Legislature(2005 - 2006)HOUSE FINANCE 519
04/19/2006 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB325 | |
| HB399 | |
| HB475 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 475 | TELECONFERENCED | |
| + | HB 325 | TELECONFERENCED | |
| + | SB 55 | TELECONFERENCED | |
| + | SB 200 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 29 | TELECONFERENCED | |
| += | HB 399 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 19, 2006
1:54 p.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:54:39 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Richard Foster
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Beth Kerttula
Representative Carl Moses
Representative Bruce Weyhrauch
MEMBERS ABSENT
None
ALSO PRESENT
Representative Gabrielle LeDoux; Kim Wallace, Staff,
Representative Gabrielle LeDoux; Cliff Stone, Legislative
Liaison, Department of Public Safety; Anne Carpeneti,
Assistant Attorney General, Legal Services Section-Juneau,
Criminal Division, Department of Law; Susan Parks, Deputy
Attorney General, Criminal Division, Department of Law; Sue
Wright, Staff, Representative Mike Chenault; Representative
Paul Seaton; Katie Shows, Staff, Representative Paul Seaton;
Allison Elgee, Staff, Representative Reggie Joule
PRESENT VIA TELECONFERENCE
Stephen Saloom, Innocent Project, New York; Sidney
Billingslea; Lt. James Helgoe, Department of Public Safety
SUMMARY
HB 325 "An Act relating to post-conviction DNA testing;
and amending Rule 35.1, Alaska Rules of Criminal
Procedure."
CSHB 325 (FIN) was REPORTED out of Committee with
a "no recommendation" and with previously
published zero fiscal note #1 by the Department of
Corrections, with a new fiscal note by the
Department of Law, with a new indeterminate fiscal
note by the Department of Public Safety, and with
two new zero fiscal notes by the Department of
Administration.
HB 399 "An Act establishing the office of elder fraud and
assistance; and relating to fraud involving older
Alaskans."
CSHB 399 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with previously
published zero fiscal note #1 by the Department of
Health and Social Services, two new zero fiscal
notes by the Department of Law and the Department
of Public Safety, and with a new fiscal note by
the Department of Administration.
HB 475 "An Act describing contributions to the health
reimbursement arrangement plan for certain
teachers and public employees; clarifying
eligibility for membership in that health
reimbursement arrangement plan; relating to the
'administrator' of the Public Employees'
Retirement System of Alaska; and providing for an
effective date."
CSHB 475 (FIN) was REPORTED out of Committee with
a "no recommendation" and with a new zero fiscal
note by the Department of Administration.
HB 29 "An Act relating to health care insurance and to
the Comprehensive Health Insurance Association;
and providing for an effective date."
HB 29 was scheduled but not heard.
CSSB 55(FIN)
"An Act instructing the commissioner of natural
resources to issue a patent for the remaining
interest in certain state land to the owner of the
agricultural rights to that land."
CSSB 55(FIN) was scheduled but not heard.
CSSB 200(JUD) am
"An Act relating to defense of self, other
persons, property, or services."
CSSB 200(JUD) am was scheduled but not heard.
1:55:00 PM
HOUSE BILL NO. 325
"An Act relating to post-conviction DNA testing; and
amending Rule 35.1, Alaska Rules of Criminal
Procedure."
REPRESENTATIVE GABRIELLE LEDOUX introduced HB 325, an Act
relating to post-conviction DNA testing.
KIM WALLACE, STAFF, REPRESENTATIVE GABRIELLE LEDOUX, related
that CS for HB 325 (JUD), Version X, was before the
committee. It is "An act relating to post-conviction DNA
testing and amending Rule 35.1 of the Alaska Rules of
Criminal Procedure". Currently, 40 other states provide
convicted persons access to DNA testing.
Ms. Wallace referred to a handout in the packets prepared by
Legislative Research, dated February 1, 2006, which shows a
sample of states that have adopted legislation pertaining to
post-conviction DNA testing within the past 5-6 years. The
Innocence Project states that since 1989, over 170 people
imprisoned in the U.S. have been proven innocent through
post-conviction DNA testing.
The intent of HB 325 is to improve the Alaska Criminal
Justice system for all Alaskans by providing a statutory
right to DNA testing. Specifically, this Act establishes a
procedure for application for DNA testing and the
appointment of counsel. This legislation can help free an
innocent person, and let law enforcement and the public know
that a guilty and dangerous person is still at large.
