Legislature(2015 - 2016)HOUSE FINANCE 519

04/06/2016 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 4/7/16 at 7:30 a.m. --
+ HB 47 PERS CONTRIBUTIONS BY MUNICIPALITIES TELECONFERENCED
Moved CSHB 47(FIN) Out of Committee
+= SB 124 EXTEND SUNSET ON AK COMMISSION ON AGING TELECONFERENCED
Moved SB 124 Out of Committee
+ HB 241 NONRESIDENT SURCHARGE COMMERCIAL FISHING TELECONFERENCED
<Bill Hearing Canceled>
+ HCR 4 US COUNTERMAND CONVENTION DELEGATES TELECONFERENCED
Moved CSHCR 4(STA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ HB 188 PERSON W/DISABILITY SAVINGS ACCOUNTS TELECONFERENCED
Heard & Held
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 6, 2016                                                                                            
                         8:49 a.m.                                                                                              
                                                                                                                                
8:49:27 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Thompson   called  the  House   Finance  Committee                                                                    
meeting to order at 8:49 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Dan Saddler, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lynn Gattis                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Lance Pruitt                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator Bill  Stoltze, Sponsor; Representative  Neil Foster,                                                                    
Sponsor,    House    District;    Paul    LaBolle,    Staff,                                                                    
Representative Neil  Foster; Kevin Worley, CEO,  Division of                                                                    
Retirements  and  Benefits,  Department  of  Administration;                                                                    
Kathy  Wasserman,   Executive  Director,   Alaska  Municipal                                                                    
League;   Brodie  Anderson,   Staff,  Representative   Steve                                                                    
Thompson;   Kathie  Wasserman,   Alaska  Municipal   League,                                                                    
Anchorage;  Kathy Lea,  Chief Pension  Officer, Division  of                                                                    
Retirement and  Benefits, Department of  Administration; Kim                                                                    
Skipper,  Staff, Representative  Dan  Saddler; Jeff  Jessee,                                                                    
Chief   Executive  Officer,   Alaska  Mental   Health  Trust                                                                    
Authority; Sara  Kuecim, Self, Juneau; Pam  Leary, Director,                                                                    
Division of Treasury,  Department of Revenue; Representative                                                                    
Shelley    Hughes,   Sponsor;    Stuart   Krueger,    Staff,                                                                    
Representative Shelley Hughes.                                                                                                  
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Shanda Huntington, City of Galena,  Galena; Lori King, Self,                                                                    
Juneau;  Stuart  Spielman,  Autism  Speaks,  Washington  DC;                                                                    
Patrick  Reinhart, Governor's  Council  on Disabilities  and                                                                    
Special  Ed, Anchorage;  Mike  Coons, Legislative  Director,                                                                    
Citizens Initiatives.                                                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 47     PERS CONTRIBUTIONS BY MUNICIPALITIES                                                                                  
                                                                                                                                
          CSHB 47  (FIN) was REPORTED out  of committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          fiscal   impact   note   by  the   Department   of                                                                    
          Administration.                                                                                                       
                                                                                                                                
HB 188    PERSON W/DISABILITY SAVINGS ACCOUNTS                                                                                  
                                                                                                                                
          HB  188  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HCR 4     US COUNTERMAND CONVENTION DELEGATES                                                                                   
                                                                                                                                
          CSHCR 4  (STA) was REPORTED out  of committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          indeterminate fiscal note by the Legislature.                                                                         
                                                                                                                                
SB 124    EXTEND SUNSET ON AK COMMISSION ON AGING                                                                               
                                                                                                                                
          SB 124  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation and  with a  previous fiscal                                                                    
          impact note: FN3 (SFC for DHS).                                                                                       
                                                                                                                                
SENATE BILL NO. 124                                                                                                           
                                                                                                                                
     "An Act extending the termination date of the Alaska                                                                       
     Commission on Aging; and providing for an effective                                                                        
     date."                                                                                                                     
                                                                                                                                
8:50:48 AM                                                                                                                    
                                                                                                                                
SENATOR  BILL  STOLTZE,  SPONSOR,  remarked  that  the  only                                                                    
outstanding conversation  related to the bill  was about the                                                                    
fiscal  notes.  He  noted  the  reduction  of  one,  with  a                                                                    
recommendation of two  position cuts. He stated  that it was                                                                    
a  determination  by  the administration  in  the  following                                                                    
fiscal year.  He shared that the  commission had recommended                                                                    
the sunset. He  felt that there was broad  public support of                                                                    
the bill, and a strong constituency.                                                                                            
                                                                                                                                
Co-Chair  Thompson   appreciated  the  bill   being  brought                                                                    
forward.                                                                                                                        
                                                                                                                                
8:52:07 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
8:53:07 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative Gara  referred to  the fiscal note.  He asked                                                                    
about the  positions being  deleted. Senator  Stoltze stated                                                                    
he  was not  at the  epicenter  of the  finance. He  thought                                                                    
there  was a  suggestion  for deeper  cuts.  He thought  the                                                                    
deletion of  2 positions presented  a stark reality.  He did                                                                    
not  think   having  a  place  holder   for  discussion  was                                                                    
necessary. He  thought the legislature could  use a reminder                                                                    
of the                                                                                                                          
                                                                                                                                
Co-Chair  Thompson  reiterated  that the  bill  limited  one                                                                    
position, and  shared that the following  legislatures could                                                                    
make more reductions.                                                                                                           
                                                                                                                                
Co-Chair Neuman  agreed with Senator Stoltze  that cuts were                                                                    
necessary.  He  thought the  fiscal  note  should remain  as                                                                    
written.                                                                                                                        
                                                                                                                                
8:57:00 AM                                                                                                                    
                                                                                                                                
Representative Guttenberg  emphasized that the  reduction in                                                                    
the note  reflected a 50  percent reduction of staff  over 2                                                                    
years.  He  spoke  to  the  fact  that  the  people  on  the                                                                    
commission  were   overachievers  and  was   concerned  with                                                                    
placing too much  of a burden. He thought the  cuts were too                                                                    
steep.  He  suggested  coming  back  in  a  year's  time  to                                                                    
reevaluate.                                                                                                                     
                                                                                                                                
Representative  Kawasaki asked  about  moving  to amend  the                                                                    
fiscal note. Co-Chair Thompson replied  that he did not want                                                                    
to amend the fiscal note.                                                                                                       
                                                                                                                                
Representative Kawasaki  pointed out  that the  report (copy                                                                    
on file) from the Commission  on Aging spoke specifically to                                                                    
state implementation of the plan.  He stressed that the work                                                                    
on the  plan began in  FY 14, which  was two years  ahead of                                                                    
the work. It was anticipated  that the commission would work                                                                    
on  the   revised  plan  for   submission  to   the  federal                                                                    
government.                                                                                                                     
                                                                                                                                
Representative Gara  thought the  bill was too  important to                                                                    
hold up the commission. She thought  it would be best to get                                                                    
the bill passed  and ready to move forward to  get it to the                                                                    
floor for a vote.                                                                                                               
                                                                                                                                
Vice-Chair Saddler  relayed that the significant  decline in                                                                    
revenue was not a surprise to the commission.                                                                                   
                                                                                                                                
