Legislature(2007 - 2008)HOUSE FINANCE 519
05/10/2007 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB125 | |
| SB84 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 22 | TELECONFERENCED | |
| += | SB 125 | TELECONFERENCED | |
| + | SB 84 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 10, 2007
8:54 a.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 8:54:17 AM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Richard Foster
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas, Jr.
MEMBERS ABSENT
None
ALSO PRESENT
Pat Shier, Director, Division of Retirement and Benefits,
Department of Administration; Kevin Brooks, Deputy
Commissioner, Department of Administration; Virginia Ragle,
Assistant Attorney General, Labor and State Affairs,
Department of Law; Senator Donny Olson; Denise Liccioli,
Staff, Senator Donny Olson
PRESENT VIA TELECONFERENCE
Warren Cummings, Alaska Fire Chiefs Association, Fairbanks;
Doug Schrage, Anchorage Fire Department; Steve Belanger,
State Fire Marshall, Anchorage; Jack Smith, Barrow Fire
Department; Emily Nenon, American Cancer Society
SUMMARY
HB 22 "An Act extending the termination date for the
Board of Governors of the Alaska Bar Association;
and providing for an effective date."
HB 22 was REPORTED out of Committee with a "do
pass" recommendation and with zero fiscal note #1
by Department of Commerce, Community and Economic
Development and with zero fiscal note #2 by the
Office of the Governor.
CSSB 125(FIN) "An Act relating to the accounting and
payment of contributions under the retirement
plans of the Public Employees' Retirement System
of Alaska and the Teachers' Retirement System, to
calculations of contributions under those
retirement plans, and to participation in, and
termination of and amendments to participation in,
the defined benefit plans of those systems;
relating to employer contributions to the health
reimbursement arrangement plan; making conforming
amendments; and providing for an effective date."
CSSB 125 (FIN) was heard and HELD in Committee for
further consideration.
CSSB 84(JUD) "An Act relating to the testing and packaging
of cigarettes to be sold, offered for sale, or
possessed in this state; and providing for an
effective date."
CSSB 84 (JUD) was heard and HELD in Committee for
further consideration.
8:54:30 AM
CS FOR SENATE BILL NO. 125(FIN)
"An Act relating to the accounting and payment of
contributions under the retirement plans of the Public
Employees' Retirement System of Alaska and the
Teachers' Retirement System, to calculations of
contributions under those retirement plans, and to
participation in, and termination of and amendments to
participation in, the defined benefit plans of those
systems; relating to employer contributions to the
health reimbursement arrangement plan; making
conforming amendments; and providing for an effective
date."
Co-Chair Meyer MOVED to ADOPT Amendment #1:
Page 1, line 6, following "plan;"
Insert "relating to participation in the public
employees' defined contribution retirement plan by
certain elected officials;"
Page 14, following line 1:
Insert a new bill section to read:
"* Sec. 22. The uncodified law of the State of
Alaska is amended by adding a new section to read:
PARTICIPATION IN THE DEFINED CONTRIBUTION PLAN OF
THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM BY CERTAIN
ELECTED OFFICIALS. (a) If HCS CSSB 123(FIN), passed by
the first session of the Twenty-Fifth Alaska State
Legislature, is enacted into law, contributions must be
deducted under AS 39.35.730 and contributions must be
made under AS 39.35.750 by the
(1) state on behalf of an Alaska State Legislator who
becomes a member of the Public Employees' Retirement
System defined contribution plan established by
AS 39.35.700 - 39.35.990 as a result of the enactment
of the amendment to AS 39.35.990(16) by sec. 111 of HCS
CSSB 123(FIN); contributions must be based on the
compensation paid by the state to the member from the
date that the member was sworn into office as an
elected official until the effective date of this Act;
(2) political subdivision on behalf of the political
subdivision's elected official who becomes eligible for
membership in the Public Employees' Retirement System
defined contribution plan established by AS 39.35.700 -
39.35.990 as a result of the enactment of AS 39.35.725
made by sec. 83 of HCS CSSB 123(FIN), and who has not
filed a waiver of participation in that plan or a
waiver of participation under AS 39.35.125(a) for
service as an elected official of the political
subdivision; contributions must be based on the
compensation paid by the political subdivision to the
elected official for service as an elected official
from the date that the elected official was sworn into
office until the effective date of this Act.
(b) The period of time covered by contributions
made under (a) of this section constitutes membership
service for the purposes of determining eligibility for
medical benefits under AS 39.35.300 - 39.30.495 and
AS 39.36.700 - 39.35.990.
(c) In this section, "compensation" has the
meaning given in AS 39.35.990. "
Vice Chair Stoltze OBJECTED.
