01/26/2022 05:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB220 | |
| HB159 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 220 | TELECONFERENCED | |
| += | HB 159 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
January 26, 2022
5:19 p.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage
Representative Liz Snyder
Representative David Nelson
Representative James Kaufman
Representative Ken McCarty
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 220
"An Act relating to the Public Employees' Retirement System of
Alaska 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 of Alaska and the teachers' retirement system;
and providing for an effective date."
- MOVED HB 220 OUT OF COMMITTEE
HOUSE BILL NO. 159
"An Act establishing the Consumer Data Privacy Act; establishing
data broker registration requirements; making a violation of the
Consumer Data Privacy Act an unfair or deceptive trade practice;
and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 220
SHORT TITLE: RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
SPONSOR(s): REPRESENTATIVE(s) HOPKINS
05/19/21 (H) READ THE FIRST TIME - REFERRALS
05/19/21 (H) L&C, FIN
11/08/21 (H) L&C AT 4:00 PM ANCH LIO DENALI Rm
11/08/21 (H) Heard & Held
11/08/21 (H) MINUTE(L&C)
01/19/22 (H) L&C AT 3:15 PM BARNES 124
01/19/22 (H) Heard & Held
01/19/22 (H) MINUTE(L&C)
01/26/22 (H) L&C AT 5:15 PM BARNES 124
BILL: HB 159
SHORT TITLE: CONSUMER DATA PRIVACY ACT
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/31/21 (H) READ THE FIRST TIME - REFERRALS
03/31/21 (H) L&C, JUD, FIN
04/23/21 (H) L&C AT 8:00 AM GRUENBERG 120
04/23/21 (H) Heard & Held
04/23/21 (H) MINUTE(L&C)
05/05/21 (H) L&C AT 3:15 PM BARNES 124
05/05/21 (H) Heard & Held
05/05/21 (H) MINUTE(L&C)
05/12/21 (H) L&C AT 3:15 PM BARNES 124
05/12/21 (H) Heard & Held
05/12/21 (H) MINUTE(L&C)
12/06/21 (H) L&C AT 1:00 PM ANCH LIO DENALI Rm
12/06/21 (H) Heard & Held
12/06/21 (H) MINUTE(L&C)
01/21/22 (H) L&C AT 3:15 PM BARNES 124
01/21/22 (H) Heard & Held
01/21/22 (H) MINUTE(L&C)
01/26/22 (H) L&C AT 5:15 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE HOPKINS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
220, as prime sponsor.
ROBERT WOODY
American Property Casualty Insurers Association (APCIA)
Washington, D.C.
POSITION STATEMENT: Testified during the hearing on HB 159.
MAYA MCKENZIE, Technology Policy Council
Entertainment Software Association
Birmingham, Alabama
POSITION STATEMENT: Testified in opposition to HB 159.
ANTON VAN SEVENTER, Council
State Privacy and Security Coalition
Washington, D.C.
POSITION STATEMENT: Testified in opposition to HB 159.
ALYSSA DOOM
Computer & Communications Industry Association(CCPIA)
Washington, D.C.
POSITION STATEMENT: Testified in opposition to HB 159.
DAVID EDMONSON, Vice President of State Policy and Government
Relations
TechNet
Austin, Texas
POSITION STATEMENT: Testified in opposition to HB 159.
ACTION NARRATIVE
5:19:46 PM
CO-CHAIR IVY SPOHNHOLZ called the House Labor and Commerce
Standing Committee meeting to order at 5:19 p.m.
Representatives McCarty, Schrage, Snyder, Nelson, Kaufman,
Fields, and Spohnholz were present at the call to order.
HB 220-RETIREMENT SYSTEMS; DEFINED BENEFIT OPT.
5:20:28 PM
CO-CHAIR SPOHNHOLZ announced that the first order of business
would be HOUSE BILL NO. 220, "An Act relating to the Public
Employees' Retirement System of Alaska 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 of Alaska and
the teachers' retirement system; and providing for an effective
date."
5:21:16 PM
REPRESENTATIVE HOPKINS, Alaska State Legislature, commented that
the bill represents an option and would simply impact
individuals who became a member of Public Employees' Retirement
System (PERS) Tier III or Teachers' Retirement System (TRS) Tier
IV from 2006 on. He said that the structure is said to be cost-
neutral to the state.