9:03:23 AM                                                                                                                    
                                                                                                                                
Representative  Gara  referred to  the  second  page of  the                                                                    
fiscal note. He  read a portion of the fiscal  note memo. He                                                                    
indicated  that the  reduction would  diminish the  agency's                                                                    
ability to  fulfill its statutory responsibilities.  He felt                                                                    
that  the  committee  should  only  cut  one  position,  and                                                                    
evaluate  whether or  not  to cut  another  position in  the                                                                    
future.                                                                                                                         
                                                                                                                                
Representative Gara  MOVED to  ADOPT conceptual  Amendment 1                                                                    
to the fiscal note:                                                                                                             
                                                                                                                                
     The fiscal note would only delete one position in the                                                                      
     current year, without the statement of intent that a                                                                       
     second position be deleting the following year.                                                                            
                                                                                                                                
Representative Wilson OBJECTED  for discussion. She remarked                                                                    
that the state  plan was written, and  updated with changes.                                                                    
She felt that the commission  would continue to progress and                                                                    
make  changes.   She  appreciated   the  reduction   of  one                                                                    
position, and stressed that there  would be an evaluation of                                                                    
the impact of that reduction.                                                                                                   
                                                                                                                                
Representative Guttenberg reemphasized  his position that it                                                                    
would be  easier to  keep the  third position  currently and                                                                    
cut next year. He was concerned of the                                                                                          
                                                                                                                                
Representative Munoz  remarked that  it appeared  that there                                                                    
were three  positions reduced, because $93,000  was cut from                                                                    
FY 17 and an additional $200,000 in FY 18.                                                                                      
                                                                                                                                
9:07:32 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Saddler emphasized  that  the finance  committee                                                                    
made spending and reduction decisions.                                                                                          
                                                                                                                                
Senator Stoltze was not anticipating  a discussion about the                                                                    
fiscal  note. He  relayed his  conversations with  the other                                                                    
body.  He   relayed  that  there   had  been  an   array  of                                                                    
discussions.                                                                                                                    
                                                                                                                                
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg, Kawasaki, Munoz, Edgmon, Gara                                                                             
OPPOSED: Gattis, Pruitt, Saddler, Wilson, Neuman, Thompson                                                                      
                                                                                                                                
The MOTION  FAILED (5/6). Conceptual  Amendment 1  failed to                                                                    
be adopted.                                                                                                                     
                                                                                                                                
Vice-Chair Saddler reviewed the fiscal note.                                                                                    
                                                                                                                                
Co-Chair  Neuman MOVED  to REPORT  SB 124  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
SB  124 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation and  with a previous fiscal  impact note: FN3                                                                    
(SFC for DHS).                                                                                                                  
                                                                                                                                
9:13:36 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:16:36 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 47                                                                                                             
                                                                                                                                
     "An Act  requiring each municipality with  a population                                                                    
     that  decreased by  more than  25 percent  between 2000                                                                    
     and  2010  that  participates in  the  defined  benefit                                                                    
     retirement  plan of  the  Public Employees'  Retirement                                                                    
     System of Alaska to contribute  to the system an amount                                                                    
     calculated  by applying  a rate  of 22  percent of  the                                                                    
     total of all base salaries  paid by the municipality to                                                                    
     employees of  the municipality  who are  active members                                                                    
     of  the system  during a  payroll period;  reducing the                                                                    
     rate  of  interest payable  by  a  municipality with  a                                                                    
     population  that  decreased  by more  than  25  percent                                                                    
     between   2000  and   2010   that   is  delinquent   in                                                                    
     transmitting  employee  and employer  contributions  to                                                                    
     the  defined  benefit  retirement plan  of  the  Public                                                                    
     Employees'   Retirement   System  of   Alaska;   giving                                                                    
     retrospective effect  to the substantive  provisions of                                                                    
     the Act; and providing for an effective date."                                                                             
                                                                                                                                
9:16:41 AM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute for HB 47 (FIN),  Work Draft (29-LS0285\I). There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Co-Chair  Thompson  queried  the changes  in  the  committee                                                                    
substitute.                                                                                                                     
                                                                                                                                
BRODIE  ANDERSON,  STAFF,   REPRESENTATIVE  STEVE  THOMPSON,                                                                    
relayed the changes to the bill.  He stated that there was a                                                                    
title  change to  conform  to the  changes  made within  the                                                                    
bill. He  shared that the  bill added  a new Section  1, and                                                                    
the sponsor  will explain the  new section. He  relayed that                                                                    
the CS  deleted the old  Section 3, which had  a retroactive                                                                    
clause. He  stated that the  CS added  a new Section  4, and                                                                    
the sponsor was prepared to explain that new section.                                                                           
                                                                                                                                
REPRESENTATIVE  NEIL FOSTER,  SPONSOR,  indicated his  staff                                                                    
would be presenting the bill.                                                                                                   
                                                                                                                                
PAUL  LABOLLE, STAFF,  REPRESENTATIVE NEIL  FOSTER, reviewed                                                                    
the bill.  He looked at  Section 1,  page 1, line  12, which                                                                    
was  the   new  subsection  under  39.35.610   allowing  the                                                                    
administrator to  determine the  rate of  assessed interest.                                                                    
He stated that  Section 2 was the old Section  1. He relayed                                                                    
that Section 3 added a  reference to the new subsection that                                                                    
was created in  Section 4. He shared that  Section 4 allowed                                                                    
for  the  administrator   of  Public  Employees'  Retirement                                                                    
System (PERS)  to assess an  interest rate at a  lower value                                                                    
than otherwise dictated in the  section, if the employer was                                                                    
a municipality  who had lost  more than 25 percent  of their                                                                    
population between the 2000 and 2010 census.                                                                                    
                                                                                                                                
Representative  Munoz  queried  the  issue  of  a  community                                                                    
regaining  its population.  Mr.  Labolle  responded that  it                                                                    
would have to be done through additional legislation.                                                                           
                                                                                                                                
9:20:36 AM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman  asked  about   the  migration  from  rural                                                                    
communities. Representative Foster  responded that, overall,                                                                    
there were some small migration  numbers from rural to urban                                                                    
areas. He remarked that Galena  had a major migration out of                                                                    
the area, because of the relocation of the military base.                                                                       
                                                                                                                                
Mr.  Labolle agreed  that the  military  base was  relocated                                                                    
from Galena. He stressed  that the legislation was specified                                                                    
to those  communities who lost  population from the  2000 to                                                                    
2010 census. Therefore, future population  loss would not be                                                                    
affected by the confines of  the legislation. He pointed out                                                                    
that the census affected  Galena, Pelican, Atka, St. George,                                                                    
and Anderson. He explained that  St. George and Anderson did                                                                    
not have  any PERS employees,  so they were not  affected by                                                                    
the legislation.  He deferred to  the department  to explain                                                                    
why Pelican and Atka were not affected by the legislation.                                                                      
                                                                                                                                
Representative  Guttenberg noted  that  the bill's  language                                                                    
was permissive,  and not required.  He wondered if  that was                                                                    
the intent  of the legislation.  Mr. Labolle replied  in the                                                                    
affirmative. He  furthered that the  intent of the  bill was                                                                    
to allow for  negotiation. The original version  of the bill                                                                    
had   a  retroactive   effective  date,   and  changed   the                                                                    
delinquency  rate in  statute for  affected communities.  It                                                                    
was determined that there should  be negotiation between the                                                                    
administrator of the program and the affected employer.                                                                         
                                                                                                                                