Ms. Wallace reported that her office has collaborated with
the Department of Public Safety, the Division of Juvenile
Justice, the Department of Law, the Innocence Project, and
members of the House Judiciary Committee to make HB 325 a
better bill. There also was a House Judiciary subcommittee
formed which met on three separate occasions before the bill
was passed out of House Judiciary. Not every change that
was requested was made; however, the bill mirrors the
consensus of the subcommittee members.
Ms. Wallace related that an amendment that was made in House
Judiciary, on page 3, lines 21-25, has been discussed with
the Department of Public Safety, and the amender,
Representative Max Gruenberg. The word "any" on line 21 can
be deleted, and the words "any person" on line 22
substituted with "the applicant". This would help clarify
the intent of section (D).
The majority of the fiscal notes came back as zero or
indeterminate. The sponsor does not feel that this
legislation will inundate the courts with frivolous claims
from applicants and therefore asks this committee to
consider an indeterminate fiscal note for the Department of
Law.
Ms. Wallace concluded that if HB 325 can help just one
person prove their innocence, and the real perpetrator to be
identified by DNA testing, then "we will have achieved what
we set out to do".
1:59:09 PM
Representative Weyhrauch asked if the legal system allows
this to happen already without the bill. Ms. Wallace
responded that there are post-conviction release statutes
under Title 12, Section 72. She thought that there has to
be two criteria, newly discovered evidence or ineffective
assistance of council. The bill sets forth a procedure for
a judge to follow for post-conviction DNA testing.
2:00:56 PM
STEPHEN SALOOM, INNOCENCE PROJECT, NEW YORK, related that
the passage of this legislation will enable Alaska to join
the 40 other states that have addressed the potential that
DNA has to prove the accuracy of the criminal justice
system. The bill creates a route for considering
applications to test evidence that could confirm guilt or
find innocence. Across the country, 175 innocent people
have been freed from prison. Other states have had a
positive experience. There have been no reports that this
law would be a burden on the court. He emphasized that no
one benefits by an innocent person being convicted. The law
addresses whether further testing of evidence could help
settle claims of a mistaken conviction.
Mr. Saloom addressed the time limitation in the bill. Ms.
Carpeneti suggested a due diligence standard in the bill.
Mr. Saloom maintained that there is no such standard in any
other state. Most states allow the tests to be requested at
any time. Unnecessary litigation might be created by an
open or vague due diligence standard.
Mr. Saloom addressed the Department of Law's fiscal note,
which provides for hiring another attorney to deal with
these situations. He maintained that this law would save
money by providing the courts with a clear path for
accessing requests to retest biological evidence for DNA,
and thus, eliminate the need for litigation.
2:05:46 PM
CLIFF STONE, LEGISLATIVE LIAISON, DEPARTMENT OF PUBLIC
SAFETY, addressed the preservation of evidence on page 3 of
the bill. He suggested that the word "any" be deleted on
page 3, line 21, and that in line 22, "any person" be
deleted. He said "the applicant" is acceptable wording.
The crux of the preservation of evidence seems to be in the
retention of evidence for the lifetime of the convicted
person. The Department is not clear on who would qualify
under the bill. He said that the bill would not have an
immediate impact on the Department and on other law
enforcement agencies. Evidence lockers would become
problematic in the future because evidence needs to be kept
forever so facilities will have to be enlarged.
2:10:08 PM
Representative Stoltze asked if Palmer's cramped facility,
which is shared by all law enforcement agencies, is typical.
Mr. Stone said it was typical. Mr. Stone projected that
future management of evidence would require a new database
and management adjustments, as well as more storage.
Representative Stoltze asked if the proposed crime lab would
solve the problem. Mr. Stone said it would not. That
consists of evidence that is sent and reduced to a database
or a small storage space. He explained that biological
evidence can range from 10 to 15 boxes worth of material,
depending on the case, and can be retained for years. This
law would mandate that evidence be kept for the next 99
years.
Co-Chair Meyer asked if there was a concern about line 21 on
page 3. Mr. Stone replied that the word "any" seems to be
all-inclusive and is not needed. On line 22, the drafter
meant to say "the applicant" instead of "any person".
2:14:24 PM
Representative Holm asked about available technology and a
statewide DNA agency. He suggested finding a storage
facility before this bill passes.
Mr. Stone said that idea deserves some merit. With Post-
conviction DNA testing, evidence needs to be kept in case of
a need to re-test. Representative Holm suggested using
technology for the preservation and storage of evidence.
