Bill Summary – FastDemocracy

State of Alaska
                                                         Fiscal Note
                                                                                          Bill Version:                      CSHB 79(FIN)
 2018 Legislative Session
                                                                                          Fiscal Note Number:                8
                                                                                          (H) Publish Date:                  2/21/2018
 Identifier:        HB079CS(FIN)-DOLWD-WC-02-16-18                          Department:       Department of Labor and Workforce Development
 Title:             OMNIBUS WORKERS' COMPENSATION                           Appropriation: Workers' Compensation
 Sponsor:           RLS BY REQUEST OF THE GOVERNOR                          Allocation:       Workers' Compensation
 Requester: (H) Finance                                                     OMB Component Number:              344
 Expenditures/Revenues
 Note: Amounts do not include inflation unless otherwise noted below.                                                              (Thousands of Dollars)
                                                 Included in
                                    FY2019       Governor's
                                Appropriation      FY2019                                        Out-Year Cost Estimates
                                  Requested       Request
 OPERATING EXPENDITURES               FY 2019        FY 2019       FY 2020                  FY 2021           FY 2022              FY 2023       FY 2024
 Personal Services                                                    (59.8)                  (59.8)            (59.8)               (59.8)        (59.8)
 Travel
 Services
 Commodities
 Capital Outlay
 Grants & Benefits
 Miscellaneous
 Total Operating                            0.0           0.0         (59.8)                   (59.8)            (59.8)              (59.8)            (59.8)
 Fund Source (Operating Only)
 1157 Wrkrs Safe (DGF)                                                       (59.8)            (59.8)            (59.8)              (59.8)            (59.8)
 Total                                          0.0            0.0           (59.8)            (59.8)            (59.8)              (59.8)            (59.8)
 Positions
 Full-time                                                                    (1.0)             (1.0)                (1.0)            (1.0)             (1.0)
 Part-time
 Temporary
 Change in Revenues
 1004 Gen Fund (UGF)                      (1,805.8)                       (1,805.8)        (1,805.8)          (1,805.8)           (1,805.8)      (1,805.8)
 1157 Wrkrs Safe (DGF)                      1,805.8                         1,805.8          1,805.8            1,805.8             1,805.8        1,805.8
 Total                                          0.0            0.0              0.0              0.0                0.0                 0.0            0.0
 Estimated SUPPLEMENTAL (FY2018) cost:            0.0                 (separate supplemental appropriation required)
 (discuss reasons and fund source(s) in analysis section)
 Estimated CAPITAL (FY2019) cost:                 0.0                 (separate capital appropriation required)
 (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?             Yes
 If yes, by what date are the regulations to be adopted, amended or repealed?                             12/31/19
 Why this fiscal note differs from previous version/comments:
 This is an updated version to clarify the change in revenues in the analysis section and attach related tables.
 Prepared By:             Marie Marx, Director                                                                  Phone:           (907)465-6060
 Division:                Workers' Compensation                                                                 Date:            02/16/2018 01:00 PM
 Approved By:             Greg Cashen, Acting Commissioner                                                      Date:
                                                                                                                        OUT OF   02/16/18
 Agency:                  Department of Labor and Workforce Development                                       REPORTED
Printed 2/21/2018                                                    Page 1 of 4                               HFC 02/20/2 018
                                                                                                                        Control Code: gChwh
                                                                                                         CSHB 79(FIN) - Fiscal Note 8
                                                 FISCAL NOTE ANALYSIS
STATE OF ALASKA                                                                 BILL NO. CSHB 79
2018 LEGISLATIVE SESSION
Analysis
   This legislation makes a number of changes to the Workers' Compensation Act. One of these changes allows the division
   to mandate electronic filing of documents. Once all employers have converted to electronic filing, which is anticipated to
   occur by FY2020, the department will be able to eliminate one position that currently supports paper filings.