PAT SHIER, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS,
DEPARTMENT OF ADMINISTRATION, explained that the amendment
rectifies an issue regarding certain elected officials who,
because they were not previously members of PERS, were left
out of the new defined contribution (DC) retirement plan.
There is no fiscal note accompanying the amendment. Those
individuals would have to make up past service cost, as
well.
Co-Chair Meyer asked how many people were affected. Mr.
Shier said four.
8:58:44 AM
Representative Hawker questioned what the amendment would do
for state legislators.
VIRGINIA RAGLE, ASSISTANT ATTORNEY GENERAL, LABOR AND STATE
AFFAIRS, DEPARTMENT OF LAW, reported that a couple new
legislators were not covered by the DC plan under SB 123.
Representative Hawker concluded that SB 125 would benefit
seated legislators. Representative Hawker asked if SB 123
has provisions for future legislators and elected officials
to participate in the DC plan. Ms. Ragle replied that is
correct. Representative Hawker asked if this is uncodified
law. Ms. Ragle said yes.
9:01:57 AM
KEVIN BROOKS, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, added that HB 141 inadvertently omitted
several categories. Two individuals will benefit, but will
have to catch up "out of pocket".
Representative Gara asked if anyone else has been
inadvertently excluded. Mr. Brooks explained that only a
small group of people were affected.
Vice Chair Stoltze WITHDREW his objection. There being NO
OBJECTION, it was so ordered.
Co-Chair Meyer asked if Amendment #2, which will come up at
a later time, would impact the fiscal note. Mr. Brooks said
it would not.
9:04:46 AM
Mr. Brooks addressed fiscal note #2 by the Department of
Administration. He explained that $193,113.2 is the total
appropriation for FY 08. There is currently $180 million in
HB 95, which would require an additional appropriation of
$13.1 million. The bill provides a "hold harmless"
provision for PERS employers currently paying below the 22
percent level, which comes to $5.4 million. The bill also
provides a "rebate" provision for employers who have made
additional contributions, which totals $7.2 million. Those
two combined equal $12.6 million, and the actuarially
determined rate at 22 percent, required $180.5 million.
There is $180 million in the appropriation bill, so the
differential of $500,000 with the other two pieces, brings
it up to $13.1 million. It contemplates a rate of 32.5
percent, which the Alaska Retirement Management Board (ARM)
supports. If the legislation passes, there will always be a
blended rate for PERS employers.
9:07:41 AM
Co-Chair Meyer asked if fiscal note #1 is dated 3/16 and
fiscal note #2 is dated 5/3. Mr. Brooks said yes.
Mr. Brooks explained that fiscal note #1 shows no cost to
the Division of Retirement and Benefits; however, an
appropriation would be required to comply with the cost
share provisions of the bill.
Co-Chair Meyer noted that fiscal note #2 does not show the
$180 million already in the operating budget. Mr. Brooks
pointed to the information on page 2 of the fiscal note that
addresses that amount.
Co-Chair Meyer requested an explanation of Amendment #2. Mr.
Shier explained that Amendment #2 would prevent prejudicing
of possible recovery in a suit about the previous actuary.
There is language that states any contributions of the state
should not be considered as an offset for any future
recovery. The purpose is to protect the state's interest.
Representative Crawford asked for clarification. Mr. Shier
explained that if there is a court action and one party
recovers from another party, but they have also "recovered"
from another source, that can diminish the court award. The
amendment would prevent that from happening.
Co-Chair Meyer set CSSB 125 (FIN) aside.
CSSB 125 (FIN) was heard and HELD in Committee for further
consideration.
9:11:23 AM
CS FOR SENATE BILL NO. 84(JUD)
"An Act relating to the testing and packaging of
cigarettes to be sold, offered for sale, or possessed
in this state; and providing for an effective date."
SENATOR DONNY OLSON, sponsor, explained that a fire in a
small village is very devastating. He related a personal
story about a fire in Nome to explain why he sponsored SB
84. SB 84 mandates that only self-extinguishing cigarettes
can be sold in Alaska.
DENISE LICCIOLI, STAFF, SENATOR DONNY OLSON, related that
the bill provides that only self-extinguishing cigarettes
can be sold in the state. It also establishes testing and
certification requirements. These cigarettes are designed
to be less likely to ignite soft furnishings. The bill also
requires cigarette packaging to be marked, identifying them
as self-extinguishing.
Ms. Liccioli continued to say that cigarettes are the
leading cause of home fire fatalities in Alaska and in the
United States. The most common materials first ignited are
mattresses and bedding, upholstered furniture and floor
coverings. She shared a story about a recent fire in
Juneau.