2:17:48 PM
Representative Kerttula MOVED to ADOPT Amendment 1, which,
on page 2, line 7, would delete "and any lesser included
offense".
Representative Stoltze OBJECTED for discussion purposes.
Representative Kerttula explained that the problem with the
language is that it is too broad. Co-Chair Chenault asked
for clarification. Representative Kerttula stated that the
problem lies with the application to be considered for re-
testing. Now it states that the person must declare that
they are innocent of everything before they can be
considered. She shared a family story. She maintained that
a person should only have to claim innocence of the crime
for which they were convicted.
2:21:31 PM
Representative LeDoux said she could live with that
amendment. She said she was aiming for someone who was
totally innocent.
Representative Weyhrauch agreed that, in the context of the
bill, the amendment makes sense. He gave an example of
exoneration for committing another crime. He spoke in
support of the amendment.
Representative LeDoux said she had thought of the example
that Representative Weyhrauch gave, but such an offense
would be considered separately.
2:24:44 PM
Representative Hawker requested an opinion from the
Department of Law.
SUSAN PARKS, DEPUTY ATTORNEY GENERAL, CRIMINAL DIVISION,
DEPARTMENT OF LAW, stated that the Department of Law does
not support Amendment 1. She said her concern is that the
amendment would allow a person who has been convicted of
st
murder in the 1 degree to request DNA testing. The bill is
not made for that purpose. It should not disturb a jury's
conclusion.
ANNE CARPENETI, ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES
SECTION-JUNEAU, CRIMINAL DIVISION, DEPARTMENT OF LAW,
presented the other side of the issue. The finality of
judgment is very important in all courts. There are
specific rules about how to attack a conviction after the
fact. The bill has to be limited to support the finality of
judgment and should be directed to the innocent person.
2:28:35 PM
Representative Kerttula asked for examples of lesser-
included offenses that are possible under Murder. Ms. Parks
responded "from Murder I down to Criminally Negligent
Homicide". Representative Kerttula said it is technically
correct to say not guilty to assault, all the way up to
murder. The language that reads "any" is too broad. Ms.
Parks agreed that it would include "any lesser included".
Representative Kerttula related that all of the other
charges would have been made. If the person was not
innocent, other things would preclude the person going free.
Ms. Parks countered that there are often stand-alone
homicides. She explained how DNA testing would work. A new
trial on everything could be requested if the DNA results
were favorable. She urged the committee to keep criteria
tight.
2:32:42 PM
Mr. Saloom shared that in other states the motions for DNA
testing have been fought even after a person was released.
Prosecutors held open the possibility of re-trying the
person or fought the motion to vacate the conviction. If
the person is innocent, but was found guilty, a talented
attorney could argue that maybe that DNA exonerates the
person from the higher crime, but the evidence shows that he
or she was at the scene. He voiced a concern that skilled
attorneys could prevent getting to the testing of the
evidence.
A roll call vote was taken on the motion to ADOPT Amendment
1.
IN FAVOR: Kerttula, Weyhrauch, Joule
OPPOSED: Foster, Hawker, Holm, Kelly, Chenault, Meyer
The MOTION FAILED (3-6).
2:35:37 PM
Representative Hawker MOVED to ADOPT Amendment 2, which
deletes all material on page 2, lines 30-31 and on page 3,
line 1, and inserts,"(1) by clear and convincing evidence,
that if the DNA testing requested produces the results
claimed by the applicant and had been admitted at trial, no
reasonable trier of fact would have convicted the
applicant;". It also deletes on page 4, lines 9-10,
"Notwithstanding any law or rule of procedure that bars an
application for post-conviction relief as untimely, an", and
inserts "an".
Co-Chair Meyer OBJECTED.
Ms. Carpeneti noted that the right approach to protecting
victims and perfectly good convictions is a very limited
one. The jury is the one to make that decision. The test
in Section 210, the standard upon which a judge will decide
whether or not to order post-conviction DNA testing, ought
to be clear. It should say that the court will order the
testing when the results of the test will conclusively show
that the person is innocent of the crime. The first part of
Amendment 2 does that and is very similar to the original
form of the bill, which was a much better standard.
2:38:14 PM
Representative Kerttula voiced a concern about Amendment 2
and the possibility that testing would never be ordered due
to the wording, which sets an impossible standard. Ms.