   Additionally, this legislation would increase the percent of fees deposited into the Workers' Safety and Compensation
   Administrative Account (WSCAA). Under AS 21.09.210, the Division of Insurance collects a 2.7 percent tax from insurers on
   their annual Workers' Compensation premiums. Per AS 23.05.067, 1.82 percent is deposited into WSCAA and the
   remaining 0.88 percent is currently deposited into the Alaska comprehensive health insurance (ACHI) fund. Based on 2017
   Workers' Compensation premiums totaling $265,563,529, this equates to $4,833,256 to WSCAA and $2,336,959 to ACHI.
   In FY2019, the 0.88 percent will revert to the general fund.
   This legislation would increase the amount deposited into WSCAA to 2.5 percent and decrease the amount deposited into
   the general fund to 0.20 percent. Again, based on 2017 premiums, this equates to $6,639,088 to WSCAA and $531,127 to
   the general fund; this represents a change of $1,805,832 annually. This additional revenue is needed in WSCAA to cover
   the budgeted expenditures against the account and avoid a shortfall. The following two tables show the discrepancy
   between WSCAA budgeted expenditures and annual revenue leading to an account shortfall by FY2020. They also show
   that both HB 69 and HB 79 are required to bring WSCAA budgeted expenditures and annual revenue into alignment.
(Revised 9/26/17 OMB/LFD)                                                                                         Page 2 of 2
HB079CS(FIN)-DOLWD-WC-02-16-18                                 Page 2 of 4                                             Control Code: gChwh
                                                                                                                                                                           CSHB 79(FIN) - Fiscal Note 8
Department of Labor and Workforce Development
Workers' Safety and Compensation Administration Account (WSCAA)
Fund Balance FY09 to FY23
Updated February 16, 2018
IRIS fund: 1157
                                         FY09        FY10       FY11        FY12        FY13      FY14        FY15       FY16       FY17        FY18       FY19        FY20       FY21        FY22        FY23
                                        Actuals    Actuals     Actuals    Actuals      Actuals   Actuals    Actuals     Actuals    Actuals       MP         Gov
Available Balance                      18,733.5 18,394.6 16,421.1 14,028.3 13,345.6 13,412.1 13,735.1 13,678.0 12,706.4 12,279.5 10,128.8                             7,984.5    6,973.6     6,973.6      6,973.6
Carryforward                           11,752.2 11,352.4 10,286.4 7,174.3 5,505.9 5,705.3 6,397.7 6,474.6 5,732.8 5,305.9 3,155.2                                     1,010.9        0.0         0.0          0.0
Revenue                                 6,981.3 7,042.2 6,134.7 6,854.0 7,839.7 7,706.8 7,337.4 7,203.4 6,973.6 6,973.6 6,973.6                                       6,973.6    6,973.6     6,973.6      6,973.6
Operating Appropriations                7,381.1     8,082.9    8,534.6     7,948.0     6,371.8   6,860.3     6,952.9    7,930.0     7,367.4    9,124.3    9,117.9     9,117.9    9,117.9     9,117.9      9,117.9
Labor Market Information                  109.8       112.0      110.8       126.1       112.5     112.3       110.9      108.1        87.1      127.3      121.5       121.5      121.5       121.5        121.5
Workers' Compensation (WC)              4,580.3     4,836.3    4,982.3     5,218.3     5,229.4   5,602.7     5,563.5    5,522.9     5,360.4    5,653.0    5,671.0     5,671.0    5,671.0     5,671.0      5,671.0
WC Appeals Commission                     479.6       530.0      484.2       401.1       452.9     402.0       332.6      377.4       251.1      443.3      421.6       421.6      421.6       421.6        421.6
Occupational Safety and Health          2,211.4     2,604.6    2,957.3     2,202.5       577.0     743.3       945.9    1,921.6     1,668.8    2,900.7    2,903.8     2,903.8    2,903.8     2,903.8      2,903.8
Capital Appropriations                       0.0       25.3      712.2       574.4     1,268.5     154.1       307.6        15.2       33.1         0.0        0.0         0.0        0.0         0.0             0.0
WC System Rewrite                            0.0       25.3      712.2       574.4     1,268.5     154.1       307.6        15.2       33.1         0.0        0.0         0.0        0.0         0.0             0.0
Total Appropriations                    7,381.1     8,108.2    9,246.8     8,522.4     7,640.3   7,014.4     7,260.5    7,945.2     7,400.5    9,124.3    9,117.9     9,117.9    9,117.9     9,117.9      9,117.9
Balance to carry forward               11,352.4 10,286.4       7,174.3     5,505.9     5,705.3   6,397.7     6,474.6    5,732.8     5,305.9    3,155.2    1,010.9     (1,133.4) (2,144.3) (2,144.3) (2,144.3)
                                                                                                                                                                     Overspent Overspent Overspent Overspent
Revenue less Appropriations               (399.8) (1,066.0) (3,112.1) (1,668.4)          199.4     692.4        76.9     (741.8)     (426.9) (2,150.7) (2,144.3) (2,144.3) (2,144.3) (2,144.3)           (2,144.3)
(negative indicates unsustainable
spending)
Notes:
Insurer Revenue: The Division of Insurance collects a 2.7% tax from insurers on their annual Workers Compensation premiums. Of this, 1.82% is deposited into the Workers' Compensation Administration Account
(WSCAA) fund and the remaining 0.88% is deposited into the Unrestricted General Fund (UGF).
