Legislature(2017 - 2018)BARNES 124

02/19/2018 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 207 ALASKA RAILROAD CORPORATION LAND TELECONFERENCED
<Bill Hearing Canceled>
-- Public Testimony --
*+ HB 346 DENTIST: TEMPORARY PERMIT TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 304 MICROLOAN REVOLVING FUND & LOANS TELECONFERENCED
Moved HB 304 Out of Committee
-- Public Testimony --
+= HB 83 TEACHERS & PUB EMPLOYEE RETIREMENT PLANS TELECONFERENCED
Moved HB 83 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                       February 19, 2018                                                                                        
                           3:19 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Colleen Sullivan-Leonard                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Gary Knopp                                                                                                       
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 346                                                                                                              
"An Act relating to the licensure of dentists."                                                                                 
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 304                                                                                                              
"An Act relating to the Alaska microloan revolving loan fund and                                                                
loans from the fund."                                                                                                           
                                                                                                                                
     - MOVED HB 304 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 83                                                                                                               
"An  Act relating  to new  defined  benefit tiers  in the  public                                                               
employees'  retirement   system  and  the   teachers'  retirement                                                               
system;  providing certain  employees  an  opportunity to  choose                                                               
between  the defined  benefit and  defined contribution  plans of                                                               
the  public  employees'  retirement   system  and  the  teachers'                                                               
retirement system; and providing for an effective date."                                                                        
                                                                                                                                
     - MOVED HB 83 OUT OF COMMITTEE                                                                                             
                                                                                                                                
HOUSE BILL NO. 207                                                                                                              
"An Act relating to the sale or other disposal, leasing, or                                                                     
encumbrance of Alaska Railroad Corporation land; and providing                                                                  
for an effective date."                                                                                                         
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 346                                                                                                                  
SHORT TITLE: DENTIST: TEMPORARY PERMIT                                                                                          
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/14/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/14/18       (H)       L&C, FIN                                                                                               
02/19/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 304                                                                                                                  
SHORT TITLE: MICROLOAN REVOLVING FUND & LOANS                                                                                   
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/24/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/24/18       (H)       L&C, FIN                                                                                               
02/12/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
02/12/18       (H)       Heard & Held                                                                                           
02/12/18       (H)       MINUTE(L&C)                                                                                            
02/19/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB  83                                                                                                                  
SHORT TITLE: TEACHERS & PUB EMPLOYEE RETIREMENT PLANS                                                                           
SPONSOR(s): KITO                                                                                                                
                                                                                                                                
01/27/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/27/17       (H)       L&C, STA, FIN                                                                                          
03/25/17       (H)       L&C AT 1:00 PM BARNES 124                                                                              
03/25/17       (H)       Heard & Held                                                                                           
03/25/17       (H)       MINUTE(L&C)                                                                                            
04/12/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/12/17       (H)       Scheduled but Not Heard                                                                                
04/14/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/14/17       (H)       Scheduled but Not Heard                                                                                
04/19/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/19/17       (H)       <Bill Hearing Canceled>                                                                                
02/16/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
02/16/18       (H)       Heard & Held                                                                                           
02/16/18       (H)       MINUTE(L&C)                                                                                            
02/17/18       (H)       L&C AT 1:00 PM BARNES 124                                                                              
02/17/18       (H)       Heard & Held                                                                                           
02/17/18       (H)       MINUTE(L&C)                                                                                            
02/19/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CAITLYN ELLIS, Staff                                                                                                            
Representative Sam Kito                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced HB 346 on behalf of                                                                           
Representative Kito, prime sponsor.                                                                                             
                                                                                                                                
JANEY McCULLOUGH, Division Director                                                                                             
Corporations, Business, & Professional Licensing (DCBPL)                                                                        
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on HB                                                                  
346.                                                                                                                            
                                                                                                                                
DR. DAVID NIELSON                                                                                                               
Alaska Dental Board                                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 346.                                                                          
                                                                                                                                
DR. DAVID LOGAN                                                                                                                 
Alaska Dental Society                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 346.                                                                          
                                                                                                                                
BRITANY CIONI-HAYWOOD, Director                                                                                                 
Division of Economic Development                                                                                                
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced HB 304 on behalf of the House                                                                 
Rules chair by request of the governor.                                                                                         
                                                                                                                                