Carpeneti argued that the wording refers to "no reasonable
person". The wording is asking for testing, but hoping to
find innocence. Representative Kerttula suggested that this
is the first stage of trying to get the information tested.
She maintained that it an impossible task to prove "no
reasonable trier of fact". Ms. Carpeneti countered that
this is the language that was in the original bill. She
suggested the wording, "a reasonable trier of fact would not
have convicted the person". Representative Kerttula thought
that would present the same problems.
2:40:58 PM
Ms. Carpeneti addressed the second part of Amendment 2,
which removes the due diligence standard for a person
applying for post-conviction DNA testing. She addressed
"escape hatches", which prevents a person from sitting on
evidence for years. She disagreed with Mr. Saloom's
testimony that this would cause excessive litigation.
Representative Kerttula asked if this could potentially bar
someone who is completely innocent from ever getting the
test. Ms. Carpeneti responded that it would depend on the
circumstances. She referred to the Osborne case where the
evidence is overwhelming. She questioned if a person is
innocent and has a chance to bring the matter before the
court, and they doesn't, why they should be excused from
doing so. Representative Kerttula maintained that they
should have that relief. Ms. Carpeneti countered that it
depends on the definition of due diligence under the
circumstances.
2:45:09 PM
Representative Holm commented that normally people are
convicted beyond a reasonable doubt. Ms. Carpeneti said
always. Representative Holm said if due diligence is
applied correctly, people should not fall between the
cracks. He wondered if there is some way to preserve a
conviction based upon the fact that there is "justice among
a jury of our peers". Ms. Carpenti explained the right to
appeal. She noted that there are not many mistakes and it
is important to uphold convictions. A challenge ought to be
"it will" exonerate the person.
2:48:14 PM
Representative LeDoux commented on Amendment 2. She agreed
with Ms. Carpeneti's conclusions on the first part of the
amendment. She concurred with Representative Kerttula on
the second part. She related an example from the victim's
perspective. She addressed due diligence. The subcommittee
came to the conclusion that a reasonable person, upon
finding evidence of innocence, should take action
immediately, but many people don't act reasonably. A
conclusion was reached that it doesn't matter when the claim
is brought if there is evidence of innocence. She said she
does not like Amendment 2, especially the first part.
Representative Joule addressed the idea of "reasonable" by
rural standards. He said he could easily picture such a
situation when action was not taken when evidence of
innocence was known.
Representative Weyhrauch MOVED to divide Amendment 2 into
two parts, 2 A and 2 B.
2:53:46 PM
Representative Kerttula inquired if there could be cultural
differences in the response to due diligence.
Representative LeDoux agreed that there are cultural
differences. She wondered if someone should be put to death
because they didn't ask for due diligence. She indicated
that the same reasoning could be used for not keeping an
innocent person in prison.
A roll call vote was taken on the motion to ADOPT Amendment
2 A.
IN FAVOR: Moses, Wehyrauch, Hawker, Holm, Meyer
OPPOSED: Foster, Joule, Kelly, Kerttula, Chenault
The MOTION FAILED (5-5).
A roll call vote was taken on the motion to ADOPT Amendment
2 B.
IN FAVOR: Hawker, Chenault, Meyer
OPPOSED: Weyhrauch, Foster, Holm, Joule, Kelly, Kerttula,
Moses
The MOTION FAILED (3-7).
2:57:39 PM
Representative Hawker MOVED to ADOPT Amendment 3. Co-Chair
Meyer OBJECTED.
Ms. Wallace said that the sponsor agrees to Amendment 3:
Page 3, line 21, following "preserve"
Delete "any"
Page 3, line 22, following "which"
Delete "any person"
Insert "the applicant"
Representative Weyhrauch OBJECTED. He suggested that the
word "relevant" should replace the word "any".
Representative Hawker deferred to Mr. Stone.
2:59:01 PM
Mr. Stone related that the department does not have a
problem with Amendment 3. He agreed with Representative
Weyhrauch's suggestion.
Representative Weyhrauch MOVED to AMEND Amendment 3 to add
"relevant" after "preserve" on line 21. There being NO
OBJECTION, it was so ordered.
Representative Kerttula voiced a concern about removing the
word "any" because of a chance that what is relevant
evidence may be judged incorrectly. Mr. Stone responded to
Representative Kerttula's idea. He explained that the
officer in the field is going to collect all pertinent
evidence possible and the crime lab will process it. He
requested Lt. Helgoe's opinion.
