Legislature(2009 - 2010)BELTZ 105 (TSBldg)

03/30/2010 01:30 PM LABOR & COMMERCE

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01:53:39 PM Start
01:55:03 PM HB377
02:32:44 PM Confirmation Hearings
02:48:37 PM SB298
03:22:18 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Governor's Nominations TELECONFERENCED
Heard & Held
Moved HB 377 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
           HB 377-VOLUNTEER AMATEUR SPORTS OFFICIALS                                                                        
1:55:03 PM                                                                                                                    
CHAIR PASKVAN announced HB 377 to be up for consideration.                                                                      
1:55:08 PM                                                                                                                    
REPRESENTATIVE  BILL  STOLTZE,  sponsor  of  HB  377,  introduced                                                               
himself. He  said this issue was  brought to him by  folks active                                                               
in both Southcentral and Interior  youth sports activities facing                                                               
the  prospect of  finding  themselves in  a  unique situation  of                                                               
becoming something  they didn't  realize - direct  employers. The                                                               
problem arises  out of  enforcement by  the Alaska  Department of                                                               
Labor and  Workforce Development (DOLWD) to  protect workers from                                                               
manipulation  and  by strictures  of  the  federal government  on                                                               
employee exemptions for volunteer work as sports officials.                                                                     
1:56:27 PM                                                                                                                    
SENATOR BUNDE joined the committee.                                                                                             
REPRESENTATIVE  STOLTZE  said his  intent  is  to bring  forth  a                                                               
vehicle that  provides for as  much latitude for  these volunteer                                                               
organizations, which are basically scraping  by to just keep kids                                                               
on  the ice  or  on the  soccer fields  and  providing the  basic                                                               
scoring and  officiating that is  needed, without the  having the                                                               
responsibilities  of  unemployment  tax. The  federal  government                                                               
provides  a $1500  exemption for  volunteer activities  that have                                                               
some compensation.  It is not a  wage, but rather a  stipend or a                                                               
per diem type  of compensation. He preferred  a broader approach,                                                               
but his  hands are  tied by  the federal law.  He said  that many                                                               
Alaskans are  involved in youth  sports; so this is  an important                                                               
He said  the Alaska School  Activities Association (ASAA)  is the                                                               
main entity that brought this  forward and it has avalanched into                                                               
other folks presenting their interests.                                                                                         
1:59:46 PM                                                                                                                    
MORGAN HOBSON,  staff to Representative Stoltze,  said the intent                                                               
of the bill is not to help folks  who referee as a full time job,                                                               
but to  help people  who volunteer their  time at  local sporting                                                               
events and  receive money to  cover incidentals such as  food and                                                               
travel.  These  volunteers  cover  many  of  their  own  expenses                                                               
including  training, certification,  costs associated  with their                                                               
officials  organizations, uniforms,  and  this  job is  performed                                                               
purely as  an avocation  for the sake  of community  sports. This                                                               
measure  would only  apply to  volunteers who  receive less  than                                                               
$1500 cumulatively  per year  over all  sports they  are involved                                                               
with as well  as supporting organizations. This  amount cannot be                                                               
raised,  although many  people have  testified that  it would  be                                                               
beneficial  to have  a higher  amount. But  the state  would lose                                                               
funding for unemployment insurance if that amount was raised.                                                                   
Sports officials, whether they are  volunteers or amateurs cannot                                                               
be entirely exempted from unemployment  insurance, but this gives                                                               
leeway to help folks who do  this for several games in the summer                                                               
or who help out with a son or daughter's sport event.                                                                           
2:01:40 PM                                                                                                                    
SENATOR  BUNDE  said  he  received  several  communications  from                                                               
people supporting  this issue, but  nothing from  people opposing                                                               
it and he wanted to know if there is any opposition.                                                                            
MS. HOBSON  replied that  the only concerns  they have  heard are                                                               
from folks who  want a higher limit, but after  looking into that                                                               
they found it is not a possibility.                                                                                             
REPRESENTATIVE  STOLTZE added  that  the opposition  has been  in                                                               
legal form from the federal government.                                                                                         
SENATOR  BUNDE  asked  if these  various  groups  have  liability                                                               
