04/14/2005 04:36 PM House HES
| Audio | Topic |
|---|---|
| Start | |
| HB161 | |
| HB13 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE
April 14, 2005
4:36 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Paul Seaton, Vice Chair
Representative Vic Kohring
Representative Sharon Cissna
Representative Berta Gardner
MEMBERS ABSENT
Representative Tom Anderson
Representative Lesil McGuire
OTHER LEGISLATORS PRESENT
Representative Max Gruenberg
COMMITTEE CALENDAR
HOUSE BILL NO. 161
"An Act relating to reemployment of and benefits for retired
teachers and public employees and to teachers or employees who
participated in retirement incentive programs and are
subsequently reemployed as a commissioner; repealing secs. 5, 7,
and 9, ch. 58, SLA 2001; providing for an effective date by
amending the delayed effective date for secs. 3, 5, 9, and 12,
ch. 57, SLA 2001, and repealing sec. 13, ch. 58, SLA 2001, which
is the delayed effective date for secs. 5, 7, and 9, ch. 58, SLA
2001; and providing for an effective date."
- MOVED CSHB 161(HES) OUT OF COMMITTEE
HOUSE BILL NO. 13
"An Act relating to reimbursement of municipal bonds for school
construction; and providing for an effective date."
- MOVED CSHB 13(HES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 161
SHORT TITLE: REEMPLOYMENT OF RETIREES
SPONSOR(S): REPRESENTATIVE(S) ELKINS
02/18/05 (H) READ THE FIRST TIME - REFERRALS
02/18/05 (H) EDU, HES, STA
04/05/05 (H) EDU AT 11:00 AM CAPITOL 106
04/05/05 (H) Moved CSHB 161(EDU) Out of Committee
04/05/05 (H) MINUTE(EDU)
04/06/05 (H) EDU RPT CS(EDU) 1DP 5NR 1AM
04/06/05 (H) DP: THOMAS;
04/06/05 (H) NR: GARA, SALMON, GATTO, LYNN, NEUMAN;
04/06/05 (H) AM: WILSON
04/07/05 (H) EDU AT 11:00 AM CAPITOL 106
04/07/05 (H) -- Meeting Canceled --
04/12/05 (H) HES AT 3:00 PM CAPITOL 106
04/12/05 (H) Heard & Held
04/12/05 (H) MINUTE(HES)
04/14/05 (H) HES AT 3:00 PM CAPITOL 106
BILL: HB 13
SHORT TITLE: SCHOOL CONSTRUCTION BOND REIMBURSEMENT
SPONSOR(S): REPRESENTATIVE(S) GATTO, GRUENBERG
01/10/05 (H) PREFILE RELEASED 12/30/04
01/10/05 (H) READ THE FIRST TIME - REFERRALS
01/10/05 (H) EDU, HES, FIN
01/25/05 (H) EDU AT 11:00 AM CAPITOL 106
01/25/05 (H) -- Meeting Canceled --
02/01/05 (H) EDU AT 11:00 AM CAPITOL 106
02/01/05 (H) Heard & Held
02/01/05 (H) MINUTE(EDU)
02/22/05 (H) EDU AT 11:00 AM CAPITOL 106
02/22/05 (H) -- Meeting Canceled --
03/03/05 (H) EDU AT 11:00 AM CAPITOL 106
03/03/05 (H) Moved Out of Committee
03/03/05 (H) MINUTE(EDU)
03/04/05 (H) EDU RPT 5DP
03/04/05 (H) DP: GARA, GATTO, WILSON, THOMAS, NEUMAN
03/15/05 (H) HES AT 3:00 PM CAPITOL 106
03/15/05 (H) Scheduled But Not Heard
03/22/05 (H) HES AT 3:00 PM CAPITOL 106
03/22/05 (H) <subcommittee meeting>
03/29/05 (H) HES AT 3:00 PM CAPITOL 106
03/29/05 (H) Heard & Held
03/29/05 (H) MINUTE(HES)
04/05/05 (H) HES AT 3:00 PM CAPITOL 106
04/05/05 (H) Heard & Held
04/05/05 (H) MINUTE(HES)
04/07/05 (H) HES AT 3:30 PM CAPITOL 106
04/07/05 (H) <Bill Hearing Postponed>
04/14/05 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
MIKE TIBBLES, Deputy Commissioner
Office of the Commissioner
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the department
during the hearing on HB 161.
REPRESENTATIVE MARY KAPSNER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on HB 13 in support of the
proposed amendment.