Representative Weyhrauch commented that he is trying to make
the bill workable and practical.
3:02:33 PM
Representative Kerttula suggested "preserved any
identified".
3:03:07 PM
LT. JIM HELGOE, DEPARTMENT OF PUBLIC SAFETY, said it is a
bright line and the word "any" draws a clearer line. He
questioned what is "relevant" evidence.
Representative Kerttula MAINTAINED an OBJECTION to the
amendment to Amendment 3.
Representative Weyhrauch WITHDREW the amendment to Amendment
3.
Representative Kerttula commented that the language deleting
"any person" and inserting "the applicant" is just
technical. Representative LeDoux agreed. Representative
Kerttula WITHDREW her objection to adopting Amendment 3.
There being NO further OBJECTION, Amendment 3 was adopted.
3:05:32 PM
Susan Parks addressed the fiscal note from the Department of
Law. She expressed that the new version of the bill, which
would change the application requirements for the DNA test,
would increase the Department workload. The fiscal note
reflects the cost of a half-time lawyer. She stated that
the Department believes the fiscal note is an accurate
portrayal of the increased workload. She also proposed that
the legislation would increase the number of DNA cases to be
tried.
3:07:35 PM
Representative Hawker asked if the amendments had passed,
whether the fiscal note would be zero. Ms. Parks replied
yes.
Representative Foster MOVED to REPORT CSHB 325 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION it was
so ordered.
CSHB 325 (FIN) was REPORTED out of Committee with a "no
recommendation" and with previously published zero fiscal
note #1 by the Department of Corrections, with a new fiscal
note by the Department of Law, with a new indeterminate
fiscal note by the Department of Public Safety, and with two
new zero fiscal notes by the Department of Administration.
HOUSE BILL NO. 399
"An Act establishing the office of elder fraud and
assistance; and relating to fraud involving older
Alaskans."
3:10:20 PM
In response to a question by Representative Joule,
Representative Chenault confirmed that the committee had
previously adopted the Committee Substitute for HB 399, 24-
LS1517F\F.
Co-Chair Chenault MOVED Conceptual Amendment 2:
(e) Subject to the discretion of the court and
regulations promulgated by the office of public
advocacy, and taking into consideration the financial
condition of the parties to a civil suit brought under
this section, the office of public advocacy may seek
recovery of partial or full litigation costs and fees
from any party, including costs incurred during the
investigation of the case, whether the office of public
advocacy prevails or settles in the best interest of
the client. The office of public advocacy shall enter
a fee agreement with any party it represents in
accordance with this section, the Alaska Rules of
Court, and the Alaska Rules of Professional
Responsibility.
Co-Chair Meyer OBJECTED.
SUE WRIGHT, STAFF, REPRESENTATIVE MIKE CHENAULT, testified
regarding the amendment. It was suggested by Josh Fink,
Public Advocate, Office of Public Advocacy, in order to
allow the Office of Public Advocacy to recover partial
litigation costs from any party should they be successful in
prosecuting elder fraud.
3:12:04 PM
Co-Chair Chenault discussed questions raised regarding an
earlier amendment, as to whether monies would be taken from
seniors who had received a settlement.
Ms. Wright pointed out that the fees are in accordance with
the Alaska Rules of Court and the Alaska Rules of
Professional Responsibility, and could include monies over
and above any recovery issued by the court.
Co-Chair Meyer REMOVED his OBJECTION. There being no other
objection, Conceptual Amendment 2 was ADOPTED.
3:13:55 PM
Co-Chair Chenault discussed the fiscal note from the
Department of Administration, which was originally $638,000
and represented five full-time positions. He noted that his
office has worked with the Department, as well as with
constituents, to reduce the fiscal note. He explained that,
while that number of employees may eventually be needed, the
focus was to get the program started.
Ms. Wright related that the bill authorizes one Attorney
III, one part-time investigator and one part-time paralegal.
She also noted an added cost for the current caseload,
including a very egregious case. She outlined details of
this case, and its urgency. She commended Mr. Fink for
containing costs, while providing services to the elderly
clients.
3:16:54 PM
Representative Joule referred a March 6 fiscal note prepared
by Mr. Fink that showed $96,000 for employing an Attorney
III. Ms. Wright confirmed that the position was indeed
Attorney III, and the amount was adjusted in the new fiscal
note.