SelfInsurer Revenue: The Workers' Compensation Division collects a 2.9% Service Fee of all payments reported to the Division; the revenue froom this fee is deposited into the WSCAA fund.
  HB079CS(FIN)-DOLWD-WC-02-16-18                                         Page 3 of 4                                                                                                        Control Code: gChwh
                                                                                                  CSHB 79(FIN) - Fiscal Note 8
    Department of Labor and Workforce Development
    Workers' Safety and Compensation Account Balance Scenarios
   Updated February 16, 2018
                                                       FY19          FY19
                                                    Governor's    Governor's        FY19
                                       FY19          w/Appeals      w/WC          Governor's
                                     Governor's     Commission Efficiencies Bill w/HB 69 and
                                      Budget       Repeal (HB 69)  (HB 79)          HB 79
   FY18 Beginning Balance        $      5,305.9    $    5,305.9       $   5,305.9   $   5,305.9
     FY18 Revenue                $      6,973.6    $    6,973.6       $   6,973.6   $   6,973.6
     FY18 Expense                $      9,124.3    $    9,124.3       $   9,124.3   $   9,124.3
   FY19 Beginning Balance        $      3,155.2    $    3,155.2       $   3,155.2   $   3,155.2
     FY19 Revenue                $      6,973.6    $    6,973.6       $   8,779.4   $   8,779.4
     FY19 Expense                $      9,117.9    $    8,907.1       $   9,117.9   $   8,907.1
   FY20 Beginning Balance        $      1,010.9    $    1,221.7       $   2,816.7   $   3,027.5
     FY20 Revenue                $      6,973.6    $    6,973.6       $   8,779.4   $   8,779.4
     FY20 Expense                $      9,117.9    $    8,696.3       $   9,058.1   $   8,636.5
   FY21 Beginning Balance        $     (1,133.4)   $     (501.0)      $   2,538.0   $   3,170.4
     FY21 Revenue                $      6,973.6    $    6,973.6       $   8,779.4   $   8,779.4
     FY21 Expense                $      9,117.9    $    8,696.3       $   9,058.1   $   8,636.5
   FY22 Beginning Balance        $     (3,277.7)   $   (2,223.7)      $   2,259.3   $   3,313.3
     FY22 Revenue                $      6,973.6                       $   8,779.4   $   8,779.4
     FY22 Expense                $      9,117.9                       $   9,058.1   $   8,636.5
   FY23 Beginning Balance        $     (5,422.0)                      $   1,980.6   $   3,456.2
   Assumptions:
     1) WSCAA revenue without any legislative changes is based on FY17 actual revenue.
     2) HB 69 would result in a savings of $210.8 in FY19, and $421.6 FY20 and beyond.
     3) HB 79 would result in additional revenue to WSCAA of $1,805.8 in FY19 and beyond.
     4) HB 79 would result in a savings of $59.8 in FY20 and beyond.