Representative  Guttenberg  wondered  how  the  2020  census                                                                    
would  affect  Anderson  and the  legislation.  Mr.  Labolle                                                                    
replied that  the legislation was  a "floor not  a ceiling."                                                                    
He explained  that the current  payments were 22  percent of                                                                    
the  current  salaries or  22  percent  of the  2008  floor,                                                                    
whichever is greater. He explained  that a growing community                                                                    
with growing employees, the community  would pay the greater                                                                    
of the  floor. Furthermore, Anderson  would not need  to pay                                                                    
the 22 percent of current employee salaries.                                                                                    
                                                                                                                                
9:25:28 AM                                                                                                                    
                                                                                                                                
Representative Gara looked at page  2 of the bill, and noted                                                                    
the two possible calculations for  how much the municipality                                                                    
should  pay  for  the  PERS employees:  the  greater  of  22                                                                    
percent of  the number of  current employees; or  the number                                                                    
of  employees  in   2008.  He  remarked  that   he  did  not                                                                    
understand  why the  2008 year  was  specified. He  surmised                                                                    
that  if the  number of  current employees  was larger  than                                                                    
what  was  in the  new  section,  then  the payment  was  22                                                                    
percent  of the  number  of current  employees. Mr.  Labolle                                                                    
responded in the affirmative. He  explained that there was a                                                                    
bill  in 2008,  which  took the  failing  PERS systems,  and                                                                    
pooled them  into one state  system. He remarked  that there                                                                    
was a concern  that employers could lay  off employees, hire                                                                    
contract employees,  and therefore  only pay the  22 percent                                                                    
of  the current  employees.  Thereby  leaving the  remaining                                                                    
outstanding liability  on the state.  The floor  was created                                                                    
to prevent that possibility.                                                                                                    
                                                                                                                                
Representative  Kawasaki asked  for Mr.  Labolle to  explain                                                                    
the  retroactivity.   Mr.  Labolle   thought  Representative                                                                    
Kawasaki was looking at a previous version of the bill.                                                                         
                                                                                                                                
Representative   Kawasaki    asked   if   there    was   not                                                                    
retroactivity.  Mr.  Labolle  confirmed that  there  was  no                                                                    
retroactivity in the bill.                                                                                                      
                                                                                                                                
Co-Chair Thompson OPENED public testimony.                                                                                      
                                                                                                                                
9:28:35 AM                                                                                                                    
                                                                                                                                
SHANDA   HUNTINGTON,    CITY   OF   GALENA,    GALENA   (via                                                                    
teleconference), spoke in favor of  the policy of imposing a                                                                    
floor. She remarked  that HB 47 did not  change PERS policy.                                                                    
She provided  some history. Galena declined  its activity in                                                                    
recent years,  and city services plummeted.  She pointed out                                                                    
that  there  were  17  employees  in  2012.  The  difference                                                                    
between   the   two   floors   was   significant.   Galena's                                                                    
contribution  was  significantly  high.  She  provided  some                                                                    
statistical  information regarding  PERS contributions  paid                                                                    
by Galena. She added that HB 47 was not a loophole.                                                                             
                                                                                                                                
9:36:42 AM                                                                                                                    
                                                                                                                                
KATHIE  WASSERMAN,   ALASKA  MUNICIPAL   LEAGUE,  ANCHORAGE,                                                                    
indicated  that  the League  was  in  favor  of HB  47.  She                                                                    
relayed the  difficulty of conveying to  the legislature the                                                                    
challenges.  She spoke  to her  previous  experience as  the                                                                    
mayor of Pelican.                                                                                                               
                                                                                                                                
Co-Chair Thompson CLOSED public testimony.                                                                                      
                                                                                                                                
Representative Gara  asked about the penalties.  Mr. Labolle                                                                    
replied  that previous  versions of  the bill  had penalties                                                                    
and retroactivity.                                                                                                              
                                                                                                                                
Representative Munoz asked if  the past liabilities had been                                                                    
paid.  Mr.  Labolle  believed  the  amount  was  the  amount                                                                    
unpaid, but  deferred to the  administration for  the actual                                                                    
amount.                                                                                                                         
                                                                                                                                
Representative   Munoz   asked   for   an   explanation   of                                                                    
termination  study. Mr.  Labolle replied  that the  bill did                                                                    
not address termination studies.                                                                                                
                                                                                                                                
Representative Munoz noted that  a testifier had addressed a                                                                    
termination study.                                                                                                              
                                                                                                                                
Co-Chair Thompson  agreed to  provide that  information, but                                                                    
remarked that that it did not relate to the bill.                                                                               
                                                                                                                                
Representative  Munoz disagreed,  because  a community  must                                                                    
initiate   a  termination   study  when   an  employee   was                                                                    
terminated  because  the  employer   could  not  afford  the                                                                    
employee.  It  would  affect their  finances,  because  they                                                                    
needed  to  pay  toward  the  costs.  She  wanted  a  fuller                                                                    
understanding of the requirement of a termination study.                                                                        
                                                                                                                                
9:42:04 AM                                                                                                                    
                                                                                                                                
KATHY  LEA, CHIEF  PENSION OFFICER,  DIVISION OF  RETIREMENT                                                                    
AND  BENEFITS,  DEPARTMENT  OF ADMINISTRATION,  shared  that                                                                    
there were two  types of termination costs in  PERS. One was                                                                    
with PERS  since the inception  in 1961, which was  a common                                                                    
feature in multi-employer plans.  She stated that there were                                                                    
some plans  that required the  study. She remarked  that, if                                                                    
an    employer   eliminates    coverage    for   a    group,                                                                    
classification,  or department,  the employer  must pay  the                                                                    
cost that arises from the action.  The costs were based on a                                                                    
change  in  the  behavior  of   people  who  were  close  to                                                                    
retirement.  She stressed  that the  majority of  people who                                                                    
reach normal retirement  age, did not retire  at that point.                                                                    
She pointed  out that  only 16 percent  of people  retire at                                                                    
normal  retirement   age.  She   stated  that   most  retire                                                                    
approximately four  years after the normal  retirement date,                                                                    
which  was  how  the  plan was  funded.  She  remarked  that                                                                    
terminating  a group  changed that  behavior. Therefore  the                                                                    
person who was not currently  covered by PERS would draw the                                                                    
retirement at  the first eligible  date. At that  point, the                                                                    
fund was  not fully funded.  The employer must then  pay the                                                                    
difference  in   the  funding  from  the   point  at  normal                                                                    
retirement to  the point  the plan  anticipated it  would be                                                                    
funded  at 100.  Terminating employees  who were  not vested                                                                    
then become  100 percent  vested in  the PERS  benefits. She                                                                    
explained that  in 2005,  with the  creation of  the defined                                                                    
contribution  plans,  termination  costs  were  covered  and                                                                    
again in  2008 in SB  125. She explained  that as part  of a                                                                    
change  to  a cost  share  system,  there  was a  fear  that                                                                    
employers   would   remove   groups,   classifications,   or                                                                    
departments in order to lower  their contribution amount and                                                                    
leave the accrued liability for  the other PERS employers to                                                                    
pay.  She  stated that  SB  125  created  a second  type  of                                                                    
termination  cost, which  required that  the employer  pay a                                                                    
continuing contribution for the  employees that were removed                                                                    
from coverage  based on  the unfunded  liability percentage.                                                                    
The employee would  continue to pay every  payroll until the                                                                    
unfunded  liability   was  exhausted.  She  stated   that  a                                                                    
termination  study would  not trigger,  unless  there was  a                                                                    
removal of  a department,  classification, or group  when an                                                                    
employee was looking to reduce the number of employees.                                                                         
                                                                                                                                
