Legislature(2007 - 2008)HOUSE FINANCE 519
05/11/2007 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB84 | |
| SB125 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 84 | ||
| = | SB 125 | ||
HOUSE FINANCE COMMITTEE
May 11, 2007
8:51 A.M.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 8:51:22 AM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Richard Foster
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas Jr.
MEMBERS ABSENT
None
ALSO PRESENT
Suzanne Cunningham, Staff, Representative Meyer; Diane
Casto, Section Manager, Prevention and Early Intervention
Section, Division of Behavior Health, Department of Health
and Social Services; Cindy Drinkwater, Assistant Attorney
General, Commercial/Fair Business Section, Civil Division
(Anchorage), Department of Law; Annette Kreitzer,
Commissioner, Department of Administration; Virginia Ragle,
Assistant Attorney General, Labor and State Affairs,
Department of Law; Kevin Brooks, Deputy Commissioner,
Department of Administration.
PRESENT VIA TELECONFERENCE
None
SUMMARY
CS SB 84(JUD)
An Act relating to the testing and packaging of
cigarettes to be sold, offered for sale, or
possessed in this state; and providing for an
effective date.
HCS CS SB 84 (FIN) was reported out of Committee
with a "" recommendation and with a new fiscal
note by the Department of Health and Social
Services, fiscal note #4 by the Department of
Public Safety and a new fiscal note by the
Department of Revenue.
HCS CSSB 84 (FIN) was REPORTED out of Committee
with a "do pass" recommendation and with a
previously published fiscal impact note from the
Department of Public Safety and two new fiscal
notes: DHSS #5 and REV #6.
CS FOR SENATE BILL NO. 125(FIN)
An Act relating to the accounting and payment of
contributions under the retirement plans of the
Public Employees' Retirement System of Alaska and
the Teachers' Retirement System, to calculations
of contributions under those retirement plans, and
to participation in, and termination of and
amendments to participation in, the defined
benefit plans of those systems; relating to
employer contributions to the health reimbursement
arrangement plan; making conforming amendments;
and providing for an effective date.
HCS CS SB 125 (FIN) was reported out of Committee
with a "do pass" recommendation and with
indeterminate note #1 by the Department of
Administration and fiscal note #2 by the
Department of Administration.
CS FOR SENATE BILL NO. 84(JUD)
An Act relating to the testing and packaging of
cigarettes to be sold, offered for sale, or possessed
in this state; and providing for an effective date.
Vice Chair Stoltze MOVED to ADOPT work draft #25-LS0596\N,
Bannister, 5/9/07. There being NO OBJECTION, it was
adopted.
SUZANNE CUNNINGHAM, STAFF, REPRESENTATIVE MEYER, discussed
the new provisions of HCS CSSB 84 (FIN). The Department of
Health and Social Services (DHSS) will be required to notify
tobacco endorsement holders when DHSS investigators cite
employees of the endorsement holder for selling tobacco
products to a minor. Notification can either be hand
delivered or postmarked no later than five days after the
citation is issued. Currently, endorsement holders become
aware of the violation when they receive a suspension
notice. The committee substitute (CS) expands the criteria
that can be considered in a hearing pertaining to an
endorsement holder's license suspension for a violation of
selling tobacco products to a minor. The new criteria are:
Did the endorsement holder adopt or enforce education,
compliance and a disciplinary program for agents and
employees? Did the endorsement holder overcome the
presumption that an employee negligently sold tobacco
products to a minor? Were there other violations of selling
tobacco to a minor at the endorsement holder's locations
within five years of the suspension hearing? Did the
endorsement holder engage in conduct that was likely to
result in the sale of tobacco to a minor?
The committee substitute allows the suspension to be
mitigated or aggravated based on the new criteria presented
in the committee substitute pertaining to an endorsement
holder's license suspension.