Co-Chair Meyer named the four fiscal notes: previously
published zero fiscal note #1 by the Department of Health
and Social Services, two new zero fiscal notes by the
Department of Law and the Department of Public Safety, and a
new fiscal note by the Department of Administration
3:18:03 PM
Representative Foster MOVED to REPORT CSHB 399 (FIN) out of
Committee, as amended, with individual recommendations and
the accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
CSHB 399 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with previously published zero
fiscal note #1 by the Department of Health and Social
Services, two new zero fiscal notes by the Department of Law
and the Department of Public Safety, and with a new fiscal
note by the Department of Administration.
HOUSE BILL NO. 475
"An Act describing contributions to the health
reimbursement arrangement plan for certain teachers and
public employees; clarifying eligibility for membership
in that health reimbursement arrangement plan; relating
to the 'administrator' of the Public Employees'
Retirement System of Alaska; and providing for an
effective date."
3:20:43 PM
At-Ease
3:21:53 PM
Representative Kerttula MOVED Amendment #2, 24-LS1685\L.1,
Wayne, 4/11/06:
Page 2, line 2, following "program;":
Insert "providing for an effective date by amending
sec. 148, ch. 9, FSSLA 2005, which contains an
effective date;"
Page 2, following line 3:
Insert new bill sections to read:
"* Section 1. AS 14.25.009 is amended to read:
Sec. 14.25.009. Applicability of AS 14.25.009 -
14.25.220. The provisions of AS 14.25.009 - 14.25.220
apply only to members first hired before July 1, 2008
[2006].
* Sec. 2. AS 14.25.012(c) is amended to read:
(c) Employees first hired after June 30, 2008
[2006], are not eligible to participate in the plan
established in AS 14.25.009 - 14.25.220."
Page 2, line 4:
Delete "Section 1"
Insert "Sec. 3"
Renumber the following bill sections accordingly.
Page 3, following line 12:
Insert a new bill section to read:
"* Sec. 7. AS 14.25.310 is amended to read:
Sec. 14.25.310. Applicability of AS 14.25.310 -
14.25.590. The provisions of AS 14.25.310 - 14.25.590
apply only to teachers who first become members on or
after July 1, 2008 [2006], or to members who transfer
into the defined contribution plan under AS 14.25.540."
Renumber the following bill sections accordingly.
Co-Chair Meyer OBJECTED.
Representative Kerttula explained that the amendment is a
two-year delay to enable more work to be done on the issues
just mentioned. It would allow time for corrections of
numerous problems and time for a reasonable decision to be
made.
3:23:24 PM
At-Ease
3:25:15 PM
Representative Kerttula clarified that the amendment would
delay the Committee Substitute for two years.
REPRESENTATIVE PAUL SEATON commented that Amendment 2 would
delay SB 141 for two years. He noted that that HB 475 is
for technical cleanups to SB 141, and the amendment is a
definite policy change, rather than a technical change. He
proposed that the other body and the Administration would
not agree with the amendment, and it would prevent HB 475
from going into affect. He suggested that this would create
compliance problems with the IRS, and prevent the
establishment of a new Tier Five.
3:27:30 PM
Representative Kelly commented that the amendment would
cause implementation problems and is irresponsible, since
Retirement and Benefits has already been tasked with the job
to implement SB 141 smoothly. He proposed that the
legislature should take advantage of the work already
completed. He suspected that there would be attempts to
bring more people into the plan, and suggested that this
would not, in affect, occur.
3:29:27 PM
At-Ease
3:37:06 PM
Representative Hawker offered a Conceptual Amendment to
Amendment 2 to delay the implementation one year to July 1
of 2007.
Representative Kelly OBJECTED to the Conceptual Amendment to
Amendment 2. He maintained that the implementation should
not be delayed at all.
Representative Hawker spoke to the Conceptual Amendment to
Amendment 2. He referred to last year's testimony on the
bill stating no need for changes to be made. Now there are
34 pages in HB 475 to correct issues. He pointed to
extensive testimony about unknown liabilities and IRS
issues. He maintained that a 2-year deferral is a very
comfortable deferral in order to resolve the many problems.
The Conceptual Amendment offers a more reasonable time
period to clean up issues. He termed it a sensible
approach.
Representative Kelly said if SB 141 is delayed, over 8,000
new employees will come into this failed system. He voiced
concern about the $5.7 billion unfunded liability. He
emphasized that it is irresponsible to delay the bill any
longer.