9:46:50 AM                                                                                                                    
                                                                                                                                
Representative  Munoz wondered  if  the smaller  communities                                                                    
that  were discussed  paid the  termination  costs. Ms.  Lea                                                                    
replied that Galena did not have a termination study.                                                                           
                                                                                                                                
Representative  Wilson surmised  that  employees were  still                                                                    
paying for employees  that were no longer  employed. Ms. Lea                                                                    
replied that, in Galena's case,  they were paying the salary                                                                    
score from 2008.                                                                                                                
                                                                                                                                
Representative  Wilson  felt  that additional  boroughs  may                                                                    
face  a similar  issue as  Galena. Ms.  Lea stated  that any                                                                    
time an  employer removed  an entire  group, classification,                                                                    
or department there would be a termination study.                                                                               
                                                                                                                                
Representative Wilson surmised that  an employer would still                                                                    
pay  into  PERS  even  without   a  termination  study.  She                                                                    
stressed that the municipalities would  still have a cost to                                                                    
the  employee,  even  though  the   employee  would  not  be                                                                    
employed. Ms.  Lea agreed that the  municipality would still                                                                    
be subject to the 2008 salary floor.                                                                                            
                                                                                                                                
Vice-Chair Saddler reviewed the fiscal notes.                                                                                   
                                                                                                                                
Co-Chair  Neuman  MOVED  to  REPORT CSHB  47  (FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Co-Chair Neuman rescinded his action.                                                                                           
                                                                                                                                
Co-Chair  Thompson commented  that the  correct fiscal  note                                                                    
had not been read.                                                                                                              
                                                                                                                                
Vice-Chair Saddler reviewed the correct fiscal note.                                                                            
                                                                                                                                
Co-Chair  Neuman  MOVED  to  REPORT CSHB  47  (FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  47 (FIN)  was REPORTED  out  of committee  with a  "do                                                                    
pass" recommendation and with one  new fiscal impact note by                                                                    
the Department of Administration.                                                                                               
                                                                                                                                
9:52:20 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:56:04 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 188                                                                                                            
                                                                                                                                
     "An  Act relating  to  financial  accounts for  persons                                                                    
     with disabilities; relating  to financial institutions;                                                                    
     relating   to   property    exemptions;   relating   to                                                                    
     securities; and providing for an effective date."                                                                          
                                                                                                                                
9:56:04 AM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute for  HB 188(FIN), Work  Draft (29-LS0787\I).There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Co-Chair  Thompson  called  Mr.  Anderson to  the  table  to                                                                    
review the bill changes.                                                                                                        
                                                                                                                                
BRODIE  ANDERSON,  STAFF,   REPRESENTATIVE  STEVE  THOMPSON,                                                                    
indicated there  were three changes  in the bill.  He looked                                                                    
at  page  1,  line  2.  The  bill  was  amended  by  adding,                                                                    
"limited" before  the word, "property."  He pointed  to page                                                                    
9, lines  2 through 8, which  amended the bill by  adding an                                                                    
exemption  (b)  to  Section  06.65.260,  an  exemption  from                                                                    
creditor claims:                                                                                                                
                                                                                                                                
     (b) If  a designated beneficiary  is default for  30 or                                                                    
     more  days  on a  payment  due  under a  child  support                                                                    
     judgment or order, the money  in the program account is                                                                    
     not  exempt  from a  claim  for  the payment  of  child                                                                    
     support that is in default.                                                                                                
                                                                                                                                
9:58:15 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
10:06:02 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Mr. Anderson pointed to reiterated  that the changes were on                                                                    
page 1, line  2; and the second change was  on page 9, lines                                                                    
2  through 8.  The third  change was  on page  11, line  20,                                                                    
which amended the  bill by adding "except as  provided in AS                                                                    
06.65.260(b)."                                                                                                                  
                                                                                                                                
Vice-Chair   Saddler,  bill   sponsor,   read  the   sponsor                                                                    
statement:                                                                                                                      
                                                                                                                                
     HB 188 seeks to help  Alaskans cope with the challenges                                                                    
     of  living with  a disability  by allowing  individuals                                                                    
     and  families  to  set up  tax-free  savings  accounts,                                                                    
     called "ABLE accounts," to  pay for education, housing,                                                                    
     transportation or other disability-related expenses.                                                                       
                                                                                                                                
     The U.S.  Congress passed the "Achieving  a Better Life                                                                    
     Experience (ABLE)  Act" in 2014, authorizing  states to                                                                    
     create special savings  accounts for disability-related                                                                    
     expenses  modeled  after  the successful  "529  college                                                                    
     savings programs," named after  the relevant section of                                                                    
     IRS code.                                                                                                                  
                                                                                                                                
     ABLE  accounts, also  known as  "529A" accounts,  allow                                                                    
     individuals   with   disabilities  to   improve   their                                                                    
     financial  security  by  using private  investments  to                                                                    
     supplement their  benefits from  insurance, employment,                                                                    
     Supplemental  Security  Income   (SSI),  Medicaid,  and                                                                    
     other  sources. Assets  held in  an ABLE  account would                                                                    
     not be counted under  means tests required for Medicaid                                                                    
     or SSI,  although SSI cash benefits  would be suspended                                                                    
     if the ABLE balance exceeded $100,000.                                                                                     
     ABLE   accounts   could   be   spent   for   education,                                                                    
     transportation,  job  training and  support,  assistive                                                                    
     technology,  health  and   wellness,  legal  and  other                                                                    
     qualified services.  Contributions would be  limited to                                                                    
     $14,000  per year,  and capped  at  $400,000. A  person                                                                    
     could have only one account.                                                                                               
                                                                                                                                
     To be eligible for an  ABLE account, a person must have                                                                    
     become  blind or  disabled before  the age  of 26.  The                                                                    
     Governor's   Council   on  Disabilities   and   Special                                                                    
     Education  estimates that  about 13,770  Alaskans -  10                                                                    
     percent of those with a  disability - might qualify for                                                                    
     ABLE accounts.                                                                                                             
                                                                                                                                
     By  empowering  Alaskans  with disabilities  and  their                                                                    
     families to build their  financial independence, HB 188                                                                    
     will help  them meet more  of their life  challenges by                                                                    
     relying  on  private  resources,  without  eroding  the                                                                    
     value of  public benefits to  which they  are entitled.                                                                    
     ABLE accounts will be important  tools for helping them                                                                    
     live full, productive lives in their communities.                                                                          
                                                                                                                                
Representative  Wilson queried  the  number  of people  that                                                                    
could qualify, who currently could not qualify.                                                                                 
                                                                                                                                
10:11:01 AM                                                                                                                   
                                                                                                                                
KIM SKIPPER, STAFF, REPRESENTATIVE  DAN SADDLER, deferred to                                                                    
Patrick Reinhart.                                                                                                               
                                                                                                                                
Representative  Wilson   wondered  why   there  was   not  a                                                                    
consideration of  those with low income  in the legislation.                                                                    
Vice-Chair  Saddler replied  that the  bill was  targeted at                                                                    
Alaskans  with disabilities.  He  stated that  the bill  was                                                                    
designed to equalize the "playing field."                                                                                       
                                                                                                                                