CODY RICE, Staff
to Representative Carl Gatto
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on HB 13 regarding the proposed
amendment.
ACTION NARRATIVE
CHAIR PEGGY WILSON called the House Health, Education and Social
Services Standing Committee meeting to order at 4:36:43 PM.
Representatives Kohring, Seaton, Cissna, Gardner, and Wilson
were present at the call to order. Representatives Anderson and
McGuire were absent.
HB 161-REEMPLOYMENT OF RETIREES
CHAIR WILSON announced that the first order of business was
HOUSE BILL NO. 161, "An Act relating to reemployment of and
benefits for retired teachers and public employees and to
teachers or employees who participated in retirement incentive
programs and are subsequently reemployed as a commissioner;
repealing secs. 5, 7, and 9, ch. 58, SLA 2001; providing for an
effective date by amending the delayed effective date for secs.
3, 5, 9, and 12, ch. 57, SLA 2001, and repealing sec. 13, ch.
58, SLA 2001, which is the delayed effective date for secs. 5,
7, and 9, ch. 58, SLA 2001; and providing for an effective
date."
4:37:45 PM
REPRESENTATIVE SEATON moved to adopt the committee substitute
(CS) for HB 161, Version 24-LS0645\F, Craver, 4/14/05, as a work
draft. There being no objection, Version F was before the
committee.
4:38:23 PM
MIKE TIBBLES, Deputy Commissioner, Office of the Commissioner,
Department of Administration, explained the changes to HB 161,
section by section. He said Section 2 is a new section that
would require employers of TRS to provide retired teachers the
same health benefits that they provide to other active teachers.
Furthermore, it would prohibit a teacher who has been rehired
from receiving health benefits from the retirement account. In
other words, he explained, an individual coming back would have
to receive health benefits from the active account, thereby not
allowing a cost shift to the retirement account. Section 4 is a
conforming amendment to Section 2 and requires that the teacher
making an election to continue to receive benefit payments does
not receive retirement and medical benefits during his/her
reemployment.
MR. TIBBLES said Section 5 would require the employer to make a
contribution to the retirement system for each rehired employee.
That contribution would be made to the unfunded liability of the
system on behalf of the [rehired] teacher, at the rate the
employer is making contributions for other teachers. With that
amendment, he explained, there will be no cost to the system.
MR. TIBBLES said Section 6 mirrors Section 2, but applies to
PERS. Section 7 inserts several new subsections. Subsections
(f) and (g) would require that a municipality adopt a policy
similar to what is required for the TRS employers. He
continued:
This policy here, as it's laid out in the statute,
requires that the employees are separated from service
for at least 30 days. The policy has to describe the
circumstances that constitute the shortage, and the
copy of that resolution and policy needs to be
submitted to the administrator of the program - that
would be the director of [the Division of] Retirement
& Benefits - prior to authorizing an individual to
come back from retirement.
MR. TIBBLES, in response to a question from Chair Wilson,
confirmed that both TRS and PERS employers will have to adopt a
policy that they have a recruitment problem prior to bringing
somebody back from retirement.
MR. TIBBLES reviewed that Subsection 8 specifies the length of
the recruitment; it would require an initial recruitment of 15
days, and if there's fewer than 5 qualified, eligible, and
available applicants, then another 15 days of recruitment must
take place before it would be allowable to bring someone back
from retirement.
CHAIR WILSON said there have been reports that some retirees
don't even clean out their desk, but rather just go on vacation
for a month, because they know that they will be hired back.
She asked, "Would this prevent that?"
MR. TIBBLES replied that the individual retiring would run a
risk [of not getting hired back], because if the recruitment
period lasts a total of 30 days and the employer finds a
qualified applicant pool, the retired individual would not be
hired back.
MR. TIBBLES drew attention to subsection (h) and said it applies
solely to the [executive branch of state government]; however,
he stated his belief from working with the committee that the
intent was "to apply that to all PERS members, so that
municipalities would have a minimum level of recruitment." He
said that would be easy to alter with an amendment.
4:43:41 PM
REPRESENTATIVE GARDNER moved Conceptual Amendment [1] to change
Section 7, subsection (h), to include PERS employers.
4:44:05 PM
REPRESENTATIVE SEATON suggested inserting "and all other PERS
employers" on page 4, line 29, after "state government".
MIKE TIBBLES said he believes that for the sake of consistency,
a bill drafter in Legislative Legal and Research Services would
probably insert "political subdivisions or public
organizations".
CHAIR WILSON asked if there was any objection to Conceptual
Amendment 1. There being no objection, Conceptual Amendment 1
was adopted. In response to Representative Kohring, she
confirmed that Conceptual Amendment 1 would be in the sponsor's
best interest.