EDRIC CARILLO, Staff                                                                                                            
Representative Sam Kito                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced HB 83 on behalf of                                                                            
Representative Kito, prime sponsor.                                                                                             
                                                                                                                                
JESSI KIEHL, Staff                                                                                                              
Senator Dennis Egan                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on HB 83.                                                              
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:19:18 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee  meeting   to  order   at  3:19   p.m.  Representatives                                                               
Sullivan-Leonard, Stutes, Birch, Josephson  and Kito were present                                                               
at  the  call to  order.    Representative  Wool arrived  as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
                HB 346-DENTIST: TEMPORARY PERMIT                                                                            
                                                                                                                              
3:20:26 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
HOUSE  BILL  NO.  346,  "An  Act relating  to  the  licensure  of                                                               
dentists."                                                                                                                      
                                                                                                                                
3:20:53 PM                                                                                                                    
                                                                                                                                
CAITLYN  ELLIS,  Staff,  Representative Sam  Kito,  Alaska  State                                                               
Legislature, introduced HB 346 on  behalf of Representative Kito,                                                               
prime sponsor.   She explained the hearing was on  a bill drafted                                                               
from  a  previous meeting.    She  paraphrased from  the  sponsor                                                               
statement [including in committee  packet] which reads as follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     House Bill 346  would allow the Alaska  Board of Dental                                                                    
     Examiners  to grant  temporary licenses  when a  dental                                                                    
     specialist is suddenly incapacitated or when a small                                                                       
     community does not have access to specialized care.                                                                        
                                                                                                                                
     Alaska  has a  limited  number  of dental  specialists,                                                                    
     many of  whom serve  multiple small  communities. There                                                                    
     are nine dental specialties  as defined by the American                                                                    
     Dental   Association:   oral   surgery,   orthodontics,                                                                    
     periodontics   (gums),   endodontics   (root   canals),                                                                    
     pedodontics  (kids), prosthodontics  (replacing teeth),                                                                    
     public health,  , oral  pathology (oral  diseases), and                                                                    
     oral radiology (x-rays); however, Alaska does not have                                                                     
     a  single  specialist in  oral  radiology.  Of the  647                                                                    
     licensed   dentists  in   Alaska,   136  dentists   are                                                                    
     specialists.                                                                                                               
                                                                                                                                
     Dental specialists in Alaska  are limited in number and                                                                    
     have  full  schedules.  If  a  specialist  is  suddenly                                                                    
     incapacitated, there  is no reserve  to draw  from, and                                                                    
     multiple small communities  could be without specialist                                                                    
     care for an extended  period of time. Small communities                                                                    
     have   historically   had   a  hard   time   recruiting                                                                    
     healthcare  practioners  and  the  trend  seems  to  be                                                                    
     worsening.                                                                                                                 
                                                                                                                                
     Temporary dental licenses would  allow the Alaska Board                                                                    
     of Dental  Examiners to maintain  dental care  in these                                                                    
     communities  until a  full-time dentist  can be  found.                                                                    
     The board is ideally qualified  to evaluate the need to                                                                    
     circumvent   transitional   licensing  procedures   for                                                                    
     dentists in exceptional circumstances.                                                                                     
                                                                                                                                
3:23:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD asked  whether  there are  other                                                               
medical professions that require temporary licensure.                                                                           
                                                                                                                                
JANEY  McCULLOUGH, Division  Director, Corporations,  Business, &                                                               
Professional   Licensing   (DCBPL),   Department   of   Commerce,                                                               
Community &  Economic Development (DCCED), answered  questions in                                                               
the  hearing on  HB 346.   She  answered that  most of  the other                                                               
professions have an avenue for temporary licensure.                                                                             
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  asked   for  confirmation  that                                                               
prior  to the  proposed legislation  specialist dentists  did not                                                               
have the same tool.                                                                                                             
                                                                                                                                
MS. McCULLOUGH answered in the affirmative.                                                                                     
                                                                                                                                
3:24:19 PM                                                                                                                    
                                                                                                                                
DR. DAVID NIELSON,  Alaska Dental Board, testified  in support of                                                               
HB  346.   He  said  the  creation  of a  streamlined,  temporary                                                               
license  would   solve  the   problem  of   incapacitated  dental                                                               
specialists who serve  a patient base that cannot  be absorbed by                                                               
the existing licensees,  either because they are  a specialist or                                                               
due to their remote location.                                                                                                   
                                                                                                                                