Ms.  Skipper  furthered  that the  bill  was  modeled  after                                                                    
federal legislation.                                                                                                            
                                                                                                                                
Representative Wilson  felt that  the bill was  too limiting                                                                    
to people  with disabilities.  She stressed that  there were                                                                    
people  that had  a  difficult time  sustaining  a job,  and                                                                    
added  that  she  did  not  know  the  exact  definition  of                                                                    
"disabled."    She    expressed    discomfort    with    the                                                                    
differentiation of  groups. Ms.  Skipper replied  that there                                                                    
was a  bill in Congress to  expand "able" to the  age of 46;                                                                    
and   allow  anyone   with  a   college  savings   plan  the                                                                    
opportunity to "roll" the plan into an able account.                                                                            
                                                                                                                                
Representative Wilson  agreed to hear more  information from                                                                    
the department.                                                                                                                 
                                                                                                                                
Representative Edgmon thanked the  sponsor for the bill, and                                                                    
expressed  support   of  the   legislation.  He   queried  a                                                                    
provision in the  bill that would allow the  state to adjust                                                                    
the  age  limit, should  Congress  increase  the age  limit.                                                                    
Vice-Chair  Saddler replied  in the  negative. He  explained                                                                    
that  the  federal  able legislation  set  some  parameters,                                                                    
because  it dealt  with the  Internal Revenue  Service (IRS)                                                                    
provisions. The age parameters were  set at 26, and the stat                                                                    
could  adapt to  that level  or  not. He  restated that  the                                                                    
limit could not be changed at the state level.                                                                                  
                                                                                                                                
Representative  Kawasaki surmised  that the  underage person                                                                    
with the account  would have a parent file  the taxes. Vice-                                                                    
Chair Saddler agreed.                                                                                                           
                                                                                                                                
Representative  Pruitt remarked  that there  was a  recently                                                                    
added  provision  which  allowed  for  a  deceased  person's                                                                    
remaining funds be used to  offset the costs of Medicaid. He                                                                    
wondered where  the program fell  in the priority  of paying                                                                    
out  of a  person's estate.  Ms. Skipper  agreed to  provide                                                                    
that information.  She remarked that  Medicaid automatically                                                                    
had  a "claw  back"  provision,  but she  did  not know  the                                                                    
priority.                                                                                                                       
                                                                                                                                
Vice-Chair Saddler furthered that  the "claw back" provision                                                                    
was  not   unique  to  the  legislation.   He  deferred  the                                                                    
Department of  Law (DOL) for more  information. He announced                                                                    
that  there was  a provision  in current  Medicaid law  that                                                                    
said  if  a  person  received  value  or  benefit  from  the                                                                    
Medicaid program during their  life, the state could recover                                                                    
as much as possible to cover the cost after death.                                                                              
                                                                                                                                
10:17:56 AM                                                                                                                   
                                                                                                                                
Representative Pruitt  wondered if the state  made effort to                                                                    
recover the cost after death.  Vice-Chair Saddler replied in                                                                    
the affirmative.                                                                                                                
                                                                                                                                
Representative Edgmon asked if the  sponsor would be open to                                                                    
a  conceptual amendment  that would  enable  the program  to                                                                    
adapt to the possible congressional changes.                                                                                    
                                                                                                                                
Vice-Chair  Saddler thought  the  bill already  incorporated                                                                    
that language.                                                                                                                  
                                                                                                                                
Ms.  Skipper  announced  that   the  proposed  language  was                                                                    
already built into the legislation.                                                                                             
                                                                                                                                
Representative  Edgmon  surmised   that  his  concerns  were                                                                    
already addressed in the bill.                                                                                                  
                                                                                                                                
10:20:14 AM                                                                                                                   
                                                                                                                                
PATRICK  REINHART, GOVERNOR'S  COUNCIL  ON DISABILITIES  AND                                                                    
SPECIAL  ED, ANCHORAGE  (via  teleconference), testified  in                                                                    
strong  support of  the bill.  He remarked  that the  effort                                                                    
began to include  all people with disabilities  of all ages,                                                                    
but  Congress chose  to limit  it  to those  people who  had                                                                    
acquired their  disability before the  age of 26.  He shared                                                                    
that there was an effort in  Congress to increase the age to                                                                    
46,  to  rollover the  529  accounts,  and to  increase  the                                                                    
deposit  amounts  based  on  poverty  level  guidelines.  He                                                                    
stated that there was bipartisan  support for those changes,                                                                    
but felt that those changes  probably would not occur in the                                                                    
current  Congress.  He   appreciated  that  the  legislation                                                                    
included language to anticipate changes.                                                                                        
                                                                                                                                
10:23:10 AM                                                                                                                   
                                                                                                                                
LORI KING,  SELF, JUNEAU (via teleconference),  supported HB
188. She  shared that  she was the  mother of  a 25-year-old                                                                    
daughter with  autism, developmental delays, and  was losing                                                                    
her sight. Her  daughter was a recipient  of social security                                                                    
and public assistance. She explained  that her daughter used                                                                    
budgeting  skills,  but  her  income  was  only  $1095.  She                                                                    
announced  that the  bills with  rent,  food, and  utilities                                                                    
totaled $1015.                                                                                                                  
                                                                                                                                
10:27:15 AM                                                                                                                   
                                                                                                                                
JEFF JESSEE,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST AUTHORITY, spoke in support  of the bill. He announced                                                                    
that the trustees  had approved funding the  fiscal note. He                                                                    
felt  that the  bill provided  a tremendous  opportunity for                                                                    
its beneficiaries.                                                                                                              
                                                                                                                                
Co-Chair Thompson OPENED public Testimony.                                                                                      
                                                                                                                                
10:29:03 AM                                                                                                                   
                                                                                                                                
SARA KUECIM, SELF,  JUNEAU, spoke in favor of  the bill. She                                                                    
felt  that the  bill would  help individuals  with supported                                                                    
employment  while  also   receiving  Medicaid  support.  She                                                                    
stressed  that  the  bill  helped   to  provide  dignity  to                                                                    
individuals with disabilities.                                                                                                  
                                                                                                                                
10:30:52 AM                                                                                                                   
                                                                                                                                
STUART   SPIELMAN,  AUTISM   SPEAKS,   WASHINGTON  DC   (via                                                                    
teleconference), spoke  in favor of  HB 188. He  shared that                                                                    
he had  been working on the  issue at the federal  level for                                                                    
over 10  years. He remarked  that his interest in  the issue                                                                    
was  not  only  professional,  because  he  has  a  severely                                                                    
autistic   21-year-old  son.   He  pointed   out  that   the                                                                    
legislation was  embraced at  the federal  level as  well as                                                                    
other  states  throughout the  country.  He  shared that  36                                                                    
states  and the  District of  Columbia had  authorized their                                                                    
own state able programs.                                                                                                        
                                                                                                                                
Co-Chair Thompson CLOSED public testimony.                                                                                      
                                                                                                                                
Vice-Chair Saddler reviewed the fiscal notes.                                                                                   
                                                                                                                                
10:33:19 AM                                                                                                                   
                                                                                                                                
Representative  Wilson felt  that  the indeterminate  fiscal                                                                    
note should  really be  a zero fiscal  note. She  noted that                                                                    
the Department  of Health and  Social Services  (DHSS) would                                                                    
be  covering  the  count,  rather  than  the  Department  of                                                                    
Revenue (DOR).                                                                                                                  
                                                                                                                                