5:22:43 PM
REPRESENTATIVE KAUFMAN shared his understanding that the premise
of HB 220 is to respond to a "gap" that was created. He asked
Representative Hopkins whether this legislation aims to close
the gap in terms of retirements plans to ensure that workers are
"made whole."
REPRESENTATIVE HOPKINS responded that, if a member of the
PERS/TRS system doesn't want to switch from a defined
contribution to a defined benefit system, there is language in
the legislation that would allow those individuals to cash out
their 401k and purchase their time to "be made whole" in that
sense. He shared that there is a calculator being made to
better look at those numbers. He said that the more significant
gap that the legislation looks to fill is the growing gap in
retention and recruitment of public safety and educators in the
state. He relayed feedback that the lack of a defined benefit
system is responsible for this gap.
REPRESENTATIVE KAUFMAN asked whether there's a comprehensive
survey to determine what might be causing the retention issue.
REPRESENTATIVE HOPKINS responded yes, in May [2021], there was
an educator retention and recruitment study done by the State of
Alaska Governor Mike Dunleavy Administration, and there's
another one ongoing, both looking at the reason for these
issues. He relayed that the lack of defined benefits was the
number three reason, preceded by salary and benefits, which are
locally negotiated and not a statewide issue.
REPRESENTATIVE KAUFMAN asked Representative Hopkins whether he
has received the fiscal analysis yet for the bill.
5:26:39 PM
CO-CHAIR SPOHNHOLZ responded that the House Finance Committee
would be responsible for that information.
REPRESENTATIVE HOPKINS agreed, and said that there is a group
putting together funding that is going to run an actuarial study
for the House Finance Committee to ensure that the structure is
cost-neutral to the state. He added that, while the fiscal note
is indeterminate, the largest impact would be paying the
salaries for employees to answer the phones to answer questions
from individuals who would like to switch from a defined benefit
to defined contribution plan.
5:27:34 PM
CO-CHAIR SPOHNHOLZ added that the aforementioned survey results
found that the first reason was cost of living, then salary,
then retirement.
5:27:58 PM
REPRESENTATIVE MCCARTY, regarding the potential retroactive
component of the bill, asked Representative Hopkins to clarify
whether there would not be backpay from 2006 on.
REPRESENTATIVE HOPKINS responded that 2006 is when the Tier III
PERS and Tier IV TRS systems were established. He said that the
bill would only impact employees from 2006 on, which is why that
year is in the bill.
REPRESENTATIVE MCCARTY asked whether a Tier IV employee could
cash in Tier IV benefits and transition to a defined benefit
system.
REPRESENTATIVE HOPKINS responded, "More or less, yes."
REPRESENTATIVE MCCARTY shared his understanding that there is
language that implies an insurance format plan that would make
it so that an employee's dependents would be able to continue
getting benefits should the employee pass away. He asked
whether this is accurate.
REPRESENTATIVE HOPKINS responded that it is not an insurance
policy. He agreed that currently, if a person passes away and
has a 401k, the spouse would receive the 401k. He said that the
surviving spouse would get both the contributions from the
employer and from the employee. He shared that he made a policy
decision in crafting the bill to use that same structure in HB
220.
5:31:53 PM
CO-CHAIR FIELDS, in response to Representative Kaufman's
questions, explained that the lack of defined benefits also is
the number one issue responsible for Alaska State Trooper
retention as well. He shared his understanding that due
diligence has been done and will continue to be done to ensure
that the bill is cost neutral.
5:32:50 PM
REPRESENTATIVE MCCARTY asked Representative Hopkins about the
difference in contribution percentage levels for different
individuals. He asked for the reason for these differences.
REPRESENTATIVE HOPKINS responded that the percentages differ due
to age. He said that public employees are required to have 30
years of service or be 60 years of age, which means that these
employees are working longer than teachers and need to put in a
smaller percentage of their salary to reach the same amount of
invested money. He added that teachers need to put in more per
paycheck because teachers are able to retire after 25 years of
service, or at age 55.
5:34:45 PM
REPRESENTATIVE KAUFMAN shared his understanding that the
aforementioned survey shows that a defined benefit plan would be
preferred. He asked Representative Hopkins why the focus is on
benefits rather than teachers' pay considering that the survey
found that pay was a more significant reason for difficulty in
recruitment and retention.
