Legislature(1993 - 1994)

02/09/1993 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                        February 9, 1993                                       
                            8:00 a.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Al Vezey, Chairman                                            
  Representative Pete Kott, Vice Chairman                                      
  Representative Harley Olberg                                                 
  Representative Gary Davis                                                    
  Representative Fran Ulmer                                                    
  Representative Bettye Davis                                                  
  Representative Jerry Sanders                                                 
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  None                                                                         
                                                                               
  OTHER HOUSE MEMBERS PRESENT                                                  
                                                                               
  Representative Terry Martin                                                  
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  *HCR 5:   Relating to the twenty-fifth annual Girls' State.                  
                                                                               
            MOVED OUT OF COMMITTEE WITH A DO PASS                              
            RECOMMENDATION                                                     
                                                                               
  HJR 3:    Proposing amendments to the Constitution of the                    
            State of Alaska limiting tenure in the                             
            legislature.                                                       
                                                                               
            HELD IN COMMITTEE FOR FURTHER CONSIDERATION                        
                                                                               
  HB 35:    "An Act relating to deposits to the budget reserve                 
            fund."                                                             
                                                                               
            HELD IN COMMITTEE FOR FURTHER CONSIDERATION                        
                                                                               
  *HB 48:   "An Act relating to delayed payment of                             
            legislators' salaries, and to state agency                         
            operating and capital budgets; and providing for                   
            an effective date."                                                
                                                                               
            MOVED OUT OF COMMITTEE WITH A DO PASS                              
            RECOMMENDATION                                                     
                                                                               
  HB 36:    "An Act relating to retirement incentive programs                  
            for the public employees' retirement system, the                   
            teachers' retirement system, and certain persons                   
            under the judicial retirement system; and                          
            providing for an effective date."                                  
                                                                               
            HELD IN COMMITTEE FOR FURTHER CONSIDERATION                        
                                                                               
  (* first public hearing)                                                     
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  Jon Peterson, Legislative Aide                                               
   to Representative Gail Phillips                                             
  State Capitol, Room 216                                                      
  Juneau, AK  99811-1182                                                       
  465-3718                                                                     
  Position Statement: Testified on behalf of the sponsor in                    
                      support of HCR 5                                         
                                                                               
  Representative Terry Martin                                                  
  State Capitol, Room 411                                                      
  Juneau, AK  99811-1182                                                       
  465-3783                                                                     
  Position Statement: Prime Sponsor, HB 35                                     
                                                                               
  Representative Fran Ulmer                                                    
  State Capitol, Room 601 Court                                                
  Juneau, Alaska  99811-1182                                                   
  465-4947                                                                     
  Position Statement: Prime Sponsor, SSHB 48                                   
                                                                               
  Vernon Marshall, Executive Director                                          
  NEA, Alaska                                                                  
  114 2nd Street                                                               
  Juneau, AK  99811                                                            
  586-3080                                                                     
  Position Statement: Supported HB 36                                          
                                                                               
  Robert Stalnaker, Director                                                   
  Division of Retirement and Benefits                                          
  Department of Administration                                                 
  P.O. Box 110203                                                              
  Juneau, AK  99811-0203                                                       
  465-4470                                                                     
  Position Statement: Provided information on HB 36                            
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  HCR 5                                                                 
  SHORT TITLE: TWENTY-FIFTH ANNUAL GIRLS STATE                                 
  BILL VERSION:                                                                
  SPONSOR(S): REPRESENTATIVE(S) PHILLIPS,James,Toohey,Ulmer,                   
  Therriault, Grussendorf                                                      
                                                                               
  TITLE: Relating to the twenty-fifth annual Girls' State.                     
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/22/93       126    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/22/93       126    (H)   STATE AFFAIRS                                    
  02/09/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  BILL:  HJR  3                                                                
  SHORT TITLE: LIMITING TERMS OF LEGISLATORS                                   
  BILL VERSION:                                                                
  SPONSOR(S): REPRESENTATIVE(S) MARTIN,Kott                                    
                                                                               
  TITLE: Proposing amendments to the Constitution of the State                 
  of Alaska limiting tenure in the legislature.                                
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/04/93        22    (H)   PREFILE RELEASED                                 
  01/11/93        22    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/11/93        22    (H)   STATE AFFAIRS, JUDICIARY,                        
                              FINANCE                                          
  01/26/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/26/93              (H)   MINUTE(STA)                                      
  01/26/93              (H)   MINUTE(STA)                                      
  01/26/93              (H)   MINUTE(STA)                                      
  01/26/93              (H)   MINUTE(STA)                                      
  01/30/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/30/93              (H)   MINUTE(STA)                                      
  02/06/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  02/09/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  BILL:  HB  35                                                                
  SHORT TITLE: DEPOSITS TO THE BUDGET RESERVE FUND                             
  BILL VERSION:                                                                
  SPONSOR(S): REPRESENTATIVE(S) MARTIN,Therriault                              
                                                                               