Ms. Cunningham observed that the department could reduce a
first offense suspension by ten days and a second offense by
20 days. The CS provides that a suspension can only be
reduced once in a twelve month time period. A second
suspension cannot be reduced if it occurs within a twelve
month period of the first violation. The CS sets out the
endorsement holder's responsibilities in regard to training
and education programs. Evidence submitted in a suspension
hearing on a license suspension must show that a written
policy was adopted and enforced, employees were informed of
state laws and penalties and training was conducted on state
laws and compliance. Each employee is required to sign a
form stating that they have been informed and understand the
written policy adopted by the employer. The employer must
determine that the employee has sufficient skills and
experience to apply with the written policy in state law.
Agents and employees must verify age before selling tobacco
products and monitor the compliance of agents and employees
of the written policy. The CS prohibits an employee younger
than 19 years of age from selling tobacco products, since it
is an age restricted product similar to alcohol.
8:55:14 AM
Co-Chair Meyer MOVED to ADOPT Amendment #1. (Copy on File).
To Page 11, after line 25, insert new Section:
Ms. Cunningham explained that discussion on the fiscal notes
noted that the Department of Revenue plans to use receipt
supported services that are collected from the certification
fees for self extinguishing cigarettes. Clarification
language is needed in statute. A new paragraph was added
under the definition of program receipts: (82) fees
collected under AS 18.74.080.
8:56:39 AM
There being NO OBJECTION, it was so ordered.
Representative Gara WITHDREW Amendments 2 and 3.
8:58:28 AM
Co-Chair Meyer questioned if concerns regarding due process
have been resolved.
DIANE CASTO, SECTION MANAGER, PREVENTION AND EARLY
INTERVENTION SECTION, DIVISION OF BEHAVIOR HEALTH,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES felt that the due
process issue had been resolved. She noted that retailers
are provided an opportunity for hearings and to if certain
stnd
criteria are laid out can have their 1 and 2 violations
reduced by an administrative law judge.
8:58:47 AM
Representative Gara was comfortable with the Department of
Law's interpretation, but noted that the issue may be
decided in the Alaska Supreme Court someday.
8:59:30 AM
CINDY DRINKWATER, ASSISTANT ATTORNEY GENERAL,
COMMERCIAL/FAIR BUSINESS SECTION, CIVIL DIVISION
(ANCHORAGE), DEPARTMENT OF LAW, spoke to the rebuttalble
presumption provision. The presumption is that citation,
which resulted in a conviction, is proof of the underlying
fact that the sale occurred. However, the endorsement
holder can provide evidence that there was not a negligent
sale of tobacco and if they overcame the presumption then
they would not be subject to a suspension period.
9:03:52 AM
Ms. Drinkwater explained that the employer was not
negligent. The endorsement holder would put on that
evidence.
Co-Chair Chenault referred to a case in Fairbanks where a
disgruntled employee sold tobacco products to a minor
regardless of the safeguards of the employer. The
employer's recourse under the bill would be a ten day
suspension instead of a 20 day suspension.
9:05:48 AM
Co-Chair Meyer noted that HB 187, which was introduced to
address due process, was merged into CSSB 84 (FIN). Public
testimony was previously taken on both bills.
9:07:04 AM
Representative Hawker noted concern that the proposed
amendments do not correct the constitutional deficiencies
identified by the Court and suggested that the issue would
be decided in the courts.
9:08:40 AM
Representative Foster MOVED to REPORT HCS CS SB 87 (FIN)
out of Committee with individual recommendations and with
the accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
HCS CS SB 84 (FIN) was reported out of Committee with a ""
recommendation and with a new fiscal note by the Department
of Health and Social Services, fiscal note #4 by the
Department of Public Safety and a new fiscal note by the
Department of Revenue.
AT EASE: 9:09:28 AM
RECONVENE: 9:11:02 AM
Co-Chair Meyer clarified a new fiscal note from the
Department of Revenue, dated 5/10/07, was attached to HCS
CSSB 84 (FIN), which shows the receipt support services.