3:25:57 PM                                                                                                                    
                                                                                                                                
DR. DAVID LOGAN,  Alaska Dental Society, testified  in support of                                                               
HB 346.   He said  the rationale  behind the legislation  is that                                                               
communities risk being without  specialist dental services should                                                               
a specialist become incapacitated.                                                                                              
                                                                                                                                
CHAIR KITO  asked for any  information on  how the bill  could be                                                               
made better.                                                                                                                    
                                                                                                                                
DR.  LOGAN  said the  proposed  bill  would  allow the  board  to                                                               
shorten the process of emergency licensing for dentists.                                                                        
                                                                                                                                
CHAIR KITO  surmised that was  consistent with the intent  of the                                                               
bill.                                                                                                                           
                                                                                                                                
3:28:00 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony  on HB 346.  Upon ascertaining                                                               
that no  one was available to  testify, he set the  proposed bill                                                               
aside.                                                                                                                          
                                                                                                                                
CHAIR KITO  announced the  committee was  working on  a committee                                                               
substitute.                                                                                                                     
                                                                                                                                
3:28:29 PM                                                                                                                    
                                                                                                                                
[HB 346 was held over.]                                                                                                         
                                                                                                                                
            HB 304-MICROLOAN REVOLVING FUND & LOANS                                                                         
                                                                                                                              
3:28:32 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
HOUSE  BILL NO.  304, "An  Act relating  to the  Alaska microloan                                                               
revolving loan fund and loans from the fund."                                                                                   
                                                                                                                                
3:28:52 PM                                                                                                                    
                                                                                                                                
BRITANY   CIONI-HAYWOOD,    Director,   Division    of   Economic                                                               
Development,  Department   of  Commerce,  Community   &  Economic                                                               
Development (DCCED),  introduced HB  304 on  behalf of  the House                                                               
Rules  chair by  request  of  the governor.    She explained  the                                                               
changes  to the  [microloan revolving]  fund in  the legislation.                                                               
She said  one major  change would  be the  extension of  the term                                                               
from 6  years to  15 years as  well as a  change in  the interest                                                               
rate from  prime plus  1 percent  to prime plus  2 percent.   She                                                               
added  the  change  would  align the  program  with  other  state                                                               
programs.                                                                                                                       
                                                                                                                                
3:29:52 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  stated public  testimony  was  still open  from  the                                                               
previous hearing.   Upon ascertaining  that no one  was available                                                               
to testify, he closed public testimony on HB 304                                                                                
                                                                                                                                
3:30:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  spoke to  the program and  said he  hopes it                                                               
gets more use.                                                                                                                  
                                                                                                                                
CHAIR KITO said he would  forward information to his constituents                                                               
to get more interest in the program.                                                                                            
                                                                                                                                
3:30:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL moved to report  HB 304 out of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
3:31:19 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:31 p.m. to 3:34 p.m.                                                                       
                                                                                                                                
        HB  83-TEACHERS & PUB EMPLOYEE RETIREMENT PLANS                                                                     
                                                                                                                                
3:34:39 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  final order of business  would be                                                               
HOUSE BILL NO. 83, "An Act  relating to new defined benefit tiers                                                               
in  the public  employees'  retirement system  and the  teachers'                                                               
retirement system; providing certain  employees an opportunity to                                                               
choose  between  the  defined benefit  and  defined  contribution                                                               
plans  of  the  public  employees'   retirement  system  and  the                                                               
teachers'  retirement  system;  and providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
3:35:09 PM                                                                                                                    
                                                                                                                                
EDRIC  CARILLO,  Staff,  Representative Sam  Kito,  Alaska  State                                                               
Legislature, introduced  HB 83 on behalf  of Representative Kito,                                                               
prime sponsor.   He paraphrased  the sponsor  statement [included                                                               
in   committee  packet],   which  reads   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     House  Bill 83  lets  teachers, Troopers,  firefighters                                                                    
     and  other public  employees choose  one  of two  state                                                                    
     retirement   systems:   today's  defined   contribution                                                                    
     retirement account,  or earning  a new  defined benefit                                                                    
     pension. And it saves the state money in the                                                                               
     process.                                                                                                                   
                                                                                                                                