3:44:29 PM
Representative Hawker offered a point of clarification. He
indicated that the governor's budget had 400 employees in
it. He questioned the number of employees mentioned by
Representative Kelly. Co-Chair Meyer clarified that it
would be 4,000 employees statewide, including
municipalities.
Representative Seaton said the number is about 4,400 per-
year turnover of new employees. He clarified that changes
to SB 141 that were made on the floor and in conference
committees added complexity to the bill. Those are what are
being cleared up in HB 475.
A roll call vote was taken on the motion to ADOPT the
Conceptual Amendment to Amendment 2.
IN FAVOR: Hawker, Joule, Kerttula, Moses
OPPOSED: Foster, Holm, Kelly, Stoltze, Wehyrauch, Meyer,
Chenault
The MOTION FAILED 4-7.
3:47:46 PM
Representative Kerttula addressed Amendment 2. She noted
that it would be responsible to work for two years more on
the bill. Representative Hawker stated strong support for
Amendment 2. It is the financially responsible and
conservative approach to properly implement the policy
decision made last year to adopt SB 141.
A roll call vote was taken on the motion to ADOPT Amendment
2.
IN FAVOR: Hawker, Joule, Kerttula, Moses
OPPOSED: Weyhrauch, Foster, Holm, Kelly, Stoltze, Meyer,
Chenault
The MOTION FAILED 4-7.
Representative Joule MOVED to ADOPT Amendment 3:
Page 2, line 15, following "AS 14.25.065.":
Insert "The maximum change in the contribution rate for
an employer from one year to the next shall be not more
than five percentage points, as actuarially calculated,
whether the change is an increase or a decrease."
Page 3, line 1:
Delete "The"
Insert "Subject to the limitation on maximum change
from one year to the next under (a) of this section,
the"
Page 16, line 2, following "section.":
Insert "The maximum change in the contribution rate for
an employer from one year to the next shall be not more
than five percentage points, as actuarially calculated,
whether the change is an increase or a decrease."
Page 17, line 9:
Delete "The"
Insert "Subject to the limitation on maximum change
from one year to the next under AS 39.35.250(a), the"
Co-Chair Meyer OBJECTED for discussion purposes.
3:50:15 PM
ALLISON ELGEE, STAFF, REPRESENTATIVE JOULE, addressed
Amendment 3. She related that this amendment would limit
the Alaska Retirement Management Board to rate adjustments
for the retirement systems in any one year to 5 percent,
both up and down. Previously, the PERS Board adopted a
regulation that limited those rate adjustments to 5 percent
per year, and that has been the experience for the last
several years. This would put into statute what has in the
past been effective regulation.
Representative Hawker spoke against Amendment 3. He related
that the policy call in SB 141 was to bankrupt the old plan,
trigger a public bailout, and put a new plan in place to
pick up where the old plan left off. It would be
irresponsible not to start funding it as soon as possible.
This amendment would dig the hole deeper.
3:52:36 PM
Representative Joule said he raised the issue because there
has been no discussion on the amount of money that would be
involved. There is $40 million in TRS alone. He wanted to
draw attention to the fear that the schools and cities will
carry the brunt of the cost.
Ms. Elgee said that based on the underfunding just for the
school districts, the amount is approximately an additional
$200 million to the foundation formula to cover the cost,
were it to go to the full actuarial calculated cost in 2008.
Representative Joule asked if that is a check the
legislature is willing to write next year.
3:54:36 PM
Representative Seaton appreciated the mention of the
unfunded liability. He stated that the purpose of the bill
is for a long-term plan. The amendment would delay the
money for the unfunded liability. He agreed with
Representative Hawker.
Representative Joule stated that this is not going to be a
liability. Representative Seaton drew attention to
education funding with the 5 percent increase, and no lack
of funding for TRS. He stated full commitment to fund TRS,
as it is included in the formula.
Representative Weyhrauch recalled that this was an amendment
offered last year to HB 141. He concurred with
Representative Hawker's view that "we are going to have to
pay for the problem". He opined that Amendment 3 is not the
correct solution.
3:57:58 PM
Representative Kelly said that we should resist going the
route of Amendment 3. It will take work by the state, the
cities, and the schools to solve the problem. BUCK provides
actuarial services to many state and local government
pension systems. This is the first time BUCK has had a
client that was prohibited from increasing deductibles, full
pays, and prescription drugs for its retirees. In normal
circumstances, there would be some way to have assistance
from those being served. He spoke against the amendment,
but said it is in the right spirit.