HB079CS(FIN)-DOLWD-WC-02-16-18                          Page 4 of 4                                           Control Code: gChwh
Statutes affected: 
HB0079A, AM HB 79, introduced 01/25/2017: 23.05.067, 23.30.155, 21.09.210, 37.05.146, 23.30.015, 23.30.095, 23.30.070, 23.30.075, 23.30.080, 23.30.085, 23.30.250, 23.05.080, 09.30.070, 23.30.082, 23.30.097, 23.30.098, 44.62.245, 23.30.110, 45.45.010, 23.30.175, 23.30.165, 23.30.205, 23.30.230, 16.05.940, 23.10.055, 47.27.035, 21.12.050, 08.88.161, 23.30.240, 23.30.247, 11.46.180, 11.46.120, 11.46.150, 23.30.170, 23.30.239, 23.30.395, 23.30.255, 23.30.260, 23.30.145, 23.30.012, 23.30.040
HB0079B, AM CSHB 79(L&C), introduced 03/24/2017: 23.05.067, 23.30.155, 21.09.210, 37.05.146, 23.30.070, 23.30.075, 23.30.080, 23.30.085, 23.30.250, 23.05.080, 09.30.070, 23.30.082, 23.30.097, 23.30.095, 23.30.098, 44.62.245, 23.30.110, 45.45.010, 23.30.165, 23.30.205, 23.30.230, 16.05.940, 23.10.055, 47.27.035, 21.12.050, 08.88.161, 23.30.240, 23.30.247, 11.46.180, 11.46.120, 11.46.150, 23.30.170, 23.30.239, 23.30.255, 23.30.260, 23.30.145, 23.30.012, 23.30.395, 23.30.040
HB0079C, AM CSHB 79(JUD), introduced 04/14/2017: 23.05.067, 23.30.155, 21.09.210, 37.05.146, 23.30.070, 23.30.075, 23.30.080, 23.30.085, 23.30.250, 23.05.080, 09.30.070, 23.30.082, 23.30.097, 23.30.095, 23.30.098, 44.62.245, 23.30.110, 45.45.010, 23.30.165, 23.30.205, 23.30.230, 16.05.940, 23.10.055, 47.27.035, 21.12.050, 08.88.161, 23.30.240, 23.30.247, 11.46.180, 11.46.120, 11.46.150, 23.30.239, 23.30.255, 23.30.260, 23.30.145, 23.30.012, 23.30.395, 23.30.040
HB0079D, AM CSHB 79(FIN), introduced 02/21/2018, passed House 03/12/2018: 23.05.067, 23.30.155, 21.09.210, 37.05.146, 23.30.070, 23.30.075, 23.30.080, 23.30.085, 23.30.250, 23.05.080, 09.30.070, 23.30.082, 23.30.097, 23.30.095, 23.30.098, 44.62.245, 23.30.100, 23.30.110, 45.45.010, 23.30.165, 23.30.205, 23.30.230, 16.05.940, 23.10.055, 47.27.035, 21.12.050, 08.88.161, 23.30.240, 23.30.247, 11.46.180, 11.46.120, 11.46.150, 23.30.239, 23.30.255, 23.30.260, 23.30.145, 23.30.012, 23.30.395, 23.30.040
HB0079E, AM SCS CSHB 79(FIN), introduced 05/11/2018, passed House 05/12/2018, passed Senate 05/11/2018: 23.05.067, 23.30.155, 21.09.210, 37.05.146, 23.30.070, 23.30.098, 44.62.245, 23.30.100, 45.45.010, 23.30.205, 23.30.230, 16.05.940, 23.10.055, 47.27.035, 23.30.095, 21.12.050, 08.88.161, 23.30.240, 23.30.247, 23.30.260, 23.30.145, 23.30.012, 23.30.395, 23.30.040
HB0079Z, AM Enrolled HB 79, introduced 05/12/2018: 23.05.067, 23.30.155, 21.09.210, 37.05.146, 23.30.070, 23.30.098, 44.62.245, 23.30.100, 45.45.010, 23.30.205, 23.30.230, 16.05.940, 23.10.055, 47.27.035, 23.30.095, 21.12.050, 08.88.161, 23.30.240, 23.30.247, 23.30.260, 23.30.145, 23.30.012, 23.30.395, 23.30.040