4:44:59 PM
MR. TIBBLES turned to Section 8, which he said would "require
PERS employers to make contributions to the unfunded liability
on behalf of the retired member at the rate that that employer
is making contributions for that employer's other members." He
specified that that is different than the section for TRS, which
specifies "that the rate has to be for that employer's other
members."
CHAIR WILSON predicted that would help in regard to employee
morale.
MR. TIBBLES referred to Section 9, which he said would extend
the waiver option until 2008. Section 10, he noted, is in
regard to the report to the legislature. He said, "Here I also
note that there was an omission in the draft that I believe was
requested by the chair's office, and that is [that] the report,
as we discussed it, would include not only ... TRS ..., but ...
PERS ..., and in addition, it would require the administration
to detail what actions we're taking to address those hard to
recruit areas."
4:46:36 PM
REPRESENTATIVE SEATON offered his understanding that the sponsor
of the bill had prepared language. He mentioned page 5, line 24
and said the amendment should add PERS into the language.
4:47:53 PM
CHAIR WILSON indicated that she would like to take care of the
language conceptually. She said:
So, rather than having this [be] specific, ...
[Conceptual Amendment 2] will basically say: "The
administrator of the Public Employees' Retirement
System and the PERS and TRS system shall include
information in a report regarding the effects of
employers in the executive branch to address their
recruitment difficulties in job classes in which
retired members have been rehired."
CHAIR WILSON asked if there was any objection to [Conceptual
Amendment 2]. There being no objection, it was so ordered.
REPRESENTATIVE SEATON clarified that [Conceptual Amendment 2]
added "the public employees' retirement and" before "teachers'
retirement" and made "system" plural, to read "systems", as well
as added the appropriate language after line 24.
CHAIR WILSON answered yes.
MR. TIBBLES said that the only other change is the conforming
extension of the program to 2008, in Section 14.
4:49:34 PM
CHAIR WILSON said the legislature won't see a difference in one
year.
4:50:08 PM
REPRESENTATIVE SEATON said that is a three-year extension, which
would "take it into the next election season." He suggested it
may be better to make it be a two-year extension.
CHAIR WILSON said she thinks three years is a reasonable amount
of time.
4:50:52 PM
REPRESENTATIVE GARDNER offered her understanding that the intent
is to "allow for employers to fill their needs with retired
people, while eliminating an adverse impact to ... PERS and TRS
...." She asked, "If we extend this and the terms somewhat
change, what happens to people who are currently retired/rehired
employees? Do their employers start paying into ... PERS and
TRS ... at the end of the original sunset date?"
MR. TIBBLES responded that several provisions will take effect
with the effective date, including the health provisions and the
contributions to the past service rate, and the sunset extension
would allow those individuals to continue on the program until
the end of that period.
REPRESENTATIVE GARDNER said, "So, their terms change, somewhat."
CHAIR WILSON responded in the affirmative.
4:52:06 PM
CHAIR WILSON indicated that the legislature does not want abuses
to the system, but rather wants "people to be looking in areas
and seeing if they can start doing things that will make a
difference, so that there are people that could fill this area."
REPRESENTATIVE GARDNER suggested that the legislature has
reduced the incentive to the employer. She explained, "They
could rehire somebody and not have to pay into PERS and TRS - it
could be a cost savings for them - and we've taken that element
away, while allowing the waiver for real need."
CHAIR WILSON said the legislature cannot keep doing things that
will make the retirement system worse.
4:53:05 PM
REPRESENTATIVE SEATON pointed out that the employers would be
saving the normal retirement rate contribution that they would
be making. He offered further details. He stated for the
record, "We haven't eliminated all the economic incentive for
employers of hiring..."
REPRESENTATIVE GARDNER asked, "Why shouldn't we do that?"
4:54:07 PM
CHAIR WILSON said one reason is "they're not getting any more
benefits from the retirement system, and so we cannot force them
to do something when they're not getting extra benefits."
REPRESENTATIVE SEATON said Chair Wilson is talking about the
contribution of the employee, and he clarified that he and
Representative Gardner were talking about the employer saving
"the normal cost rate contribution into the retirement plan."
He noted that the bill would be heard next in the House State
Affairs Standing Committee, and he suggested that this issue be
taken up there.
4:54:59 PM
REPRESENTATIVE SEATON asked if there is any possibility that
employees will think that they are grandfathered into the
program if the sunset date is left open.