insurance that would cover injuries.                                                                                            
MS. HOBSON  answered that workers' compensation  would be totally                                                               
outside of this.                                                                                                                
REPRESENTATIVE   STOLTZE  added   that   ASAA  carries   workers'                                                               
compensation  insurance,  but he  would  leave  that to  them  to                                                               
testify about.                                                                                                                  
2:03:40 PM                                                                                                                    
CHAIR PASKVAN asked if it is  possible for one of these officials                                                               
to  receive  unemployment  insurance,   and  if  so,  under  what                                                               
SENATOR  JOE  THOMAS   asked  relative  to  the   $1500  cap  for                                                               
compensation,  would it  be a  good idea  to consider  the soccer                                                               
association  or whatever  as the  employer so  they can  fill out                                                               
some kind  of contract acknowledging  that they are  a volunteer,                                                               
and  setting out  standards  to eliminate  confusion  at a  later                                                               
REPRESENTATIVE  STOLTZE   replied  that  these  people   are  not                                                               
employees  of  the school  districts  or  associations. They  are                                                               
usually dispatched through an official's  association. They do it                                                               
for love of the sport and to stay involved.                                                                                     
2:06:23 PM                                                                                                                    
SENATOR KEVIN MEYER joined the committee.                                                                                       
2:06:31 PM                                                                                                                    
SENATOR BUNDE said he is all  in favor of the bill, but sometimes                                                               
the  push back  from people  who do  activities like  this for  a                                                               
living  is that  their  opportunity  to make  a  living is  being                                                               
undercut.  His  comment  earlier   was  if  they  were  full-time                                                               
employees there  would be some workers'  compensation involved if                                                               
there was  an injury.  What kind of  liability coverage  do these                                                               
part time workers have?                                                                                                         
PAULA SCAVERA,  legislative liaison,  Alaska Department  of Labor                                                               
and  Workforce  Development (DOLWD),  said  that  she asked  this                                                               
question of the  workers' compensation division and  she was told                                                               
that volunteers are volunteers and  they are exempt from workers'                                                               
compensation laws.                                                                                                              
SENATOR BUNDE said  that is a little part of  his problem. It's a                                                               
contradiction   in  terms.   How   can  someone   get  paid   for                                                               
MS. SCAVERA  replied that these  are not considered wages  - they                                                               
get their uniform  cleaned or they get reimbursed for  a new rule                                                               
book.  Language on  page 7  of HB  377 says  that volunteer  work                                                               
means "work  for which compensation  does not exceed and  is paid                                                               
only  to defray  or reimburse  the reasonable  food, travel,  and                                                               
incidental expenses  the person  occurs in  order to  perform the                                                               
work." The word "wages" isn't there.                                                                                            
SENATOR BUNDE said  he is more familiar with it  being labeled as                                                               
an honorarium.                                                                                                                  
MS. SCAVARA stated  that she wasn't a drafting  attorney and that                                                               
is the way it was drafted.                                                                                                      
2:09:17 PM                                                                                                                    
CHAIR PASKVAN  asked if  they are exempted,  could they  still be                                                               
covered under Unemployment Insurance.                                                                                           
BILL CRAEMER, Chief, Unemployment  Insurance, Department of Labor                                                               
and  Workforce  Development  (DOLWD),  answered  if  someone  has                                                               
covered wages  in the system  and then they file  an unemployment                                                               
claim  they  could  draw unemployment  benefits  based  on  those                                                               
wages.  Reimbursement for  expenses  - uniforms  and travel,  for                                                               
instance - are not considered wages.  They are not taxed and they                                                               
wouldn't help someone qualify for a claim.                                                                                      
2:10:46 PM                                                                                                                    
RICHARD WISENEN,  certified USA  Hockey official,  Kenai, Alaska,                                                               
said  he is  also  a certified  National  Federation high  school                                                               
hockey official, a  volunteer local supervisor and  a trainer for                                                               
USA  Hockey that  trains hockey  officials. He  also sits  on the                                                               