  TITLE: "An Act relating to deposits to the budget reserve                    
  fund."                                                                       
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/04/93        33    (H)   PREFILE RELEASED                                 
  01/11/93        33    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/11/93        33    (H)   STATE AFFAIRS, JUDICIARY,                        
                              FINANCE                                          
  01/26/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/26/93              (H)   MINUTE(STA)                                      
  01/30/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/30/93              (H)   MINUTE(STA)                                      
  02/06/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  02/09/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  BILL:  HB 48                                                                 
  SHORT TITLE: DELAYED PAYMENT OF LEGISLATORS' SALARIES                        
  BILL VERSION: SSHB 48                                                        
  SPONSOR(S): REPRESENTATIVE(S) ULMER,Navarre,B.Davis,Carney,                  
  Nordlund                                                                     
                                                                               
  TITLE: "An Act relating to delayed payment of legislators'                   
  salaries, and to state agency operating and capital budgets;                 
  and providing for an effective date."                                        
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/13/93        52    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/13/93        52    (H)   STATE AFFAIRS, JUDICIARY,                        
                              FINANCE                                          
  01/14/93        62    (H)   COSPONSOR(S): B.DAVIS                            
  01/20/93       117    (H)   COSPONSOR(S): CARNEY                             
  01/25/93       151    (H)   SPONSOR SUBSTITUTE INTRODUCED-                   
                              REFERRALS                                        
  01/25/93       152    (H)   STATE AFFAIRS, JUDICIARY,                        
  FINANCE                                                                      
  01/27/93       168    (H)   COSPONSOR(S): NORDLUND                           
  02/09/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  BILL:  HB 36                                                                 
  SHORT TITLE: RETIREMENT INCENTIVE PROGRAM                                    
  BILL VERSION:                                                                
  SPONSOR(S): REPRESENTATIVE(S) MACKIE,Hudson,Ulmer,B.Davis,                   
  Brice                                                                        
                                                                               
  TITLE: "An Act relating to retirement incentive programs for                 
  the public employees' retirement system, the teachers'                       
  retirement system, and certain persons under the judicial                    
  retirement system; and providing for an effective date."                     
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/08/93        33    (H)   PREFILE RELEASED                                 
  01/11/93        33    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/11/93        33    (H)   STATE AFFAIRS, LABOR & COMMERCE,                 
                              FINANCE                                          
  01/28/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/28/93              (H)   MINUTE(STA)                                      
  01/28/93              (H)   MINUTE(STA)                                      
  01/29/93       182    (H)   COSPONSOR(S): HUDSON- FIRST                      
                              COSPONSOR                                        
  01/29/93       182    (H)   COSPONSOR(S): B.DAVIS, BRICE                     
  01/30/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/30/93              (H)   MINUTE(STA)                                      
  01/30/93              (H)   MINUTE(STA)                                      
  02/04/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  02/06/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  02/09/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 93-15, SIDE A                                                           
  Number 000                                                                   
                                                                               
  The ninth meeting of the House State Affairs Committee was                   
  called to order at 8:01 a.m. on Tuesday, February 9, 1993,                   
  by Chairman Vezey.  He noted a quorum was present.                           
  HCR 5: TWENTY-FIFTH ANNUAL GIRLS STATE                                       
                                                                               
  CHAIRMAN AL VEZEY read the title of HCR 5 and asked if Jon                   
  Peterson would like to discuss the resolution on behalf of                   
  Representative Gail Phillips, its prime sponsor.                             
                                                                               
  Number 045                                                                   
                                                                               
  JON PETERSON, LEGISLATIVE AIDE FOR REPRESENTATIVE GAIL                       
  PHILLIPS spoke in support of HCR 5 for the prime sponsor.                    
                                                                               
  Number 072                                                                   
                                                                               
  REPRESENTATIVE GARY DAVIS MOVED to pass out HCR 5.  Roll                     
  call was taken with five yeas and two absent legislators not                 
  voting.                                                                      
  HJR 3: LIMITING TERMS OF LEGISLATORS                                         
  HB 35: DEPOSITS TO THE BUDGET RESERVE FUND                                   
                                                                               
  Number 090                                                                   
                                                                               
  CHAIRMAN VEZEY said the committee substitute for HJR 3 was                   
  not accurate, so he moved on to HB 35.                                       
                                                                               
  Number 117                                                                   
                                                                               
  REPRESENTATIVE TERRY MARTIN, PRIME SPONSOR of HB 35,                         
  discussed the budget reserve fund.  He asked the date be                     
  amended to December 16.                                                      
                                                                               
  Number 156                                                                   
                                                                               
  CHAIRMAN VEZEY stated for the record that Representative                     
  Fran Ulmer joined the meeting at 8:09 a.m.  He asked for a                   
  roll call vote to adopt the HB 35 amendment.  Roll call was                  
  taken with five yeas, one abstained, and one absent.                         
  HJR 3: LIMITING TERMS OF LEGISLATORS                                         
                                                                               