9:15:04 AM
Ms. Liccioli reported statistics relevant to the danger of
cigarettes. She pointed to a handout (copy on file) which
demonstrates the self-extinguishing property. She shared
statistics about legislation in ten other states regarding
this issue. SB 84 is supported by the Association of Alaska
Fire Chiefs Association, the Alaska Firefighters
Association, and the Department of Public Safety, Division
of Fire Protection. She reported that during the first six
months since New York has had this law, there has been a
significant reduction in the number of cigarette-related
fires. SB 84 will save lives, as well as reduce injuries
and damage to property in Alaska. It will have a positive
impact because it allows a fee to be charged which would
more than cover the expense of the program.
9:18:32 AM
Co-Chair Meyer asked if fees or receipts could be used for
the program. Ms. Liccioli said that is the intent. The
fiscal notes for the Departments of Revenue and Public
Safety need to be revised to show that.
Vice Chair Stoltze asked if this bill would regulate the
sale of papers for rolled cigarettes. Ms. Liccioli said it
would not. Vice Chair Stoltze asked if the paper is the
self-extinguishing substance. Ms. Liccioli replied that
there are several ways that this could be accomplished.
"Speed bumps" are built into the cigarettes themselves. In
response to a question by Vice-Chair Stoltz, she reported no
loss of tax revenue due to decreased smoking. Vice Chair
Stoltze stated support for the bill.
9:22:08 AM
Co-Chair Meyer asked if the cigarettes cost more. Ms.
Liccioli said there is no additional cost. Co-Chair Meyer
asked if there is a difference in the taste. Ms. Liccioli
reported that studies show no difference in taste or health
impact. Co-Chair Meyer asked if the cigarette would burn
out at rest. Ms. Liccioli explained how the speed bumps in
the cigarettes work.
Representative Gara noted that the American Lung Association
supports the bill.
Representative Crawford asked about an additive in the paper
that would make a cigarette burn continuously. He asked how
long it would continue to burn between speed bumps. Ms.
Liccioli thought the additive was in the tobacco, not the
paper. Soon after the speed bump, the filter is reached.
9:26:22 AM
In response to a question by Representative Joule, Ms.
Liccioli referred to the transitional section, which states
the affective date when the old cigarettes would need to be
out of the stock.
Representative Hawker observed that "reverse ignition
propensity" is very appropriate. Ms. Liccioli corrected
"reduced ignition propensity" is appropriate.
Representative Hawker said RIP is appropriate.
In response to a question by Co-Chair Meyer, Ms. Liccioli
reported that the tobacco industry is in support of the
legislation. The industry's wish is that all states have
similar legislation.
9:29:54 AM
STEVE BELANGER, STATE FIRE MARSHALL, ANCHORAGE, stated
support for SB 84. He related statistics caused by
cigarette fires.
DOUG SCHRAGE, ANCHORAGE FIRE DEPARTMENT, spoke in support of
SB 84.
9:32:57 AM
JACK SMITH, BARROW FIRE DEPARTMENT, testified in support of
SB 84. He related personal experience with fires caused by
cigarettes.
WARREN CUMMINGS, ALASKA FIRE CHIEFS ASSOCIATION, FAIRBANKS,
testified in support of the bill.
9:35:53 AM
Co-Chair Meyer turned to the fiscal notes. Ms. Liccioli
noted a change to fiscal note #3, which would move money out
of the general fund. The money would come from receipt
supported services instead.
9:36:36 AM
At-ease.
9:38:50 AM
Ms. Liccioli clarified the change in fiscal note #3. The
fiscal note by the Department of Revenue, which is where the
expenditures are, should come from receipt supported
services, which is the revenue that is shown in the fiscal
note by the Department of Public Safety.
EMILY NENON, AMERICAN CANCER SOCIETY, testified that there
does not seem to be evidence that the new cigarettes would
have a negative affect on a person's health.
CSSB 84 (JUD) was heard and HELD in Committee for further
consideration.
9:42:00 AM
HOUSE BILL NO. 22
"An Act extending the termination date for the Board of
Governors of the Alaska Bar Association; and providing
for an effective date."
Vice Chair Stoltze MOVED to REPORT HB 22 out of Committee.
There being NO OBJECTION, it was so ordered.
HB 22 was REPORTED out of Committee with a "do pass"
recommendation and with zero fiscal note #1 by Department of
Commerce, Community and Economic Development and with zero
fiscal note #2 by the Office of the Governor.
ADJOURNMENT
The meeting was adjourned at 9:43 AM.
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