MR. TIBBLES said that the Division of Retirement & Benefits sent
out a letter notifying all individuals on the program that they
would stop receiving their pension benefits on the sunset date
of the employees, thus the issue is clear to those involved. He
said it would be all right to make it clearer in statute;
however, he said he thinks the division has done a sufficient
job in notifying all the employers and employees involved.
4:56:54 PM
REPRESENTATIVE SEATON moved to report CSHB 161, Version 24-
LS0645\F, Craver, 4/14/05, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 161(HES) was reported out of
committee.
HB 13-SCHOOL CONSTRUCTION BOND REIMBURSEMENT
CHAIR WILSON announced that the final order of business was
HOUSE BILL NO. 13, "An Act relating to reimbursement of
municipal bonds for school construction; and providing for an
effective date."
4:58:11 PM
REPRESENTATIVE KOHRING expressed appreciation that the bill is
being heard.
4:59:04 PM
REPRESENTATIVE CISSNA reminded the committee that [Amendment 1,
labeled 24-LS0062\F.2, Mischel, 3/31/05] was left pending from
the prior hearing. Amendment 1, [which Representative Cissna
had presented on behalf of Representative Mary Kapsner], read as
follows:
Page 1, line 1, following "Act":
Insert "relating to the school construction grant
fund;"
Page 1, following line 3:
Insert new bill sections to read:
"* Section 1. AS 14.11.008(a) is amended to read:
(a) In order to receive a grant under this
chapter or an appropriation under AS 37.05.560, a
district must
(1) be
(A) a rural educational attendance area;
(B) a municipal school district and, as of
June 30 of the previous fiscal year, have a population
of less than 1,000; or
(C) a municipal school district that
operates schools on a military reservation; and
(2) provide a percentage share of the
project cost, as determined under (b) or (c) of this
section; a [. A] district shall provide the required
participating share within three years after the date
that the appropriation bill funding the grant is
passed by the legislature.
* Sec. 2. AS 14.11.008(a) is repealed and
reenacted to read:
(a) In order to receive a grant under this
chapter or an appropriation under AS 37.05.560, a
district must provide a percentage share of the
project cost, as determined under (b) or (c) of this
section. A district shall provide the required
participating share within three years after the date
that the appropriation bill funding the grant is
passed by the legislature.
* Sec. 3. AS 14.11.008 is amended by adding a new
subsection to read:
(g) Grant funds provided to a municipal school
district under (a)(1)(C) of this section may only be
used for the costs of school construction or major
maintenance for a school located on a military
reservation.
* Sec. 4. AS 14.11.011(a) is amended to read:
(a) A municipality that is a school district or
a regional educational attendance area eligible under
AS 14.11.008(a) may submit a request to the department
for a grant under this chapter.
* Sec. 5. AS 14.11.011(a) is repealed and
reenacted to read:
(a) A municipality that is a school district or
a regional educational attendance area may submit a
request to the department for a grant under this
chapter."
Page 5, lines 13 - 16:
Delete all material and insert:
"* Sec. 7. AS 14.11.008(g) is repealed.
* Sec. 8. The uncodified law of the State of
Alaska is amended by adding a new section to read:
RETROACTIVITY. If, under sec. 9 of this Act,
secs. 1, 3, 4, and 6 of this Act take effect, they are
retroactive to January 1, 2005.
* Sec. 9. The uncodified law of the State of
Alaska is amended by adding a new section to read:
CONTINGENT EFFECT. Sections 1 - 7 of this Act
take effect only if, at the first regular session or
at a special session, the Twenty-Fourth Alaska
Legislature passes a bill appropriating an amount
equal to or more than $100,000,000 to the school
construction grant fund under AS 14.11.008 -
14.11.011, as amended by secs. 1, 3, and 4 of this
Act, and that bill becomes law not later than October
1, 2005.
* Sec. 10. If, under section 9 of this Act, secs.
2, 5, and 7 of this Act take effect, they take effect
July 1, 2006.
* Sec. 11. Except as provided in sec. 10 of this
Act, this Act takes effect immediately under
AS 01.10.070(c)."
REPRESENTATIVE CISSNA pointed out that Representative Kapsner
was in the audience and invited her to speak concerning the
amendment.
5:00:14 PM
REPRESENTATIVE MARY KAPSNER, Alaska State Legislature, addressed
Amendment 1. She stated that the amendment attempts to "bring
parity to the bill." She explained that a couple of years ago,
the legislature passed a bond package and the overall bill tries
to piggyback on that bond package. She said it was expected
that that the entire bond package would equal $500 million;
however, it turned out to be $728-$729 million. Of that,
approximately one fourth went to rural schools - $154 million.