REPRESENTATIVE HOPKINS responded that there was a study funded
by the legislature in 2016 that looked at what a statewide
salary schedule would look like for teachers. He said that some
of those salaries would have been double or triple what teachers
are currently being paid, particularly in remote villages. He
said some salaries would've been around $200,000. He said that
was seen by the legislature as generally not feasible. He
explained that that is why he did not look at legislating
statewide salary schedules for teachers, because it would have
been untenable to make it commensurate to hire someone in rural
villages at the same level as individuals in larger cities.
REPRESENTATIVE KAUFMAN shared his concern that there has been a
high failure rate for defined benefit plans due to the perceived
future obligation placed upon the state. He asked whether
Representative Hopkins feels that HB 220 proposes a different
system from the ones that have failed.
REPRESENTATIVE HOPKINS responded yes, and added that Alaska is
the only state that doesn't have an option for a defined benefit
plan. He said that the biggest reason the defined benefit
program got "out of control" is not included in the proposed
legislation, and that that is what has been done in an effort to
not make future Alaskans responsible for unsustainable funds.
5:38:40 PM
REPRESENTATIVE NELSON asked Representative Hopkins whether he
expects the state to run into the same problems in the future,
should this bill pass.
REPRESENTATIVE HOPKINS responded no because he hopes the state
learned its lesson with the actuaries. He added that since it's
been over 40 years since Alaska established the Tier I system,
there have been four iterations of the system, and this would be
the fifth. He noted that the majority of PERS and TRS payments
that are required for employees are for the people that have
already retired. He said that the state has a closed system,
which means there will be no additional people contributing to
the pension fund.
5:40:26 PM
CO-CHAIR SPOHNHOLZ commented that there are a few provisions
that prevent the same problems as the state experienced in the
past with obligations that were beyond affordability. She
shared her understanding that that had to do with bad actuarial
analysis. She shared her understanding that the structure of
the bill had been changed to ensure that if a person's pension
was underfunded, then the obligation to pay increases moving
forward. She noted that public employees are "hemorrhaging" in
a way that's dangerous to the state. She relayed that there are
divisions in the state with 20 percent vacancy rates. She
highlighted that it's important to attract and retain public
employees for the health of the state.
5:42:04 PM
REPRESENTATIVE MCCARTY asked if this could become similar to a
life or health insurance program if there was a disability or
death. He asked what kind of responsibility an individual has
on the job.
REPRESENTATIVE HOPKINS responded that the responsibility of
employees is to maintain their jobs. He clarified that a person
wouldn't get 30 years credit in a position if that person only
worked for 15 years. He explained that the surviving spouse
wouldn't be overdrawing from the fund for work that did not
occur. He added that the fund would remain solvent for the
amount of time worked. He said that he doesn't see it as life
insurance, but as retirement.
5:44:59 PM
CO-CHAIR FIELDS moved to report HB 220 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 220 was reported from the House
Labor and Commerce Standing Committee.
5:45:14 PM
The committee took an at-ease from 5:45 p.m. to 5:48 p.m.
HB 159-CONSUMER DATA PRIVACY ACT
5:48:35 PM
CO-CHAIR SPOHNHOLZ announced that the final order of business
would be HOUSE BILL NO. 159, "An Act establishing the Consumer
Data Privacy Act; establishing data broker registration
requirements; making a violation of the Consumer Data Privacy
Act an unfair or deceptive trade practice; and providing for an
effective date."
5:48:49 PM
CO-CHAIR FIELDS stated that amendments are being drafted.
5:49:19 PM
REPRESENTATIVE KAUFMAN noted the complicated nature of the bill.
5:49:42 PM
CO-CHAIR SPOHNHOLZ opened public testimony on HB 159.
5:49:51 PM
ROBERT WOODY, American Property Casualty Insurers
Association(APCIA), noted that he works with a coalition of
insurance trade associations, including the National Association
of Mutual Insurance Companies(NAMIC) and the American Council of
Life Insurers (ACLI). He highlighted that insurance consumers
are already protected by a strict privacy and regulatory regime
by the Gramm-Leach-Bliley Act (GLBA). In addition to protecting
consumer privacy, he continued, Alaska's insurance regulation
requires insurers to have a comprehensive written plan to
protect the security and confidentiality of data against threats
and unauthorized access. He said that GLBA was enacted over
twenty years ago, and expressed that it is working well to
protect consumers. He said that the goal of a GLBA exemption
is to ensure that insurers and consumers are not subject to a
"patchwork" of state and federal laws because it's difficult to
understand and accommodate. He suggested that a single set of
privacy rules would be simpler. He noted that the coalition
submitted a letter to the committee [hard copies included in the
committee packet] with a suggestion on the wording of the
exemption, and he expressed that the coalition hopes the
committee takes this into consideration. He said that the
coalition is also concerned about the private right of action.