HCS CSSB 84 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a previously published fiscal
impact note from the Department of Public Safety and two
new fiscal notes: DHSS #5 and REV #6.
CS FOR SENATE BILL NO. 125(FIN)
An Act relating to the accounting and payment of
contributions under the retirement plans of the Public
Employees' Retirement System of Alaska and the
Teachers' Retirement System, to calculations of
contributions under those retirement plans, and to
participation in, and termination of and amendments to
participation in, the defined benefit plans of those
systems; relating to employer contributions to the
health reimbursement arrangement plan; making
conforming amendments; and providing for an effective
date.
ANNETTE KREITZER, COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, observed that Amendment #2 would speak to
concerns by the Department of Law.
Co-Chair Meyer MOVED to ADOPT Amendment #2. Vice-Chair
Stoltze OBJECTED.
Michael Barnhill, Assistant Attorney General, Department of
Law, explained that the HCS CSSB 125 (FIN) provides new
sections for additional state contributions to the PERS/TRS
systems. Review of these sections with outside counsel
uncovered concern to which a statute in AS 09.17.070 might
be used to characterize payments as offsets to any eventual
recovery, if there should be a recovery against the state's
actuarial: Mercer. The purpose of Amendment #2 is to
clarify that AS 09.17.070 will not apply to offset against
any recovery against Mercer based on additional state
contributions under the bill.
In response to a question by Representative Gara, Mr.
Barnhill explained that the department intends to pursue
litigation and funding for the litigation. No funding has
been provided to date.
9:15:04 AM
Vice-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment was adopted.
Co-Chair Meyer MOVED to adopt New Amendment #3. Vice-Chair
Stoltze OBJECTED. Ms. Kreitzer explained the amendment.
She noted the backup included with the amendment.
VIRGINIA RAGLE, ASSISTANT ATTORNEY GENERAL, LABOR AND STATE
AFFAIRS, DEPARTMENT OF LAW, explained that the technical
amendments were introduced to make sure that the two bills
conform.
9:17:01 AM
Ms. Ragle observed that HCS CSSB 125 (FIN) contains all the
substantive provisions of SB 123 except the requirement for
employers to separately compute medical retiree benefits.
The benefits would be deposited into the new employee health
trust established under AS 39.30.097(a). This provision is
important to assure tax compliance.
Commissioner Kreitzer provided members with backup to
Amendment #3 (copy on file), which further explained the
amendment would supersede SB 123 amendments.
9:18:57 AM
Ms. Ragle and Commissioner Kreitzer reviewed amendments to
the Revisor's Instructions. Ms. Ragle explained that the
Revisor Instructions would resurrect repealed sections.
There being NO OBJECTION, it was so ordered.
9:22:41 AM
Representative Gara originally understood that the PERS
rate of 22% and the TRS rate of 12% would continue into the
future. He concluded that these numbers could increase
according to investment performance.
9:24:06 AM
KEVIN BROOKS, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, clarified that the rates are set and fixed
in Statute at 22% and 12.56%. He acknowledged that there
is a remote chance the rates could increase if the normal
costs exceed the rates in statute, since statutes state
"the greater of". He did not think the normal costs would
grow to the rate set in statute. The difference between the
normal costs and 22% for PERS is intended to offset past
service costs. It would take a dramatic shift of
assumptions and would grow overtime. It would take action
by the Legislature to change the rate.
9:25:52 AM
Representative Foster MOVED to REPORT HCS CS SB 125 (FIN)
out of Committee with individual recommendations and with
the accompanying fiscal notes. There being NO OBJECTION, it
was so ordered.
HCS CS SB 125 (FIN) was reported out of Committee with a "a
"do pass" recommendation and with indeterminate note #1 by
the Department of Administration and fiscal note #2 by the
Department of Administration.
ADJOURNMENT
The meeting was adjourned at 9:27:31 AM
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