Ms. Skipper explained  that DHSS would be  a small component                                                                    
of  the  program.  She  deferred   to  Ms.  Leary  for  more                                                                    
information.                                                                                                                    
                                                                                                                                
PAM  LEARY, DIRECTOR,  DIVISION OF  TREASURY, DEPARTMENT  OF                                                                    
REVENUE, stated that it was  an administrative issue for the                                                                    
pending  fiscal  note  from  DOR, because  the  CS  was  not                                                                    
available. She felt that there  would be similar fiscal note                                                                    
as  the  one from  the  Labor  and Commerce  Committee.  The                                                                    
fiscal note assigned $60,000 in FY  17; and $40,000 in FY 18                                                                    
from Mental Health Trust receipts.                                                                                              
                                                                                                                                
                                                                                                                                
Representative Wilson  looked at  the fiscal  note component                                                                    
number 2077,  which stated that  staff would be  required to                                                                    
monitor   and   track   accounts  and   file   claims;   and                                                                    
administration  of accounts  would involve  account deposits                                                                    
and balances to  confirm that they did  not exceed allowable                                                                    
amounts;  and monitoring  account  dispersements to  confirm                                                                    
that  they  were  qualifying expenses.  She  felt  that  the                                                                    
fiscal  note  was  not related  to  eligibility.  Ms.  Leary                                                                    
replied  that DOR  would oversee  the program,  but was  not                                                                    
sure of  the form of  oversight it would need.  She remarked                                                                    
that  there were  a  number  of states  that  had their  own                                                                    
programs, and also  a number of states that  were creating a                                                                    
consortium  program. She  explained that  it was  envisioned                                                                    
that  most  of  the  work, including  the  determination  of                                                                    
benefits,  would happen  at the  vender level.  She believed                                                                    
that  it was  a requirement  at  the federal  level for  the                                                                    
vender to be responsible for  identifying the records of the                                                                    
individuals.                                                                                                                    
                                                                                                                                
Representative Wilson  restated that the fiscal  note should                                                                    
be zero.  She felt that the  work would be done  by DOR, and                                                                    
paid out with  the receipts from payments. She  did not feel                                                                    
that DHSS should be giving  an indeterminate amount of money                                                                    
to provide service that would  not have a cost. She wondered                                                                    
whether   an  individual   must   receive  social   security                                                                    
disability benefits  to be considered "disabled",  or was it                                                                    
any type of  diagnosis before age 26.  Ms. Skipper responded                                                                    
that  a  person did  not  have  to receive  social  security                                                                    
disability  benefits,  rather   have  a  doctor  certificate                                                                    
declaring a disability.                                                                                                         
                                                                                                                                
Representative  Wilson felt  that there  would be  many more                                                                    
people added to Medicaid.                                                                                                       
                                                                                                                                
Co-Chair Neuman requested a comment from the bill sponsor.                                                                      
                                                                                                                                
Mr.  Reinhart   shared  that  he  could   not  fully  answer                                                                    
Representative  Wilson's   question.  He  stated   that  the                                                                    
eligibility  program was  more  related  to the  applicant's                                                                    
relationship with  the IRS. He  remarked that there  was not                                                                    
much eligibility determination by the state.                                                                                    
                                                                                                                                
10:39:54 AM                                                                                                                   
                                                                                                                                
Representative  Wilson shared  that her  son with  Attention                                                                    
Deficit Hyperactivity Disorder (ADHD)  would qualify for the                                                                    
program. She  stressed that  there could  be a  great fiscal                                                                    
impact   to   the  state   with   a   broad  definition   of                                                                    
"disability."                                                                                                                   
                                                                                                                                
Vice-Chair  Saddler replied  that  the savings  in the  able                                                                    
account would  be increase  tax free,  but would  not reduce                                                                    
his  taxable  income  below  the point  to  which  he  would                                                                    
qualify for Medicaid.                                                                                                           
                                                                                                                                
Representative Wilson  surmised that  the money in  the able                                                                    
account would not count against Medicaid eligibility.                                                                           
                                                                                                                                
Representative Munoz  wondered if  the means test  was $2000                                                                    
for Medicaid.  Ms. Leary stated  that it was $2000,  and was                                                                    
the social  security amount. She  explained that it  was the                                                                    
total  number  of  assets that  an  individual  could  have,                                                                    
before their benefits were reduced.                                                                                             
                                                                                                                                
10:42:33 AM                                                                                                                   
                                                                                                                                
Representative Pruitt  felt that the fund  was modeled after                                                                    
a 529 account. He shared that  a 529 accounts offered that a                                                                    
parent could  start the account,  but at  the age of  18 the                                                                    
child  could  receive  the  account   or  the  parent  could                                                                    
maintain  ownership of  the account.  Therefore, the  parent                                                                    
was  given  the  ability  to   ensure  that  the  money  was                                                                    
appropriately spent.  He remarked that, at  a certain point,                                                                    
unspent money could be rolled into  a new 529 account or the                                                                    
money became taxable. He noted  that the difference with the                                                                    
proposed legislation  is that the  owner of the  account was                                                                    
the  actual  designee.  He  queried   an  advantage  of  the                                                                    
importance to place the money in the hands of a parent.                                                                         
                                                                                                                                
Vice-Chair  Saddler asked  Representative Pruitt  to restate                                                                    
the question.                                                                                                                   
                                                                                                                                
Representative   Pruitt  felt   that  there   was  a   major                                                                    
difference in  the proposal and  a 529 account.  Ms. Skipper                                                                    
thought   that  Representative   Pruitt  was   correct.  She                                                                    
explained   that   the   account   holder   could   have   a                                                                    
representative to make the decisions.                                                                                           
                                                                                                                                
Representative Pruitt  felt that the parent  should have the                                                                    
ability to maintain some control.  He surmised that the only                                                                    
claim that could  go against the program  was child support.                                                                    
He  queried the  development of  the provision.  Ms. Skipper                                                                    
replied  that  in  any  situation   of  child  support,  the                                                                    
judgment   would  overrule.   She  explained   that  similar                                                                    
legislation   included  exemptions   from  creditor   claims                                                                    
without the  need for child  support. She furthered  that an                                                                    
individual had  asked that the specification  be included in                                                                    
the bill.                                                                                                                       
                                                                                                                                
10:47:18 AM                                                                                                                   
                                                                                                                                
Representative Pruitt remarked that  the provision was not a                                                                    
federal policy. Ms. Skipper replied in the affirmative.                                                                         
                                                                                                                                
Representative Pruitt  stressed that the $100,000  could not                                                                    
be used to make restitution.  Ms. Skipper responded that the                                                                    
account  could  technically  have  a  maximum  of  $400,000,                                                                    
because of the college  savings plan contribution limit. She                                                                    
furthered that  the money was  more fluid, because  it would                                                                    
be used for expenses that were not covered by Medicaid.                                                                         
                                                                                                                                
Representative Pruitt stressed that  the focus should not be                                                                    
on what  would likely happen,  rather there needed to  be an                                                                    
examination of  all the  potential occurrences.  He remarked                                                                    
that  the  bill  did  not   specifically  mention  that  the                                                                    
individual was the  only person that could  deposit into the                                                                    
account. Ms.  Skipper replied  that anyone  could contribute                                                                    
up to $14,000 per year.                                                                                                         
                                                                                                                                