She said, "We still have $441 million out there on the books in
terms of school construction and predominately that's in rural
Alaska."
REPRESENTATIVE KAPSNER said there have been lawsuits regarding
the parity and disparity in the allocation of funds to rural
schools; because rural schools are not bondable, they rely on
the legislature to make appropriations to them. Amendment 1
would provide an extra $100 million to rural schools, which
would bring more parity to the situation and allow the court to
recognize that there are people within the legislature who
recognize the disparity between urban and rural funding.
REPRESENTATIVE KAPSNER offered her understanding that an
amendment to Amendment 1 has been suggested, which would provide
$100 million per year for three years for rural construction.
REPRESENTATIVE KAPSNER noted that Representative Kohring has
mentioned the overcrowding of schools. She revealed that in her
district, one rural school in the village of Kipnuk is currently
at 323 percent capacity, while the least crowded school in her
district is at 155 percent. By 2012, she said, the expectation
is that the lowest number will be at 227 percent capacity.
REPRESENTATIVE KAPSNER, in response to a question from Chair
Wilson, confirmed it's true that of all the various populations
in Alaska, the Native population is growing at a faster rate
than any other. She said that while the Matanuska-Susitna (Mat-
Su) area is facing a lot of population growth because of
immigration, rural Alaskan villages are losing members who leave
the villages. Even so, she explained the Native population
growth thus: "We do love babies and we keep on having them."
She noted that in general in Alaskan villages, one-third to one-
half of the population is in elementary school and high school.
5:04:16 PM
REPRESENTATIVE GARDNER commented that the additional $100
million still wouldn't be adequate if the need is for over $400
million.
REPRESENTATIVE KAPSNER said that it would be a step in the right
direction, and "an acknowledgment that there hasn't been
parity." She noted that a lot of the rural schools that
currently need funding were built during the Bureau of Indian
Affairs' oversight of education and some of the schools have yet
to receive a state-funded school building.
5:05:35 PM
REPRESENTATIVE CISSNA restated her motion to adopt Amendment 1.
5:05:57 PM
REPRESENTATIVE KOHRING restated his objection [from 4/05/05] for
discussion purposes. He said he would like to hear if the
sponsor approves of Amendment 1.
CODY RICE, Staff to Representative Carl Gatto, Alaska State
Legislature, co-sponsor of HB 13, responded:
I would caution the committee to be careful about
speaking about parity on the record because [the state
is] involved in current litigation. And I think I'd
be loath to say that the committee's action on this
amendment is necessarily indicative of the
legislature's feelings on whether or not there is
educational parity. That's my feeling.
REPRESENTATIVE KOHRING asked Mr. Rice if the amendment is
compatible with the legislation and does not need to be
addressed in a separate bill.
MR. RICE replied, "Representative Gatto's opinion is he would
like the bill to move."
REPRESENTATIVE KOHRING removed his objection to Amendment 1.
5:07:13 PM
REPRESENTATIVE SEATON objected for discussion purposes. He
commented that Amendment 1 would add a new Section 1 to the
bill. He asked, "Is this a new section and the existing
sections are just renumbered?"
MR. RICE replied affirmatively.
REPRESENTATIVE SEATON withdrew his objection.
5:08:39 PM
REPRESENTATIVE CISSNA moved to adopt a conceptual amendment to
Amendment 1, as follows [the page and line numbers correspond to
the numbers on Amendment 1]:
On page 2, line 25:
After "$100,000,000"
Insert "per year for three years"
CHAIR WILSON objected to the conceptual amendment to Amendment
1. She said that if [the committee] is not careful, the bond
will be so expensive that the state cannot meet the bond debt
reimbursement requirement.
5:10:25 PM
MR. RICE stated his belief that the committee could not make
such an amendment because it would bind the future legislature.
REPRESENTATIVE SEATON remarked, "We've got an estimate that HB
13 is going to be [a] $200-$250 million possible bond debt, and
I'm not sure that looking back at the old bond issue is where we
should be."
5:11:19 PM
REPRESENTATIVE CISSNA withdrew the conceptual amendment to
Amendment 1.
CHAIR WILSON asked if there were any further objections to
Amendment 1. There being none, Amendment 1 was adopted.
REPRESENTATIVE KOHRING moved to report HB 13, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 13(HES) was
reported from the House Health, Education and Social Services
Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Health, Education and Social Services Standing Committee meeting
was adjourned at 5:12:12 PM.
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