giving up some of their paycheck And sometimes if it's not an opt-in, they're not really aware of that until it's already been deducted.

So that's why I put forward the amendment. Thank you, Representative Kahlom. Looks like the objection is maintained, so will the secretary call the roll.

Representative Kahlom? Yes. Representative Sadler? No.

Representative Freer? Not present. Representative Carrick? Will the secretary please recall on Representative Freer? Representative Freer.

Representative Carrick. No. Representative Nelson, not present. Co-chair Fields. No.

Co-chair Hall. No. 1 Yay, 5 nays. So by a vote of 1 to 5, H.10 amendment does not pass. Next up I think is Representative Klum.

Yeah, I move H.11. Object. So this amendment increases the size of the company that would be exempt from participating from 5 to 10 employees. I know that that had— I think that had increased on the Senate side, just trying to protect smaller businesses and not— I know that on the test when we were talking about it, that it sounded like the burden to small business wasn't too bad, but they do have to adjust their payroll and make room for payroll adjustments. And so I just— for smaller businesses, not everybody can handle that.

And so that's why I put it forward. Thanks, Representative Klim. Representative Sadler joined the committee at 4 PM. Senator Wilkowski. Thank you, Representative Nelson.

Sorry. Thank you, Mr. Chairman. For the record, Bill Wilkowski. A similar amendment was offered in the Senate, and, um, and we really worked on the Senate side to try to make this as light a touch as possible for the small business community. We did make the changes to increase the number to 5 in the Senate.

We did say you had to be in business for 3 years. And this would disqualify, based on numbers we got from Division of— Department of— well, I guess it's the Governor's Office. Oh, I'm sorry, Department of Labor. We believe this would disqualify 22,769 employees. It's a significant amount of employees would be disqualified.

And that's roughly 13.4% of the employers. And, and by the time you have 5 to— 5 or more employees and you've been in business for 3 years, you, you very likely have a payroll system in place. This is not a hard thing to do. And, and so we would respectfully not support this amendment. Thank you.

And Representative Kulum, I am going to also vote no just because I have many small employers in my district, downtown mainly tourists serving restaurants and similar small businesses who are in this category, and I do want to help them retain their employees. Further discussion? Yeah, could I get a clarification from the bill sponsor? Absolutely. So, so this isn't— maybe I misunderstood, because I thought any business could still opt in, that just the, the size of the business would not— it wouldn't make it mandatory, correct?

Correct. Through the chair, Maxine LaBerge. I think I get what you're saying. Any employer can be part of it. This exempts employers who have 5 or few employees, and so your amendment would exempt businesses with 10 or fewer employees.

But is it— but if I had somebody— if I had a business with 10 or less and I wanted to be in it, I could still be in it? Exempt means it's just not mandatory. They can still participate. Okay, so again, okay, is the objection maintained? It is.

Will the secretary call the roll? Representative Nelson? Yes. Representative Sloan? Yes.

Representative Freer? No. Representative Carrick? No. Representative Sadler?

Yes. CO-CHAIR FIELDS. No. CO-CHAIR HALL. No.

3 Ayes, 4 nays. So by a vote of 3 to 4, Amendment H.11 does not pass. I believe that concludes amendments. At this time, we are going to open public testimony. Is there anyone in the room who wishes to offer public testimony?

Seeing none, I'm going to go online. First up is Lou Theiss. Mr. Theiss, please proceed with your public testimony.

Uh, hello, Kit. Uh, this is, uh, Luthis in Girdwood, Alaska. I strongly support, uh, SB 21, Alaska's Working Faith. It's got a great fit for Alaska. I've been following this bill's development over the last few years.

The successful implementation in other states, combined with the financial support from the SECURE Act 2.0, make this an ideal time to adapt Alaska's Work and Save. Starting in 2027, the feds will do a 50% match of up to $1,000 into lower-income individual accounts in state-sponsored auto-enrollment IRA programs, and they will also provide.

Tax credits to employers to cover the implementation expenses. So if an individual making less than $35,000, if he can save $2,000, $1,000 of that will be— will come back to his account or her account as a refund check the next year and will be deposited directly into his account. My perspective has been shaped by almost 50 years living in Kirkwood. My 35-year-old son has worked in small retail businesses since he was 16 and has never had the opportunity to save for retirement in a tax-deferred fund. There are approximately 105,000 Alaskans in similar positions, seasonal workers in hospitality, retail, fishing, all, you know, all the kind of industries, um, the kind of people that get multiple W-2s every year, they move frequently for work.

The auto-enrollment feature of this bill is crucial because it ensures the portability of these individual IRA accounts wherever these workers seek employment. So anyway, I thank you for your time and for considering my support of this legislation. Thank you. Thank you, Mr. Theese. Next up in public testimony is John Weddleton.

Mr. Weddleton, thank you for being here, and please proceed.

[FOREIGN LANGUAGE] Hi, I'm John Weddleton, and I happen to be traveling, and I'm outside of Carson City right now. I've been traveling through two states, California and Nevada, where they have similar kind of programs. And so far, no one has complained about them. But I run a business in Anchorage that is 42 years old. And in that time, I've got 5 staff that have been with me over 30 years.