Vice-Chair  Saddler  felt  that  it would  take  $14,000  to                                                                    
achieve the $40,000 cap on the account.                                                                                         
                                                                                                                                
Co-Chair Thompson would be gaveling out in about 5 minutes.                                                                     
                                                                                                                                
Representative Wilson  wanted to amend the  fiscal note. She                                                                    
thought it should be zero.                                                                                                      
                                                                                                                                
Vice-Chair  Saddler indicated  that the  fees associated  by                                                                    
the program were  the fees could be covered by  the fees set                                                                    
by  the investment  company that  managed  the accounts.  He                                                                    
remarked that the indeterminate  note was because the number                                                                    
of applicants was unknown.                                                                                                      
                                                                                                                                
10:52:40 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:53:15 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Thompson indicated  that  the  committee would  be                                                                    
recessing to accommodate floor session.                                                                                         
                                                                                                                                
10:53:27 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
1:25:19 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Thompson indicated HB 188  would be set aside for a                                                                    
moment.                                                                                                                         
                                                                                                                                
HB  188  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE CONCURRENT RESOLUTION NO. 4                                                                                             
                                                                                                                                
     Relating  to the  duties of  delegates selected  by the                                                                    
     legislature  to  attend  a  convention  of  the  states                                                                    
     called  under  art.  V,   Constitution  of  the  United                                                                    
     States,  to consider  a  countermand  amendment to  the                                                                    
     Constitution of  the United  States; establishing  as a                                                                    
     joint  committee   of  the  legislature   the  Delegate                                                                    
     Credential Committee and relating  to the duties of the                                                                    
     committee;  providing for  an  oath  for delegates  and                                                                    
     alternates  to  a   countermand  amendment  convention;                                                                    
     providing  for  a  chair and  assistant  chair  of  the                                                                    
     state's  countermand  amendment  delegation;  providing                                                                    
     for  the  duties  of the  chair  and  assistant  chair;                                                                    
     providing   instructions  for   the   selection  of   a                                                                    
     convention president;  and providing  specific language                                                                    
     for  the countermand  amendment  on  which the  state's                                                                    
     convention delegates are  authorized by the legislature                                                                    
     to vote to approve.                                                                                                        
                                                                                                                                
1:26:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SHELLEY  HUGHES, SPONSOR, explained  that HCR
4.  She stated  that the  resolution was  the second  of two                                                                    
resolutions that  were working in tandem.  She remarked that                                                                    
HCR 14 was in the  Rules Committee awaiting this resolution.                                                                    
She explained that the word  "countermand" means "veto." She                                                                    
explained that the resolutions were  intended to restore the                                                                    
appropriate  balance  between  the states  and  the  federal                                                                    
government. She  shared that a  poll conducted in  Alaska in                                                                    
March 2015 showed that 82  percent of Alaskans believed that                                                                    
it  was   important  to   address  the   federal  government                                                                    
overstepping  its bounds.  She understood  that the  federal                                                                    
government was not the enemy,  because it did many important                                                                    
actions  for Alaska.  She stressed  that the  resolution was                                                                    
not  an "anti-federal  government" bill.  She felt  that the                                                                    
resolution was  a non-partisan issue.  She felt that  it was                                                                    
about the  working relationship between  the states  and the                                                                    
federal  government.  She  remarked  that,  over  time,  the                                                                    
federal government  had not always focused  its attention on                                                                    
national  concerns, so  there was  currently a  problem. She                                                                    
felt  that the  federal  government  often conducted  itself                                                                    
with disregard  and a lack  of accountability to  the state,                                                                    
and specifically  to Alaska's detriment.  She felt  that the                                                                    
issue  of  Alaska National  Wildlife  Refuge  (ANWR) was  an                                                                    
example of  the federal government overstepping  its bounds.                                                                    
She shared  that the legislature had  historically protested                                                                    
and  resolved against  the  federal  government. She  shared                                                                    
that  there  was often  litigation  with  rare success.  She                                                                    
remarked that, typically, the actions  of the state were met                                                                    
with   silence  or   weak  affirmation   from  the   federal                                                                    
government.  She  stressed  that  the  encroachment  on  the                                                                    
sovereignty was  frustrated for Alaskans. She  remarked that                                                                    
there were  many times that  the federal government  did not                                                                    
always know  what is best  for the state. She  stressed that                                                                    
the legislature  had the right  and duty to work  to restore                                                                    
the balance between the state and federal governments.                                                                          
                                                                                                                                
Representative  Hughes  stated  that  the  first  resolution                                                                    
called  for the  convention for  the countermand  amendment.                                                                    
The current legislation gave  instructions to the delegates.                                                                    
She remarked  that the outline of  instructions was intended                                                                    
to  keep order,  and  ensure that  the  constitution is  not                                                                    
dismantled. The  resolution outlined the  delegate selection                                                                    
process;  outlines the  delegate  duties;  and includes  the                                                                    
specific language of the countermand amendment.                                                                                 
                                                                                                                                
Representative Hughes  explained that it took  34 states, to                                                                    
call  the  convention.  She  furthered  that  once  Congress                                                                    
summoned the convention, it would  take a simple majority to                                                                    
approve  the  amendment  language.  She  explained  that  38                                                                    
states  needed  to  ratify  the  amendment.  Following  that                                                                    
ratification,   the  amendment   was  added   to  the   U.S.                                                                    
Constitution.  She  stated  that a  particular  state  would                                                                    
decide   that   either   a  federal   statute,   regulation,                                                                    
administrative order,  or judicial  decision was not  in the                                                                    
best  interest of  the state.  Therefore,  that state  would                                                                    
pass a resolution in its  state legislature to announce that                                                                    
it  was not  in  the best  interest of  the  state. At  that                                                                    
point, another  29 states  would need  to pass  a resolution                                                                    
stating that  the item was not  in the best interest  of the                                                                    
state. At that  point, the item was  rescinded. She remarked                                                                    
that she understood  that the resolution would  only be used                                                                    
with great consensus.                                                                                                           
                                                                                                                                
1:34:30 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:34:41 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
1:35:04 PM                                                                                                                    
                                                                                                                                
MIKE COONS, LEGISLATIVE  DIRECTOR, CITIZENS INITIATIVES (via                                                                    
teleconference),  remarked  that  the fiscal  note  for  the                                                                    
resolution was zero. He explained  that until 34 states made                                                                    
the application  for the convention,  there was no  cost for                                                                    
the  upcoming fiscal  year. Once  the 34  state applications                                                                    
occurred, the  legislatures would determine the  cost of the                                                                    
convention. He  stated that the resolution  maintained state                                                                    
sovereignty in  the Article 5  process; and ensured  a safe,                                                                    
efficient,  and timely  convention. Therefore,  reducing any                                                                    
costs the  state may  pay to the  delegates. He  shared that                                                                    
there would be cost savings  on unfunded federal mandates by                                                                    
repeal of many of the regulations.                                                                                              
                                                                                                                                
Representative Munoz queried the  subject number limit, once                                                                    
the threshold was met. Mr.  Coons replied that the amendment                                                                    
application was for a countermand amendment convention.                                                                         
                                                                                                                                
