Legislature(2013 - 2014)BARNES 124

04/02/2014 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 309 CRAFT DISTILLERY LICENSE TELECONFERENCED
Moved CSHB 309(L&C) Out of Committee
+= HB 152 PERS TERMINATION COSTS TELECONFERENCED
Moved CSHB 152(L&C) Out of Committee
*+ HB 160 LICENSING OF ATHLETIC TRAINERS TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 HB 152-PERS TERMINATION COSTS                                                                              
                                                                                                                                
3:50:22 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  next order of business  would be                                                               
HOUSE  BILL NO.  152,  "An Act  requiring  certain employers  who                                                               
terminate participation  in the  defined benefit  retirement plan                                                               
or  the  defined  contribution  retirement  plan  of  the  Public                                                               
Employees'  Retirement System  to make  contributions related  to                                                               
past  service liability  and pay  termination costs;  repealing a                                                               
requirement  that employers  who terminate  participation in  the                                                               
defined  contribution  retirement  plan or  the  defined  benefit                                                               
retirement plan  of the Public  Employees' Retirement  System pay                                                               
for  a termination  cost study;  and providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
3:50:29 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  explained the  committee heard  this bill  last year                                                               
and had hearings  on March 5, March  10 and March 19,  2014.  The                                                               
committee adopted  a proposed committee substitute  (CS), Version                                                               
Y, on March 10, 2014, and took public testimony.                                                                                
                                                                                                                                
3:50:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STEVE  THOMPSON,  Alaska  State  Legislature,  as                                                               
prime sponsor of HB 152, stated  that he is very passionate about                                                               
this bill.   He said passage  of HB 152 would  mean viability and                                                               
existence for many  small communities and villages  in the state.                                                               
He emphasized  that the state has  experienced declining revenues                                                               
with  less revenue  sharing.   He  explained  that with  layoffs,                                                               
termination studies add to the  debt.  For example, the community                                                               
of Galena pays over $20,000 per  month for debt and it means this                                                               
small community has less money to  keep people employed.  He said                                                               
he doesn't want to see the communities go bankrupt.                                                                             
                                                                                                                                
3:53:21 PM                                                                                                                    
                                                                                                                                
SALLIE  STUVEK, Human  Resources Director,  Fairbanks North  Star                                                               
Borough (FNSB), asked to testify in  support of HB 152.  She said                                                               
the FNSB believes that infusing  money into the unfunded PERS and                                                               
TRS  system  will  save  the   state  and  municipalities  future                                                               
contributions.    Prefunding  will   allow  the  FNSB  to  reduce                                                               
contributions in future years and  allow for interest earnings to                                                               
be utilized now,  increasing the funding ratio  for both systems.                                                               
In  addition, the  repeal of  the  termination study  requirement                                                               
will allow municipal  employers necessary operational flexibility                                                               
to manage their programs and  services.  Municipalities should be                                                               
able   to  adjust   their  workforce   without  concern   for  an                                                               
administrative  decision  today  having  long  lasting  financial                                                               
impacts to the municipality's PERS  liability.  She reported that                                                               
the  FNSB  assembly passed  a  resolution  on January  30,  2014,                                                               
supporting this and reiterated the FNSB's support of HB 152.                                                                    
                                                                                                                                
3:54:53 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after first  determining  no  one else  wished  to                                                               
testify, closed public testimony on HB 152.                                                                                     
                                                                                                                                
3:55:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  referred to  the 4/2/14 fiscal  note and                                                               
asked for clarification.                                                                                                        
                                                                                                                                
JANE PIERSON, Staff, Representative  Steve Thompson, Alaska State                                                               
Legislature referred  to a  March 4, 2014,  fiscal note  from the                                                               
Department of Administration that  is indeterminate; however, the                                                               
last line on page 2 of  the fiscal note reads, "Termination costs                                                               
would be approximately $75,000,000."                                                                                            
                                                                                                                                
REPRESENTATIVE REINBOLD said the fiscal note is $75 million.                                                                    
                                                                                                                                
MS. PIERSON agreed that is correct.   She said it assumes that 20                                                               
percent of the workforce would be laid off.                                                                                     
                                                                                                                                
3:56:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  expressed   concern  that  this  could                                                               
increase local  government contributions.   He  expressed further                                                               
concern that  it will grow  unfunded liability.   He acknowledged                                                               
the  problem  exists  for  small communities,  which  is  why  he                                                               
thought the  original version  of the  bill was  more compelling.                                                               
He  understood the  need  to  privatize the  work  force, but  he                                                               
remains  concerned about  what happened  in  the Municipality  of                                                               
Anchorage last year.   Yesterday an election  result was arguably                                                               
a referendum on  last year's events, although the  results of the                                                               
election are  not yet clear.   He highlighted his  concerns about                                                               
unnecessarily privatizing the public sector  since it can be more                                                               
responsive to  public need  than the private  sector since  it is                                                               
difficult to  know who to  direct a  complaint to in  the private                                                               
sector.  He acknowledged that this  issue is complicated.  He was                                                               
unsure  whether Version  Y is  the right  mechanism, particularly                                                               
since it is  vastly different from the original version.   He did                                                               
not think he would recommend its passage.                                                                                       
                                                                                                                                