     A  defined  benefit pension  takes  time  to earn,  but                                                                    
     rewards public  service by paying a  guaranteed monthly                                                                    
     benefit   and,   for    long-term   employees,   health                                                                    
     insurance. An  individual defined  contribution account                                                                    
     is portable from one employer  to another, and flexible                                                                    
     in how it can be used, but makes no guarantees.                                                                            
     HB  83  lets  newly  hired public  servants  in  Alaska                                                                    
     choose  the one  that fits  best. HB  83 creates  a new                                                                    
     more stable,  more predictable defined  benefit pension                                                                    
     tier  for teachers  and public  employees. A  few years                                                                    
     ago, Alaska  beefed up oversight of  the pension system                                                                    
     to head off any new  surprises. HB 83 keeps these smart                                                                    
     reforms, making Alaska pensions stronger than ever.                                                                        
                                                                                                                                
     And  because  the  defined  benefit  pensions  for  new                                                                    
     employees  include sharing  the risk  of rising  health                                                                    
     costs,  they will  never cost  employers more  than the                                                                    
     defined contribution system,  saving money for schools,                                                                    
     cities, and the State  of Alaska. Fiscal notes prepared                                                                    
     for prior versions of this  bill show it save the state                                                                    
     roughly $70 million in the first 10 years.                                                                                 
                                                                                                                                
     Alaska  teachers and  public employees  don't earn  the                                                                    
     private  sector's defined  benefit of  Social Security,                                                                    
     and  many  even  lose  Social  Security  benefits  they                                                                    
     earned in  past jobs.  So for  most, a  defined benefit                                                                    
     pension  makes  sense.   Other  employees  will  choose                                                                    
     individual defined  contribution accounts  because they                                                                    
     prefer  flexibility,   portability,  and   control,  or                                                                    
     because their  plans do  not include  long-term service                                                                    
     in  the  public  sector.  HB 83  lets  them  choose  an                                                                    
     individual account.                                                                                                        
                                                                                                                                
     The teachers  who educate our children,  the police and                                                                    
     firefighters who  protect our families, and  the public                                                                    
     employees who serve  our state and cities  will be able                                                                    
     to choose the benefit that best fits their service.                                                                        
                                                                                                                                
     Thank you for your support of House Bill 83.                                                                               
                                                                                                                                
3:37:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH stated  that  his biggest  concern was  the                                                               
unconstrained cost downstream  and asked about a  fiscal note for                                                               
the proposed bill.                                                                                                              
                                                                                                                                
MR. CARILLO deferred to Senator Dennis Egan's staff.                                                                            
                                                                                                                                
3:38:13 PM                                                                                                                    
                                                                                                                                
JESSI   KIEHL,  Staff,   Senator   Dennis   Egan,  Alaska   State                                                               
Legislature,  answered questions  in the  hearing on  HB 83.   He                                                               
stated all bills  that impact the retirement system  of the state                                                               
are  required by  statute to  have an  actuarial analysis  before                                                               
they are  reported from  the Rules  Committee to  the floor.   He                                                               
said  the proposed  bill maintains  all the  safeguards that  had                                                               
been put in place 10 or 12 years previously.                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  asked about  the current  contribution rate                                                               
for PERS/TERS between employee match and employer match.                                                                        
                                                                                                                                
MR. KIEHL  said it's  difficult to disaggregate  by tier,  but in                                                               
the fiscal year 2018 [FY 18]  budget all employers are charged 22                                                               
percent  employer  rate  after the  employee  contribution  rate,                                                               
which is  different for the  defined contribution tiers  than for                                                               
prior  defined benefit  tiers.   He  added the  state makes  "on-                                                               
behalf"  payments for  the legacy  unfunded  liability which  was                                                               
roughly 3 percent  of payroll in the previous year.   He remarked                                                               
the Tier  I system is much  more expensive.  He  highlighted that                                                               
under HB  83 with employee  choice, all employees in  the defined                                                               
contribution plan or the new  defined benefit system would pay in                                                               
at 8 percent of payroll.                                                                                                        
                                                                                                                                
REPRESENTATIVE  BIRCH asked  for confirmation  that the  employee                                                               
pays 8 percent and the employer matches that.                                                                                   
                                                                                                                                
MR. KIEHL  answered the  employer rate  would remain  22 percent,                                                               
but  the prefunding  cost is  different.   He added  the unfunded                                                               
legacy issue is still being dealt with.                                                                                         
                                                                                                                                