Representative  Munoz  wondered  how  to get  items  on  the                                                                    
convention  agenda. Mr.  Coons responded  that there  was no                                                                    
subject,  rather it  was a  named amendment  with the  state                                                                    
legislative approved language to the amendment.                                                                                 
                                                                                                                                
Representative Hughes  furthered that  the subject  or topic                                                                    
for a convention, was through a call application.                                                                               
                                                                                                                                
Co-Chair  Thompson wondered  whether  the legislature  could                                                                    
direct   the  delegate's   actions.  Representative   Hughes                                                                    
responded  that   the  delegates  could  only   address  the                                                                    
countermand amendment at the convention.                                                                                        
                                                                                                                                
Representative  Guttenberg  commented that  the  legislature                                                                    
would be assigning outside of  the state's jurisdiction, and                                                                    
dictating their  actions. He felt  that the  legislature did                                                                    
not  have  the authority  to  control  peoples' actions.  He                                                                    
remarked  that a  representative  outside of  the state  was                                                                    
outside of  the state's  jurisdiction. He felt  that calling                                                                    
someone  back,   because  they   could  not   compromise  or                                                                    
disagreed, was not a realistic  nor legal situation. He felt                                                                    
that  it   was  not   enforceable.  He  remarked   that  the                                                                    
convention  could occur  with the  delegates disagreeing  on                                                                    
the subject.  He wondered if  a convention could  be called,                                                                    
based  on  varying  subjects  and  purposes.  Representative                                                                    
Hughes replied  that the  34 applications  would have  to be                                                                    
for the same subject.                                                                                                           
                                                                                                                                
1:42:42 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  queried the level  of discussion.                                                                    
He  wondered if  the  questions should  be  directed to  the                                                                    
sponsor or Mr. Coons.                                                                                                           
                                                                                                                                
Co-Chair  Thompson stated  that  the question  could be  for                                                                    
either individual.                                                                                                              
                                                                                                                                
Representative  Guttenberg  announced  that  he  was  deeply                                                                    
disturbed   by  the   resolution.  He   stressed  that   the                                                                    
constitution was  silenced regarding the delegates.  He felt                                                                    
that  it was  a legislative  "power grab"  for deciding  the                                                                    
delegates.  He   shared  that   other  states   had  general                                                                    
elections for people  who want to be delegates  to the state                                                                    
constitution.  He felt  that  the  people, not  specifically                                                                    
legislators, should  be sent to  the convention. He  felt it                                                                    
egregious to  assume that legislators  were the  only people                                                                    
qualified  to  serve  as  delegates.  Representative  Hughes                                                                    
replied  that   the  resolution   did  not   determine  that                                                                    
legislators would  be delegates. She pictured  the delegates                                                                    
as  residents of  Alaska. She  remarked that  the resolution                                                                    
set  up a  credential  committee of  legislators, who  would                                                                    
choose the delegates.                                                                                                           
                                                                                                                                
Representative  Guttenberg  found  many  references  in  the                                                                    
resolution about the power of  the legislature. He felt that                                                                    
there should  be an electoral process  that allowed Alaskans                                                                    
to vote for the best  delegate. He felt that the legislature                                                                    
did  not  have  any  special skills  separate  from  regular                                                                    
residents of Alaska.                                                                                                            
                                                                                                                                
Representative  Gattis   stated  that  she  had   a  similar                                                                    
question to Representative Munoz.                                                                                               
                                                                                                                                
Representative  Gara  wondered  if  the  constitution  would                                                                    
allow voters to select  the delegates. Representative Hughes                                                                    
did  not specify  the requirements  for delegate  selection.                                                                    
She  stated  that  the   delegate  appointment  process  was                                                                    
intended to include Alaskans from  around the state. She did                                                                    
not know  if the  language prohibited the  selection through                                                                    
an election process.                                                                                                            
                                                                                                                                
Representative Gara stressed that  he would like the general                                                                    
public to select the delegates.                                                                                                 
                                                                                                                                
Representative Gara  queried the last time  the constitution                                                                    
was successfully changed by a state convention.                                                                                 
                                                                                                                                
STUART  KRUEGER,   STAFF,  REPRESENTATIVE   SHELLEY  HUGHES,                                                                    
replied that there was never  a successful amendment through                                                                    
the  convention  process.  The   closest  any  effort  came,                                                                    
resulted in the  17th Amendment, which was  about the direct                                                                    
election of  senators. He shared  that there was a  point of                                                                    
nearly 30 states,  and at that point, Congress  acted on its                                                                    
own. He felt  that the resolution could be a  tool to enable                                                                    
the  states  to  apply  similar   pressure  to  the  federal                                                                    
government.                                                                                                                     
                                                                                                                                
Co-Chair Thompson CLOSED public testimony.                                                                                      
                                                                                                                                
Vice-Chair Saddler reviewed the fiscal note.                                                                                    
                                                                                                                                
1:51:14 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:52:28 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Neuman  MOVED  to  REPORT CSHCR  4  (STA)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative  Guttenberg  OBJECTED.  He indicated  he  was                                                                    
concerned with the legislature taking  so much power. He did                                                                    
not believe  the state  was the  controlling body.  A remand                                                                    
convention should be the people.                                                                                                
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Munoz,  Pruitt, Saddler,  Wilson, Edgmon,  Gattis,                                                                    
Thompson, Neuman                                                                                                                
OPPOSED: Guttenberg, Kawasaki, Gara                                                                                             
                                                                                                                                
The MOTION PASSED (8/3).                                                                                                        
                                                                                                                                
CSHCR 4 (STA) was REPORTED out of committee with a "do                                                                          
pass" recommendation and with one new indeterminate fiscal                                                                      
note by the Legislature.                                                                                                        
                                                                                                                                
1:56:26 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:19:17 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Thompson stated that the meeting would be in                                                                           
recess until 7:30 AM.                                                                                                           
                                                                                                                                
2:19:35 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:20:28 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Thompson canceled the 7:30 a.m. meeting for the                                                                        
following day. He discussed the schedule for the following                                                                      
meeting.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
2:20:56 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:20 p.m.                                                                                          

Document Name Date/Time Subjects
HB47 Sponsor Statement.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB47 Summary of Changes ver A to ver N.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB47 Supporting Documents amended statutes.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB47 Supporting Documents Employers impacted by salary floor.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB47 Supporting Documents effected employers.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB47 Supporting Documents PERS Employer Salaries for FY08 - FY12 Affected Muniticaplities.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB47 Supporting Documents PERS cities by 2010 population.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB47 Supporting Documents PERS Employer Salaries for FY08 - FY12.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB47 Supporting Documents Total Active PERS employees.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB 47 NEW FN DCCED CRA 4-1-16.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB 188 NEW FN DHSS HCMS 4-1-16.pdf HFIN 4/6/2016 8:30:00 AM
HB 188
HB 47 CS WORKDRAFT FIN vI 4-5-16.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB 047 - Actuarial Analysis.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB 47 NEW FN PERS 4-5-16.pdf HFIN 4/6/2016 8:30:00 AM
HB 47
HB 188 NEW FN DHSS HCMS 4-6-16.pdf HFIN 4/6/2016 8:30:00 AM
HB 188
HB 188 NEW FN DOR T&T 4-6-16.pdf HFIN 4/6/2016 8:30:00 AM
HB 188
HCR 4 Article 5 HFIN.pdf HFIN 4/6/2016 8:30:00 AM
HCR 4