Representative Joule said he raised this idea because it
involves real dollar figures. He urged caution in the
future with the respect to school districts. He WITHDREW
Amendment 3.
4:01:59 PM
Representative Weyhrauch MOVED to ADOPT Amendment 4:
Page 4, line 8:
Delete "AS 14.25.485 and 14.25.487"
Insert "AS 14.25.310 - 14.25.590"
Page 9, lines 21 - 23:
Delete "[BENEFICIARIES] based on the deceased member's
gross monthly compensation at the time of occupational
death
[(1)"
Insert "[BENEFICIARIES BASED ON THE DECEASED MEMBER'S
GROSS MONTHLY COMPENSATION AT THE TIME OF OCCUPATIONAL
DEATH
(1)"
Page 19, lines 12 - 13:
Delete "AS 39.35.890 and 39.35.892"
Insert "AS 39.35.700 - 39.35.990"
Page 25, lines 26 - 28:
Delete "[BENEFICIARIES] based on the deceased
employee's gross monthly compensation at the time of
occupational death
[(1)"
Insert "[BENEFICIARIES BASED ON THE DECEASED EMPLOYEE'S
GROSS MONTHLY COMPENSATION AT THE TIME OF THE
OCCUPATIONAL DEATH
(1)"
Representative Weyhrauch related that on pages 4 and 9 of HB
475, the statutory reference has been changed to include all
disability and death benefits. He explained that without
the change it is too narrow. This amendment would allow
employer contributions to be collected in order to fund
death and disability benefits. The second part of the
amendment, on pages 19 and 25, clarifies that the
calculation of the employer contribution is for survivor
pension benefits, as well. An unnecessary reference is also
deleted.
4:03:26 PM
Representative Seaton said Amendment 4 is a clean-up
amendment and not a policy call.
Representative Kerttula asked how it was figured out without
the amendment, and how it is changed with the amendment.
4:04:36 PM
KATIE SHOWS, STAFF, REPRESENTATIVE PAUL SEATON, explained
that with the amendment, the employer contribution rate for
death and disability benefits would be calculated in the
same manner. It provides a shorter mechanism to get to that
point. In Section 55 for PERS, and in Section 16 for TRS,
the benefit formula is laid out, which takes 13 percent of
the deceased member's gross monthly salary at the time of
death and multiplies it by the number of years until that
member would have reached normal retirement. That figure is
then actuarially calculated for a percentage of contribution
that the employer will have to make annually. It does not
change the way that the benefit is calculated.
Co-Chair Meyer WITHDREW his objection.
Representative Hawker OBJECTED to the motion to adopt
Amendment 4. He noted that he has been repeatedly told that
the bill needs no changes. He asked what else should be
changed.
Co-Chair Meyer noted that the sponsor is in favor of
Amendment 4.
A roll call vote was taken on the motion to ADOPT Amendment
4.
IN FAVOR: Holm, Joule, Kelly, Stoltze, Weyhrauch, Foster,
Meyer
OPPOSED: Hawker, Kerttula, Moses
The MOTION PASSED 7-3.
4:08:06 PM
Representative Foster MOVED to REPORT CSHB 475 (FIN) out of
committee with individual recommendations and the
accompanying fiscal note.
Representative Weyhrauch OBJECTED.
4:08:38 PM
At ease.
4:10:08 PM
A roll call vote was taken on the motion to move HB 475 out
of Committee.
IN FAVOR: Holm, Kelly, Stoltze, Foster, Hawker, Meyer,
Chenault
OPPOSED: Joule, Kerttula, Moses, Weyhrauch
The motion passed 7-4.
CSHB 475 (FIN) was REPORTED out of Committee with a "no
recommendation" and with a new zero fiscal note by the
Department of Administration.
HOUSE BILL NO. 29
"An Act relating to health care insurance and to the
Comprehensive Health Insurance Association; and
providing for an effective date."
HB 29 was scheduled but not heard.
CS FOR SENATE BILL NO. 55(FIN)
"An Act instructing the commissioner of natural
resources to issue a patent for the remaining interest
in certain state land to the owner of the agricultural
rights to that land."
CSSB 55(FIN) was scheduled but not heard.
CS FOR SENATE BILL NO. 200(JUD) am
"An Act relating to defense of self, other persons,
property, or services."
CSSB 200(JUD) am was scheduled but not heard.
ADJOURNMENT
The meeting was adjourned at 4:11 PM.
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