State of Alaska
Fiscal Note
Bill Version: CSSB 50(L&C)
2020 Legislative Session
Fiscal Note Number: 2
(S) Publish Date: 1/31/2020
Identifier: SB050-DOLWD-UI-11-19-19 Department: Department of Labor and Workforce Development
Title: EMPLOYMENT TAX FOR EDUCATION Appropriation: Employment and Training Services
FACILITIES Allocation: Unemployment Insurance
Sponsor: BISHOP OMB Component Number: 2276
Requester: (S) L&C
Expenditures/Revenues
Note: Amounts do not include inflation unless otherwise noted below. (Thousands of Dollars)
Included in
FY2021 Governor's
Appropriation FY2021 Out-Year Cost Estimates
Requested Request
OPERATING EXPENDITURES FY 2021 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
Personal Services
Travel
Services
Commodities
Capital Outlay
Grants & Benefits
Miscellaneous
Total Operating 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Fund Source (Operating Only)
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Positions
Full-time
Part-time
Temporary
Change in Revenues
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Estimated SUPPLEMENTAL (FY2020) cost: 0.0 (separate supplemental appropriation required)
Estimated CAPITAL (FY2021) cost: 0.0 (separate capital appropriation required)
Does the bill create or modify a new fund or account? No
(Supplemental/Capital/New Fund - discuss reasons and fund source(s) in analysis section)
ASSOCIATED REGULATIONS
Does the bill direct, or will the bill result in, regulation changes adopted by your agency? No
If yes, by what date are the regulations to be adopted, amended or repealed?
Why this fiscal note differs from previous version/comments:
Updated to current fiscal year form.
Prepared By: Patsy Westcott, Director Phone: (907)465-5927
Division: Employment and Training Services Date: 11/19/2019
Approved By: Hannah Lager, Administrative Services Director Date: 11/19/19
Agency: Office of Management and Budget
Printed 1/30/2020 Page 1 of 2 Control Code: kqHCj
 CSSB 50(L&C) - Fiscal Note 2
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. SB 50
2020 LEGISLATIVE SESSION
Analysis
This legislation imposes a $30 Educational Facilities Maintenance and Construction tax on wages and on net earnings from
selfemployment of every resident individual, nonresident, and partyear resident individual with income from a source in
the state. The tax shall be collected annually beginning January 1, 2020.
The legislation includes a clause to have the Department of Labor and Workforce Development (DOLWD) coordinate
collection and reporting of the tax if it will result in a cost savings for the state. Otherwise, the Department of Revenue
(DOR) shall coordinate collection and reporting of the tax.
This zero fiscal note assumes that DOR will collect all the taxes related to this legislation.
Provided below for reference are cost details for the scenario where DOLWD would collect the tax for employment
already subject to unemployment taxes and for selfemployed individuals.
The Unemployment Insurance Administrative Grant from the U.S. Department of Labor may only be used for the
administration of the state's Unemployment Insurance program. Therefore, any costs associated with this state tax must
be covered by the state. These costs include onetime information technology (IT) system changes estimated to total
$390,000 (see details below), and ongoing operating costs including ongoing IT system maintenance and three additional
permanent fulltime accounting technician II positions located in Juneau (see details below).
Onetime IT System Capital Costs in FY2020 would include:
Planning/Requirements Gathering/Design estimated to require 400 hours at a cost of $50,000;
Developer Costs estimated to require just under 1,500 hours at a cost of $200,000; and
Testing/Remediation/Production Implementation estimated to require 1,100 hours at a cost of $140,000 for a total of
nearly 3,000 hours and $390,000.
Ongoing operating costs would include:
Personal Services costs of $257,400 for three fulltime range 14 accounting technician II positions in Juneau;
Services costs in FY2020 of $105,900, which includes Department of Administration chargeback costs and DOLWD indirect
costs;
Services costs in FY2021 and beyond of $110,900, which includes Department of Administration chargeback costs, DOLWD
indirect costs, and ongoing tax collection IT system maintenance costs of $5,000;
Commodities costs of $5,400 to cover supply and equipment needs for the new positions for a total in FY2020 of
$368,700 and a total FY2021 and beyond of $373,700.
DOLWD projects that it would collect $12,144,400 in additional tax revenue based on the total number of covered
employees in Alaska between December 31, 2017 and September 30, 2018, which was 404,814 jobs multiplied by $30 per
job.
If DOLWD was to also collect the tax for selfemployment, additional information technology system changes are
estimated to costs $624,000 for a total capital expenditure of $1,014,000. The system to collect from selfemployed
individuals would have to be built from the bottom up. No additional maintenance costs are required. No additional staff
to collect the tax is required.
Onetime IT System Capital Costs in FY2020 to collect tax for selfemployed would include:
Planning/Requirements Gather/Design estimated to require 640 hours at a cost of $80,000;
Developer Costs estimated to required 2400 hours at a cost of $320,000; and
Testing/Remediation/Production Implementation estimated to require 1760 hours at a cost of $224,000 for a total cost
of 4800 hours and $624,000.
DOLWD does not collect data on selfemployed individuals. According to the 2017 U.S. Census Bureau's American
(Revised 10/22/19 OMB/LFD) Page 2 of 2
SB050-DOLWD-UI-11-19-19 Page 2 of 2 Control Code: kqHCj


Statutes affected:
SB0050A, AM SB 50, introduced 02/11/2019: 23.05.060, 43.45.021, 43.45.011, U.S.C, 43.45.031, 43.05.245, 43.45.041, 43.05.280, 23.20.165, 43.45.051, 43.45.061, 37.05.560, 43.45.099
SB0050B, AM CSSB 50(L&C), introduced 01/31/2020: 23.05.060, 43.45.021, 43.45.011, U.S.C, 43.45.031, 43.05.245, 43.45.041, 43.05.280, 23.20.165, 43.45.051, 43.45.061, 37.05.560, 43.45.099