board of  directors for their  local hockey  referee association.                                                               
He  said  they  need  to avoid  any  unintended  consequences  of                                                               
passing any bill, and if this  bill passes it won't alleviate the                                                               
current problem  that is forcing  sport programs to cut  back due                                                               
to the  increased cost of  obtaining officials for the  games. In                                                               
the case of the Hockey  Referee Association, they supply official                                                               
for everything  from youth  hockey to  varsity junior  varsity at                                                               
the high school  level and adult leagues. If they  have to charge                                                               
each  group the  extra fees  to cover  unemployment and  workers'                                                               
compensation for these  games it will be even  more expensive for                                                               
the programs.                                                                                                                   
He said the $1500 cap only  adds confusion. Any time a referee is                                                               
assigned a  game he has to  charge the league for  those fees and                                                               
might have no idea which person that  is going to bid for the job                                                               
will  be  able  to  pass  that threshold  in  their  year.  Their                                                               
officials' contracts,  which were  drawn up with  the help  of an                                                               
attorney, include  the statement  that they  are working  for the                                                               
association as  independent contractors  and as such  no workers'                                                               
compensation   or  unemployment   needs  to   be  withheld.   His                                                               
association pays  $35,000 -  $40,000 a  year to  approximately 50                                                               
different officials.  With these  regulations, they  are thinking                                                               
about hiring  an accountant  that would add  an extra  $10,000 to                                                               
the  fees  they  have  to charge  the  association.  Currently  a                                                               
volunteer treasurer handles this as an independent contractor.                                                                  
He said  a number  of young  people officiate  at boys  and girls                                                               
soccer as  well as the  hockey program,  and many are  beyond the                                                               
$1500 threshold. Most states he  has worked in treat officials as                                                               
independent contractors  and thus avoid this  dilemma completely.                                                               
They  would be  better  served providing  an  exemption under  AS                                                               
23.10.055 where  17 other exemptions for  the Employment Security                                                               
Act  reside  rather  than  forward HB  377.  He  suggested  using                                                               
language  saying that  "anyone officiating  amateur sports  where                                                               
they  are  compensated  on  a  per game  basis"  and  that  would                                                               
eliminate  the  problem  they are  facing.  Sports  programs  are                                                               
already very  costly, but they  are important to the  welfare and                                                               
health of our communities. They are trying to help the kids out.                                                                
2:15:01 PM                                                                                                                    
REPRESENTATIVE STOLTZE commented that  he prefers an exemption as                                                               
well, but  this is  what the  Department of  Labor says  the feds                                                               
will allow. It's  not as simple as what the  gentleman from Kenai                                                               
stated. The path in SB 377 will meet the legal test.                                                                            
SENATOR BUNDE  said previous testimony indicated  that volunteers                                                               
were part  of an organization.  His conception  is that a  lot of                                                               
these teams  are not hiring out  of a main hall;  they're getting                                                               
their volunteer workers from an informal group locally.                                                                         
REPRESENTATIVE STOLTZE responded that  some of the more organized                                                               
sports generally  have an a bigger  more sophisticated official's                                                               
association like USA Hockey that  that has expenses. It makes the                                                               
operation of  a local  summer soccer  league pale  in comparison.                                                               
This  issue  is  difficult,  he  said,  and  HB  377  won't  help                                                               
everybody, but  it will  provide relief for  many. He  would have                                                               
preferred an  exemption, but he  didn't want to open  other doors                                                               
and   provide  abuse   of  contract   employees.  He   said  it's                                                               
frustrating because  their hands are  tied at a level  far beyond                                                               
the borders of our state.                                                                                                       
2:19:32 PM                                                                                                                    
MS.  SCAVERA  added  that  she  helped  Representative  Stoltze's                                                               
office send four different bill  versions to the US Department of                                                               
Labor (USDOL)  to see what would  pass. Then they looked  at what                                                               
other states tried  to do and found this. USS  Code 26.33.09 says                                                               
non  profits  and  government entities  cannot  exempt  employees                                                               