REPRESENTATIVE  BIRCH  surmised if  an  employee  makes $1,000  a                                                               
month, 8  percent goes into an  account with their own  name, and                                                               
the employer matches 22 percent.                                                                                                
                                                                                                                                
MR. KIEHL answered in the  defined contribution plan it goes into                                                               
an account with the employee's name on it.                                                                                      
                                                                                                                                
REPRESENTATIVE  BIRCH  suggested  30 percent  of  the  employee's                                                               
salary goes into the account.                                                                                                   
                                                                                                                                
CHAIR KITO said he thought the  question was whether the state of                                                               
Alaska's current plan is different from other 401K plans.                                                                       
                                                                                                                                
3:42:55 PM                                                                                                                    
                                                                                                                                
MR.  KIEHL  answered the  current  defined  contribution plan  is                                                               
similar  to some  major employers'  plans in  which the  employee                                                               
contributes  to a  personalized account  and the  employer has  a                                                               
partial match equivalent  to a 401K.  He added  that the employer                                                               
also  puts  money into  the  health  benefits trust,  the  health                                                               
reimbursement account, and the  occupational death and disability                                                               
account.  He added  that the new tier created in  HB 83 would not                                                               
cost  more  for   the  employer  to  prefund   than  the  defined                                                               
contribution tier.   He  said with  the risk-sharing  of employee                                                               
health the new  pension tier [in HB 83] would  not cost employers                                                               
more to prefund than the defined contribution tier.                                                                             
                                                                                                                                
CHAIR KITO said  there is a percentage that an  employee pays and                                                               
a percentage the employer pays.   He asked what those percentages                                                               
are.                                                                                                                            
                                                                                                                                
MR. KIEHL  answered that  in the  defined contribution  plan, the                                                               
employee pays 8 percent into  an individual account, the employer                                                               
matches  5  percent into  that  individual  account, roughly  1.2                                                               
percent goes  into the  health trust, 3  percent of  payroll goes                                                               
into a health  reimbursement account with the  employee's name on                                                               
it,  and the  occupational death  and disability  is roughly  1.4                                                               
percent for police and fire  employees, and about .75 percent for                                                               
all other PERS.                                                                                                                 
                                                                                                                                
3:45:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH asked whether  the Supplemental Annuity Plan                                                               
(SBS) comes into the equation.                                                                                                  
                                                                                                                                
MR. KIEHL answered  that it would for those  state employees that                                                               
get SBS.   He specified most teachers and  municipal employees do                                                               
not get SBS.                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH asked what that amounts to.                                                                                
                                                                                                                                
MR. KIEHL answered  the employees contribute roughly  the same as                                                               
social security, so just under 7 percent each.                                                                                  
                                                                                                                                
3:46:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  said it was not  clear where the                                                               
$70 million in savings comes from.                                                                                              
                                                                                                                                
MR. KIEHL  answered that  those numbers come  from two  groups of                                                               
actuaries who did a series  of long-term actuarial projections on                                                               
the impacts of the proposed bill.                                                                                               
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD suggested  it was  Conduit Group                                                               
from the Alaska Retirement Management Board (ARMB).                                                                             
                                                                                                                                
MR.  KIEHL said  it was  the Department  of Administration  (DOA)                                                               
Division of Retirement and Benefits who hired the actuaries.                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  shared her  understanding  that                                                               
Conduit Group and Buck had done a study.                                                                                        
                                                                                                                                
MR.  KIEHL answered  the numbers  were generated  by Buck  and an                                                               
actuary called  Flick Fornia in 2013  and it was not  an analysis                                                               
of a  new proposal.   He added updated  numbers would need  to be                                                               
analyzed.                                                                                                                       
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD asked for a copy of the study.                                                                  
                                                                                                                                
MR. KIEHL said he would comply.                                                                                                 
                                                                                                                                
3:48:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  said he thought many  current employees are                                                               
largely  in  support.     He  brought  up  a   concern  from  law                                                               
enforcement  employees who  don't  have health  insurance for  20                                                               
years because they retire at age 45.                                                                                            
                                                                                                                                
MR.  KIEHL  asked  whether  he   was  asking  about  the  defined                                                               
contribution plan or the new tier in HB 83.                                                                                     
                                                                                                                                
REPRESENTATIVE  BIRCH  asked  if   there  is  a  medical  benefit                                                               
afforded  to  law  enforcement employees  who  have  a  different                                                               
retirement age from other retirees.                                                                                             
                                                                                                                                