5:54:38 PM
MAYA MCKENZIE, Technology Policy Council, Entertainment Software
Association, testified in opposition to HB 159. She said that
state privacy legislation should not conflict with existing
children's privacy laws. She stated that while she doesn't
support the bill, she supports some additional amendments. She
suggested that the bill should clarify that a business shouldn't
process data from a consumer under the age of 13, unless
provided by the Children's Online Privacy Protection Act
(COPPA). She shared her understanding that the proposed
legislation deviates from COPPA's standard for determining age,
and suggested that AS 45.48.845(b) be deleted from the bill.
She expressed that failing to remove this section would create
unnecessary confusion. Finally, she suggested an amendment to
clarify that parental consent that is obtained, as provided by
COPPA, would be sufficient consent under the bill. She said
that this would ensure that existing practices would not "run
afoul" of state law.
5:57:37 PM
ANTON VAN SEVENTER, Council, State Privacy and Security
Coalition, testified in opposition to HB 159. He shared his
understanding that the bill contains "outlier requirements" that
are found in no other state law and could lead to confusion. He
highlighted the proposed requirement for businesses to comply
with global privacy control, which he said would create
technical impracticalities and would "undermine consumer
choice." He shared his understanding that the global privacy
control doesn't reflect the aims of the proposed legislation.
He said the bill would prevent consumers from actively choosing
to permit certain sites to collect or disclose information. He
highlighted the "underlying" private right of action component
of the bill, which he said have been shown to fail to compensate
consumers, even when a violation has been shown. He expressed
that the bill also includes "vague and overbroad" definitions,
and suggested that the bill's language be clarified and updated.
6:00:25 PM
ALYSSA DOOM, Computer & Communications Industry
Association(CCPIA), testified in opposition to HB 159. She
explained that CCPIA is a non-profit that represents small to
large communication and technology firms. She emphasized that
CPIA supports a uniform approach to technology legislation to
promote regulatory certainty. She said that CCPIA has concerns
about adopting legislation that is specific to each state, which
she opined would contribute to the "patchwork" of laws.
6:02:12 PM
DAVID EDMONSON, Vice President of State Policy and Government
Relations, TechNet, testified in opposition to HB 159. He
expressed that the technology industry is committed to consumer
privacy and promoting consumer choice in determining how data is
used. He said that TechNet supports a uniform standard and
responsibilities for all Americans. He agreed that each state
having its own laws will contribute to a steep compliance cost
and consumer confusion. He expressed concern about the private
right of action that is proposed by HB 159, which he said could
cause "enormous liability."
6:04:45 PM
CO-CHAIR SPOHNHOLZ, after ascertaining that there was no one
else who wished to testify, closed public testimony on HB 159.
CO-CHAIR SPOHNHOLZ announced that HB 159 was held over.
6:06:08 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
6:06 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 220 - SSA_Windfall Elimination Provision.pdf |
HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB220 Sectional Analysis ver. A 11.5.21.pdf |
HL&C 11/8/2021 4:00:00 PM HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB220 Sponsor Statement 11.5.21.pdf |
HL&C 11/8/2021 4:00:00 PM HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB220 ver. A 11.5.21.PDF |
HL&C 11/8/2021 4:00:00 PM HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB 220 Fiscal Note DOA.pdf |
HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB 220 Testimony - Received as of 1.18.2022.pdf |
HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB 220 Testimony - Received as of 1.19.2022.pdf |
HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB220 Hopkins Slides Bill Overview 11.5.21.pdf |
HL&C 11/8/2021 4:00:00 PM HL&C 1/19/2022 3:15:00 PM HL&C 1/26/2022 5:15:00 PM |
HB 220 |
| HB 159 Letter in Opposition - Joint Ad Trade 1.25.22.pdf |
HL&C 1/26/2022 5:15:00 PM |
HB 159 |
| HB 159 ACLI-APCIA-NAMIC Joint Trades Comment 1.25.22.pdf |
HL&C 1/26/2022 5:15:00 PM |
HB 159 |
| HB 159 BSA Comment 12.6.2021.pdf |
HL&C 1/26/2022 5:15:00 PM |
HB 159 |
| HB 220 Testimony - Received as of 1.25.2022.pdf |
HL&C 1/26/2022 5:15:00 PM |
HB 220 |