totally from  the Unemployment Insurance  Act. One of  the drafts                                                               
tried the exclusion and USDOL said no.                                                                                          
2:21:30 PM                                                                                                                    
SENATOR THOMAS said he was a  little confused about what they are                                                               
actually considering.  They talked about volunteers  in the bill,                                                               
yet  some   of  the  attached  information   doesn't  talk  about                                                               
volunteers   at  all,   but  rather   people  in   two  different                                                               
classifications  that are  independent contractors  or employees.                                                               
Is   that  what   is  confusing   the   situation?  Is   workers'                                                               
compensation the issue they are looking at?                                                                                     
MS. SCAVERA  said she  hadn't read the  article he  was referring                                                               
to,  but she  knew  there was  a  difference between  independent                                                               
contractors and  volunteers. This bill is  just about volunteers;                                                               
it has  nothing to  do with the  relationship of  contractors and                                                               
independent contractors.  Since December she had  been talking to                                                               
people from  other states that are  trying to do the  same thing,                                                               
and  some  of  them  have   gone  to  an  independent  contractor                                                               
situation and later had those struck down by the USDOL.                                                                         
SENATOR THOMAS  asked if there  is a  way to solve  the situation                                                               
that was brought to them by  Mr. Wisenen short of where they are.                                                               
His  concern seemed  to  be paying  the  individuals and  somehow                                                               
keeping track  of the pay and  when a person hits  the $1500 cap.                                                               
Is that your understanding of the problem?                                                                                      
2:24:34 PM                                                                                                                    
MR.  CRAEMER answered  that the  federal law  is very  clear that                                                               
wages of  sports officials  working for  non-profit organizations                                                               
may not  be exempted  from being  covered under  the Unemployment                                                               
Insurance  Program.   The  federal  statute  tries   to  be  very                                                               
inclusive  to provide  coverage  for workers;  so  they want  the                                                               
wages included.  They specifically say  they may not  be exempted                                                               
because  of  being for  a  nonprofit  organization. The  question                                                               
about employees  versus independent contractors  gets complicated                                                               
fairly quickly. Alaska  statute is very clear on it.  To meet the                                                               
level of independent contractor is a pretty difficult test.                                                                     
He said he  understands that HB 377  clarifies that reimbursement                                                               
for incurred expenses should not be reported as covered wages.                                                                  
SENATOR THOMAS said he didn't  see this reimbursement up to $1500                                                               
as wages,  and he thought  this bill  was the best  solution they                                                               
could find.                                                                                                                     
MS.  SCAVERA  said  this  bill  was for  those  people  who  have                                                               
actually tried to  referee a soccer game once,  to reimburse them                                                               
for gas  or meals, a uniform  or studying the rules.  They aren't                                                               
wages  whatsoever.  It's to  help  reimburse  the "mom  and  pop"                                                               
organizations.  She said  she has  a  friend who  goes through  a                                                               
couple of  uniforms a year  officiating kids' basketball  games -                                                               
kids bleed on  his shirt and things  like that. So he  can put in                                                               
to be reimbursed for his uniform.                                                                                               
CHAIR PASKVAN stated he  thought Representative Stoltze indicated                                                               
it very  well when he said  this is not a  solution for everyone.                                                               
Federal law does  not allow a broader solution. This  is the best                                                               
that can be done.                                                                                                               
2:29:33 PM                                                                                                                    
SENATOR BETTYE DAVIS  said she thought the Department  of Law was                                                               
on line and wanted  to know if they had something  to add. No one                                                               
from the department was on line, so they moved on.                                                                              
2:30:02 PM                                                                                                                    
SENATOR  THOMAS  moved  to  report HB  377  from  committee  with                                                               
individual  recommendations  and  attached zero  fiscal  note(s).                                                               
There were no objections and it was so ordered.                                                                                 
2:30:31 PM                                                                                                                    
CHAIR PASKVAN announced an at ease from 2:30 to 2:32 p.m.                                                                       

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