MR.  KIEHL stated  that under  the current  defined contribution-                                                               
only tier,  a peace  officer or firefighter  who retires  with 25                                                               
years of service  will get access to medical coverage  as long as                                                               
they retire directly from the system.   Under HB 83, that same 25                                                               
years of  service applies  for vesting  in the  retirement health                                                               
benefit, unless  the employee is over  65 years of age.   He said                                                               
they also  will pay a percentage  of the premium that  may change                                                               
over the  course of one's  career until retirement age,  then the                                                               
percentage  locks.   He  added  the  premiums  do not  lock,  the                                                               
percentage paid would lock.                                                                                                     
                                                                                                                                
3:51:57 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  said  public  testimony  was  still  open  from  the                                                               
previous hearing.   Upon ascertaining  that no one  was available                                                               
to testify, he closed public testimony on HB 83.                                                                                
                                                                                                                                
3:52:22 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO said  the effective  date  had not  been updated  and                                                               
would be addressed in Amendment 1.                                                                                              
                                                                                                                                
3:52:43 PM                                                                                                                    
                                                                                                                                
CHAIR KITO moved to adopt Amendment 1, which read as follows:                                                                   
                                                                                                                                
     Page 18, line 7:                                                                                                           
          Delete "July 1, 2017"                                                                                                 
          Insert "January 1, 2019"                                                                                              
                                                                                                                                
3:53:02 PM                                                                                                                    
                                                                                                                                
There being no objection, Amendment number 1 was adopted.                                                                       
                                                                                                                                
CHAIR  KITO   advised  that  a  committee   substitute  would  be                                                               
forthcoming.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES   expressed  her  full  support   for  the                                                               
proposed bill.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  JOSEPHSON said  he  supports HB  83  and said  he                                                               
thinks it will assist with employee retention problems.                                                                         
                                                                                                                                
3:54:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH said  he was  a  "no" vote  because he  had                                                               
concerns regarding  the mounting  liability to  the state  and he                                                               
did not know how the proposed bill would impact the budget.                                                                     
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD said  she echoed  Representative                                                               
Birch's comments.   She  added she did  not understand  where the                                                               
$70 million savings would come from  and that she felt that until                                                               
the final  actuarial report  was issued, "it  was pretty  hard to                                                               
say yes on this."                                                                                                               
                                                                                                                                
3:55:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  said  he thinks  public  employers  are  in                                                               
support of  this bill.  He  gave the example of  firefighters who                                                               
are trained in the state and leave the state after five years.                                                                  
                                                                                                                                
CHAIR KITO said he thought it  was a good idea to have additional                                                               
tools for  employers to recruit and  retain employees, especially                                                               
as the  generation of baby  boomers enters retirement.   He added                                                               
that  one  of  the  biggest  liabilities for  the  state  is  the                                                               
liability of health care costs which no one can predict.                                                                        
                                                                                                                                
3:57:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL moved  to report  HB  83 as  amended out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.                                                                                                                   
                                                                                                                                
3:58:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD objected.                                                                                       
                                                                                                                                
3:58:05 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives Stutes, Josephson,                                                               
Kito, and  Wool voted in favor  of HB 83.   Representatives Birch                                                               
and  Sullivan-Leonard voted  against it.   Therefore,  HB 83  was                                                               
reported out of  the House Labor and  Commerce Standing Committee                                                               
by a vote of 4-2.                                                                                                               
                                                                                                                                
3:59:56 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
3:59 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB346 Letters of Support 2.17.18.pdf HL&C 2/19/2018 3:15:00 PM
HB 346
HB346 Supporting Document - Dentist specialty numbers.pdf HL&C 2/19/2018 3:15:00 PM
HB 346
HB346 Version A.PDF HL&C 2/19/2018 3:15:00 PM
HB 346
HB346 Fiscal Note DCCED CBPL 2.16.18.pdf HL&C 2/19/2018 3:15:00 PM
HB 346
HB083 Opposition Letter 2.16.18.pdf HL&C 2/19/2018 3:15:00 PM
HB 83
HB083 Letters of Support 2.17.18.pdf HL&C 2/19/2018 3:15:00 PM
HB 83
HB346 Sponsor Statement.pdf HL&C 2/19/2018 3:15:00 PM
HB 346