HB 492: "An Act relating to the transfer of the state's interest in certain gas to the Alaska Retirement Management Board for the purpose of satisfying the unfunded accrued actuarial liability of the state and employers of teachers in the state to state retirement systems; and providing for an effective date."
00 HOUSE BILL NO. 492 01 "An Act relating to the transfer of the state's interest in certain gas to the Alaska 02 Retirement Management Board for the purpose of satisfying the unfunded accrued 03 actuarial liability of the state and employers of teachers in the state to state retirement 04 systems; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 07 to read: 08 LEGISLATIVE FINDINGS AND INTENT. (a) The legislature finds that 09 (1) art. XII, sec. 7, Constitution of the State of Alaska, requires that accrued 10 benefits in employee retirement systems may not be diminished or impaired; 11 (2) as of June 30, 2004, the unfunded liability of the state and employers of 12 teachers to state retirement systems was approximately $5,000,000,000; 13 (3) the contributions for an employer with employees participating in either 14 the public employees' retirement system or the teachers' retirement system include a rate
01 required for the current contribution plus an additional rate for the unfunded accrued actuarial 02 liability of the system; 03 (4) the contribution rate for the unfunded accrued actuarial liability of each 04 system varies with the amount of the unfunded liability and creates an unknown financial 05 burden on the state, the University of Alaska, and school districts in the state; 06 (5) while this Act may not fully fund the future actuarial liability of the state 07 and employers of teachers to state retirement systems as it accrues, it will help employers to 08 satisfy the obligations to retirees and allow for reasonable rates of contribution; and 09 (6) the transfer of certain natural gas interests of the state to the Alaska 10 Retirement Management Board as an asset to secure the funding of what is now the unfunded 11 liability of the state and employers of teachers to state retirement systems ensures compliance 12 with the mandate of art. XII, sec. 7, Constitution of the State of Alaska, reduces the ongoing 13 liability of employers to satisfy the unfunded liability, and is in the best interests of the state, 14 the University of Alaska, and school districts in the state. 15 (b) It is the intent of the legislature that the value of the natural gas interests 16 transferred to the Alaska Retirement Management Board will equal the amount of the 17 presently unfunded accrued actuarial liabilities of the state and employers of teachers to state 18 retirement systems and reduce the ongoing financial burden on the state and employers of 19 teachers that contribute to the accrued liability of these retirement systems. 20 * Sec. 2. AS 14.25.070 is amended by adding a new subsection to read: 21 (d) The employer contribution rate in (b) and (c) of this section shall be 22 determined by taking into consideration the gas interests transferred to the Alaska 23 Retirement Management Board under AS 38.95.310 and the allocation of the lease 24 rentals, royalties, royalty sale proceeds, net profit shares, and other receipts related to 25 the gas interests. 26 * Sec. 3. AS 37.10.220(a) is amended by adding new paragraphs to read: 27 (16) separately account for the interest in and amounts obtained from 28 management of the gas interests transferred to the board under AS 38.95.310; 29 (17) equitably allocate lease rentals, royalties, royalty sale proceeds, 30 net profit shares, and other receipts related to the gas interests transferred to the board 31 under AS 38.95.310 to the liabilities of the state and each employer of teachers taking
01 into consideration the effort of each employer to meet the employer's obligation to 02 fund the unfunded accrued actuarial liability, for the purpose of reducing the unfunded 03 accrued actuarial liability of each system; 04 (18) determine the value of the gas interests transferred to the board 05 under AS 38.95.310 at the time of transfer; and 06 (19) submit an annual report to the Legislative Budget and Audit 07 Committee stating the unfunded accrued actuarial liability of the state and employers 08 of teachers to state retirement systems and the effect of the transfer of the gas interests 09 to the board under AS 38.95.310 on those liabilities. 10 * Sec. 4. AS 38.95 is amended by adding new sections to read: 11 Article 8. Gas Transfers to the Alaska Retirement Management Board. 12 Sec. 38.95.310. Transfer of gas interests to the Alaska Retirement 13 Management Board. (a) Subject to (b) of this section and in consultation with the 14 board, the commissioner shall identify and transfer the state's interests in gas 15 underlying state land having a value equal to $5,000,000,000 and a reasonable 16 expectation of development to the board for the purpose of satisfying the unfunded 17 accrued actuarial liability of the state and employers of teachers to state retirement 18 systems. 19 (b) The interests of the state transferred under (a) of this section do not include 20 the required contributions to the Alaska permanent fund under art. IX, sec. 15, 21 Constitution of the State of Alaska, or to the public school trust fund under 22 AS 37.14.150 from the mineral lease rentals, royalties, royalty sale proceeds, net profit 23 shares, and other receipts related to the gas interests. 24 (c) An interest in gas transferred in (a) of this section is subject to any valid 25 possessory interest or other valid existing right, including any lease, and sec. 6(i) of 26 the Alaska Statehood Act (P.L. 85-508, 72 Stat. 339). 27 (d) The commissioner shall manage the gas interests transferred under (a) of 28 this section on behalf of the board in the manner provided for leasing gas resources 29 under AS 38.05.180 and shall make the required contributions to the funds identified 30 in (b) of this section. The board shall reimburse the department for the management 31 costs incurred under this section.
01 (e) After finding that the unfunded accrued actuarial liability of the state and 02 employers of teachers to state retirement systems has been satisfied or reduced to an 03 amount that can be satisfied through a reasonable rate of contribution, the board shall 04 transfer the gas interests received under (a) of this section to the commissioner. 05 Sec. 38.95.315. Valuation of the transferred gas interests. The board, in 06 consultation with the commissioner, shall, within one year after the date of transfer, 07 determine the value of the gas interests transferred to the board at the time of transfer. 08 Sec. 38.95.320. Definitions. In AS 38.95.310 - 38.95.320, 09 (1) "board" means the Alaska Retirement Management Board 10 established under AS 37.10.210; 11 (2) "commissioner" means the commissioner of natural resources; 12 (3) "department" means the Department of Natural Resources; 13 (4) "gas" has the meaning given in AS 43.55.900; 14 (5) "teacher" has the meaning given in AS 14.25.220. 15 * Sec. 5. AS 39.35.270 is amended by adding a new subsection to read: 16 (d) The employer contribution rate for the state in (b) and (c) of this section 17 shall be determined by taking into consideration the gas interest transferred to the 18 Alaska Retirement Management Board under AS 38.95.310 and the allocation of the 19 lease rentals, royalties, royalty sale proceeds, net profit shares, and other receipts 20 related to the gas. 21 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 EMPLOYER'S RATE OF CONTRIBUTION ATTRIBUTABLE TO THE 24 UNFUNDED LIABILITY OF A PLAN. That portion of the rate of contribution for the state 25 or an employer of teachers to a state retirement system or plan attributable to the unfunded 26 accrued actuarial liability may not be adjusted during the one-year period after the date of the 27 first transfer of gas interests under AS 38.95.310, enacted in sec. 4 of this Act. 28 * Sec. 7. This Act takes effect July 1, 2006.