It used to be 6, but one just retired. I've got 10 that have been with me over— an additional 10 that have been with me over 10 years. And out of those, I think my 3 managers and maybe 1 or 2 others have saved anything for retirement. And it worries me because there's a lot of graying going on amongst my staff. So, you know, I learned about Work and Save.

It's a gift for businesses like mine. It makes it really simple to get into, creates a system for my staff to, you know, put away at least a little bit. And what I really like about it is it creates a reminder to them, this is important, you should be saving for retirement. And if every paycheck shows even a small contribution or just has a line item, you know, that that Work and Save program exists and that they can participate, I think they go a long way towards getting, you know, even newer and younger staff to putting away at least a little bit, you know, towards retirement. And ultimately, after they've worked You know, if they stay with me for 30 years, that'll add up to quite a bit.

So, you know, it's a good program, super easy for businesses to do. You know, we're already making deductions for taxes. You know, we do, you know, child support fairly frequent. And when we're onboarding them, you know, whether they, you know, I think Representative Calhoun's point I appreciate her kind of looking out, you know, is this easy for business? What can we do to help make this easier?

And the opt-in, opt-out, you know, you're going to, when you onboard them, that's a simple question right there. Do you want in or do you want out? It's not— that's not a burden at all. And then the trigger on number of employees, you know, I agree with the thought that, you know, 10 employees or, you know, 5 is, you know, it's— by the time you have 5, I think the point was made, you've got pretty much got a system going for your payroll. And this is so simple if you use QuickBooks to just add another, you know, deduction.

So it's a good program. Program is very simple, and I really look forward to it, um, offering it to my staff. So thanks so much for bringing this up and for all the work everyone's put into this. Thank you, Mr. Weddleton. I don't see anyone else online, so I'm going to close public testimony.

Um, are there further questions for the bill sponsor?

Seeing none, Representative Hall. Mr. Co-chair, I move to report SB 21, Work Order 34-LS0254/H, out of committee as amended with individual recommendations and accompanying fiscal notes.

Not seeing any objection, Senate Bill 21 does pass as amended with individual recommendations and accompanying fiscal notes. We'll take a brief at ease to transition to the next bill.

Back on the record. Second and last bill on the agenda, Senate Bill 252, Universe— Uniform Commercial Codes Electronic Records by Senator Clayman. Senator Clayman and Carly Dennis are here. Thank you. Do members have questions for the bill sponsor?

And Benjamin Oresky with the Uniform Law Commission is also online.

I don't see— oh, okay, Representative Sadler. I do. Just, um, we, uh, I think Representative Senator Clayman would remember Max Grunberg, who often brought us model legislation and who delighted in telling us all the jots and tittles of that. Um, just curious, um, how did you hear about the— this, uh, legislation and decide to carry it forward?

There's two parts. I, I actually, in the Max Grunberg world, I periodically check the status of different uniform laws that might be things we could consider, and I'm very familiar with the Uniform Commercial Code because it was kind of stage 1 in law school and has been part of commercial law practice in this state and actually the other 49 states for decades. And then in addition, I think a year or so ago, I got a call from a legislator from Washington State who specifically called our office and said, you know, Alaska hasn't adopted the 2018 or the 2022 amendments to the Uniform Commercial Code. And when he said that, I thought, I knew that and I hadn't thought about doing much about it just yet. And he said, well, you probably should do something about it.

And so we did.

And for those of us who are not legally inclined, I guess you could— the question is, what happens if we do not adopt these Uniform Commercial Code changes? I guess we kind of know what's happening right now even without us knowing it. But just what are the consequences for the state? Through the chair, Representative Sadler, the— Yeah, the consequences are to businesses in the state, not to the state itself, because these— the Uniform Commercial Code provisions are not provisions that the state enforces. It's not something— it affects state enterprises to the extent that we might be a state entity, or a part of the state might have a contract with a private company to provide certain things.

And, and so things that aren't in the contract between the state and that private company that the states buying things from, they'd look to the Uniform Commercial Code to fill in the gaps. But what these amendments, particularly the ones involving alternative means of payment, that is very much part of the business community today and not part of the government contracting community. We're not getting paid in cryptocurrency, for example, but if you have two businesses that agree to make payments in cryptocurrency, what these amendments to the Uniform Commercial Code do is they provide a structure for those businesses should they have a dispute for them to resolve that and not have a foundation, a basis upon which to look at those. The witnesses available from the Uniform Commercial Code or from the Uniform Law Commission could provide more detail, but the biggest pieces is that these are what make a level business landscape. I can just tell you in the last 5 years, I had a dispute between a company that I represented and a vendor, and there was a very specific Uniform Commercial Code that addressed that issue and how you deal with it.

And if you didn't have the Uniform Commercial Code, you'd be out in the middle of nowhere land in terms of how you deal with that commercial dispute. Thank you. Okay, um, at this time, I'm going to open public testimony. Does anyone in the room wish to testify? I don't see any.

No one online which offer public testimony. So I'm going to close public testimony. Um, Representative Hall. Mr. Co-chair, I move to report SB 252, work order 34-LS0294/n, out of committee with individual recommendations and accompanying fiscal notes. Not seeing any objection, Senate Bill 252 does pass out of committee with individual recommendations and accompanying fiscal notes.

That completes our business. Please sign the report. Labor and.

This is adjourned at 4:14.