3:59:01 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON offered  his belief  that it  is important  to bring                                                               
forth the issue to the public;  however, with such a large fiscal                                                               
impact he  wondered if  it would  have a tough  time in  the next                                                               
committee of referral.                                                                                                          
                                                                                                                                
REPRESENTATIVE   JOSEPHSON   acknowledged   that   Representative                                                               
Thompson was previously  a city mayor, which provides  him with a                                                               
unique perspective.                                                                                                             
                                                                                                                                
REPRESENTATIVE THOMPSON provided some  history, noting that years                                                               
ago the state went to  villages, communities, and boroughs to ask                                                               
them to  join in  the retirement system  to enhance  their hiring                                                               
ability, stabilize  the retirement benefit package,  and become a                                                               
tool for  communities.  He said  most joined and it  was good for                                                               
communities until the state discovered  its actuary misquoted the                                                               
debt.    The  state  outlined  the  percentage  of  payment,  and                                                               
communities  complied.   Through  no fault  of  their own,  these                                                               
communities have  been assessed  a portion of  unfunded liability                                                               
that is  detrimental to  the future of  some of  the communities.                                                               
He hoped that the state and  governor would provide a PERS fix to                                                               
address  the unfunded  liability;  however, in  the meantime  the                                                               
state could lose  small communities.  He said that  if 20 percent                                                               
of  the employees  were  all laid  off, it  could  result in  $75                                                               
million.    Some  communities  are  not  closing  departments  or                                                               
terminating employees  because they can't afford  the termination                                                               
costs.   He  characterized this  as being  a big  problem and  he                                                               
reiterated the importance of not losing communities.                                                                            
                                                                                                                                
4:01:54 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON said that this has been an issue for several years.                                                                 
                                                                                                                                
REPRESENTATIVE  HERRON  concurred with  Representative  Thompson.                                                               
He  said  that  the  choice has  negative  connotations,  but  he                                                               
emphasized the importance of protecting the "little people."                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD pointed out she  knows where to go in the                                                               
private sector.  She offered  her belief that businesses are very                                                               
responsive.  She thanked the sponsor for bringing this issue up.                                                                
                                                                                                                                
4:03:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  moved to  report the  proposed committee                                                               
substitute (CS)  for HB 152, labeled  28-LS-272\Y, Wayne, 2/26/14                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal  notes.  There  being no objection,  the CSHB
152(L&C) was reported from the  House Labor and Commerce Standing                                                               
Committee.                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
HB309 ver C.PDF HL&C 4/2/2014 3:15:00 PM
HB 309
HB309 Sponsor Statement.pdf HL&C 4/2/2014 3:15:00 PM
HB 309
HB309 Draft Proposed Blank CS ver Y.pdf HL&C 4/2/2014 3:15:00 PM
HB 309
HB309 Summary of Changes ver C to Ver Y.pdf HL&C 4/2/2014 3:15:00 PM
HB 309
HB309 Draft Proposed Amendment ver Y.1.pdf HL&C 4/2/2014 3:15:00 PM
HB 309
HB309 Draft Proposed Amendment ver Y.2.pdf HL&C 4/2/2014 3:15:00 PM
HB 309
HB309 Supporting Documents-Assorted Letters.pdf HL&C 4/2/2014 3:15:00 PM
HB 309
HB309 Supporting Documents-News Articles-Assorted.pdf HL&C 4/2/2014 3:15:00 PM
HB 309
HB309 Fiscal Note-DCCED-ABC-03-27-14.pdf HL&C 4/2/2014 3:15:00 PM
HB 309
HB160 ver O.pdf HL&C 4/2/2014 3:15:00 PM
HB 160
HB160 Sponsor Statement.pdf HL&C 4/2/2014 3:15:00 PM
HB 160
HB160 Sectional Analysis.pdf HL&C 4/2/2014 3:15:00 PM
HB 160
HB160 Fiscal Note-DCCED-CBPL-03-28-14.pdf HL&C 4/2/2014 3:15:00 PM
HB 160
HB160 Supporting Documents- Athletic Trainer Profession Sheet.pdf HL&C 4/2/2014 3:15:00 PM
HB 160
HB160 Supporting Documents- Athletic Trainers Fact Sheet.pdf HL&C 4/2/2014 3:15:00 PM
HB 160
HB160 Supporting Documents-Assorted Letters.pdf HL&C 4/2/2014 3:15:00 PM
HB 160