Legislature(2015 - 2016)SENATE FINANCE 532

04/17/2015 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
= HB 123 Presentation: Overview FY17 Operating Budget
Moved SCS CSHB 123(FIN) Out of Committee
= HB 135 PUBLIC EMPLOYEE ROTH CONTRIBUTIONS
Moved HB 135 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 50 AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT TELECONFERENCED
+= HB 105 AIDEA: BONDS;PROGRAMS;LOANS;LNG PROJECT TELECONFERENCED
Scheduled but Not Heard
+= HB 176 REPEAL ST EMPL SALARY INCREASE TELECONFERENCED
Moved CSHB 176(FIN) Out of Committee
HOUSE BILL NO. 135                                                                                                            
                                                                                                                                
     "An Act establishing a Roth contribution program for                                                                       
     the public employees' deferred compensation program;                                                                       
     and providing for an effective date."                                                                                      
                                                                                                                                
2:22:10 PM                                                                                                                    
                                                                                                                                
ANDY    MILLS,    LEGISLATIVE   LIAISON,    DEPARTMENT    OF                                                                    
ADMINISTRATION, explained  that the legislation  would allow                                                                    
for a Roth  457 contribution option for  state employees. He                                                                    
relayed  that  state  employees  could  currently  pay  into                                                                    
deferred   compensation,   which   allowed  them   to   save                                                                    
additional   money,  for   dispersement  at   the  time   of                                                                    
retirement. The  deferred compensation option was  a pre-tax                                                                    
option, with taxes  being paid at the  time of distribution.                                                                    
He  said  that the  Roth  457  would  allow for  a  post-tax                                                                    
option, giving the  employee the ability to not  be taxed at                                                                    
pay  out.  He  stated  that the  option  would  allowed  for                                                                    
diversification in  retirement choices and was  optional. He                                                                    
explained  that in  January of  2011 the  federal government                                                                    
began offering  the option. He  added that the  option would                                                                    
be  useful given  the uncertainty  of future  taxation rates                                                                    
due to the federal deficit.                                                                                                     
                                                                                                                                
2:25:06 PM                                                                                                                    
                                                                                                                                
KATHY  LEA, CHIEF  PENSION OFFICER,  DIVISION OF  RETIREMENT                                                                    
AND  BENEFITS, DEPARTMENT  OF  ADMINISTRATION, reviewed  the                                                                    
sectional analysis (copy on file):                                                                                              
                                                                                                                                
     Section 1.  AS 39.45.050  is repealed and  reenacted to                                                                  
     provide for  a post-tax  Roth investment option  in the                                                                    
     public  employees'   deferred  compensation   plan  and                                                                    
     clarifies  that state  and federal  income  tax is  not                                                                    
     deferred under this option.  The section establishes if                                                                    
     no  positive election  is made  for a  Roth investment,                                                                    
     contributions will be deemed to  be on a pre-tax basis.                                                                    
     This  allows   the  pre-tax  target  date   options  to                                                                    
     continue  as the  default option  for the  plan if  the                                                                    
     member  makes  no   investment  election.  The  section                                                                    
     establishes  dollar  limitations   in  accordance  with                                                                    
     Internal   Revenue   Code    rules   and   allows   the                                                                    
     Administrator  of  the  plan  to  establish  rules  and                                                                    
     procedures   governing   the    election   process   by                                                                    
     participating employees.                                                                                                   
                                                                                                                              
     Section  2. AS  39.45.060 adds  a definition  of "Roth"                                                                  
     contributions  to  have  the meaning  under  26  U.S.C.                                                                    
     402A(c)                                                                                                                    
                                                                                                                              
     Section  3. Establishes  an effective  date of  July 1,                                                                  
     2015.                                                                                                                      
                                                                                                                                
2:26:10 PM                                                                                                                    
                                                                                                                                
Senator Bishop asked for more information on how the plan                                                                       
would be taxed.                                                                                                                 
                                                                                                                                
Mr. Mills explained that the bill would allow the                                                                               
investment to be taxed now; at the time of retirement the                                                                       
money set aside, plus earnings, would be tax free.                                                                              
                                                                                                                                
2:26:56 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy understood that the bill would not limit                                                                       
the investment tools that could be used, such as investing                                                                      
in high risk stocks.                                                                                                            
                                                                                                                                
Mr. Mills replied that all of the options currently offered                                                                     
by the state would be available to the plan.                                                                                    
                                                                                                                                
2:27:39 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
2:28:34 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:29:56 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon discussed housekeeping and the suggested                                                                     
a break in the meeting to discuss the course of action                                                                          
pertaining to the legislation on the agenda.                                                                                    
                                                                                                                                
2:31:08 PM                                                                                                                    
RECESSED                                                                                                                        
                                                                                                                                
3:13:15 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 135                                                                                                            
                                                                                                                                
     "An Act establishing a Roth contribution program for                                                                       
     the public employees' deferred compensation program;                                                                       
     and providing for an effective date."                                                                                      
                                                                                                                                
3:13:40 PM                                                                                                                    
                                                                                                                                
Vice-Chair Micciche discussed the fiscal note.                                                                                  
                                                                                                                                
Vice-Chair Micciche MOVED to report HB 135 out of Committee                                                                     
with individual recommendations and the accompanying fiscal                                                                     
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB 135 was REPORTED out of committee with a "do pass"                                                                           
recommendation and with one previously published zero                                                                           
fiscal note: FN 1(ADM).                                                                                                         
                                                                                                                                
3:14:51 PM                                                                                                                    
AT EASE.                                                                                                                        
                                                                                                                                
3:16:14 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
HB 123 Testimony in support of HB 123 - Lindsey.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Opposing Letter - Yoder.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Sponsor Statement.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Support Letter - Barrett.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Support Letter - Berardi.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Support Letter - Kole.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Support Letter - Schulte.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Support Letter - Tacke.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Support Letter - Williams.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Support Letter Hollister.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Supporting Documents - ABC Implementation Recommendations.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 - Supporting Documents - Initiative Language.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 handout 4 16 15.docx SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 -Support Letter - Shulte.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 Supporting Documents - Structural Comparison.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB135 Public Employee Roth Contributions Transmittal Letter.pdf SFIN 4/17/2015 1:30:00 PM
HB 135
HB135 - Sectional Analysis.pdf SFIN 4/17/2015 1:30:00 PM
HB 135
HB135 - Supporting Document - Roth 457 FAQs.pdf SFIN 4/17/2015 1:30:00 PM
HB 135
HB 123 SCS CSHB123(L&C) Sectional Analysis.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB123 Explanation of Changes.pdf SFIN 4/17/2015 1:30:00 PM
HB 123
HB 123 Amendment 1.pdf SFIN 4/17/2015 1:30:00 PM
HB 123