  Number 190                                                                   
                                                                               
  REPRESENTATIVE PETE KOTT suggested the committee should wait                 
  to discuss HJR 3 until the committee substitute was                          
  accurate.                                                                    
                                                                               
  SSHB 48: DELAYED PAYMENT OF LEGISLATORS' SALARIES                            
                                                                               
  Number 200                                                                   
                                                                               
  REPRESENTATIVE FRAN ULMER, PRIME SPONSOR of SSHB 48, stated                  
  the purpose of the bill was to create an incentive for the                   
  legislature to complete the operating budget in a more                       
  timely manner.  Until the budget passed no legislators would                 
  be paid.  She shared her frustration with the bottleneck in                  
  the finance committee toward the end of session which                        
  interfered with the process of getting a bill to pass each                   
  year.  She believed SSHB 48 would help the operating budget                  
  bill to pass more quickly.                                                   
                                                                               
  Number 257                                                                   
                                                                               
  CHAIRMAN VEZEY asked if SSHB 48 would confiscate or just                     
  delay the payment to each legislator.                                        
                                                                               
  REPRESENTATIVE ULMER responded it would be a legal problem                   
  if the legislator's income was confiscated, so SSHB 48 would                 
  be to delay payment only.                                                    
                                                                               
  Number 269                                                                   
                                                                               
  CHAIRMAN VEZEY asked if delaying a check of $400.00 per week                 
  would really be an incentive.                                                
                                                                               
  Number 274                                                                   
                                                                               
  REPRESENTATIVE ULMER said any incentive would be helpful                     
  because rules and guidelines were being ignored.  Maybe the                  
  public would give more attention if, by the 90th day, the                    
  capital budget was not done, she added.                                      
                                                                               
  (Chairman Vezey stated Representative Bettye Davis joined                    
  the committee at 8:15 a.m.)                                                  
                                                                               
  Number 292                                                                   
                                                                               
  REPRESENTATIVE ULMER discussed the changes in SSHB 48 on                     
  line 12 page 2.  The Governor must submit the budget to the                  
  legislature by the 45th day instead of the 60th day, she                     
  noted.                                                                       
                                                                               
  Number 306                                                                   
                                                                               
  REPRESENTATIVE KOTT did not believe the $400 would be a                      
  strong enough incentive, but felt the limitation might                       
  pressure the budget to be done in an untimely manner.  This                  
  incentive affected the $400 salary only and no other funds,                  
  he pointed out.                                                              
                                                                               
  Number 324                                                                   
                                                                               
  REPRESENTATIVE HARLEY OLBERG asked why withholding the                       
  salary was not limited to members of the Finance Committee                   
  only.                                                                        
                                                                               
  Number 329                                                                   
                                                                               
  REPRESENTATIVE ULMER said the influence on members of the                    
  committee from peer pressure would also be an incentive.                     
                                                                               
  Number 340                                                                   
                                                                               
  CHAIRMAN VEZEY asked about the intent of 30 days being set                   
  aside for non-budget attention.                                              
                                                                               
  Number 344                                                                   
                                                                               
  REPRESENTATIVE ULMER said bills with fiscal notes and the                    
  operating budget would get crunched together.  There would                   
  be better decision making if the operating budget was                        
  completed first, and less leverage against legislators and                   
  their bills would streamline the process, she added.                         
                                                                               
  Number 364                                                                   
                                                                               
  REPRESENTATIVE KOTT asked if the change to a 90 day session                  
  from a 120 day session would automatically change this                       
  problem.                                                                     
                                                                               
  Number 370                                                                   
                                                                               
  REPRESENTATIVE ULMER said there would still be a crunch in                   
  the Finance Committee.  By pacing legislators to break up                    
  the duties early in the session, things would be better                      
  organized, she believed.                                                     
                                                                               
  Number 381                                                                   
                                                                               
  REPRESENTATIVE GARY DAVIS applauded any effort to improve                    
  the system.  To delay salary payment might not be effective                  
  but the message was good and might help the legislative                      
  image, he believed.  He had thought of ways to improve the                   
  legislative process but wanted to wait a while to introduce                  
  his ideas.  He wanted to see the response of other                           
  legislators to SSHB 48.                                                      
                                                                               
  Number 412                                                                   
                                                                               
  REPRESENTATIVE OLBERG said the money was symbolic, but the                   
  media could hold the legislature's "feet to the fire."  He                   
  shared his frustration with the system and hoped to see                      
  SSHB 48 move out of committee.                                               
                                                                               
  Number 424                                                                   
                                                                               
  CHAIRMAN VEZEY discussed the interest paid for withholding                   
  legislative salaries for 30 days would total less than $600                  
  for all legislators as compared to $8 million spent annually                 
  on lobbying.                                                                 
                                                                               
  Number 431                                                                   
                                                                               
  REPRESENTATIVE KOTT asked the committee to MOVE SSHB 48.                     
  Roll call was taken with a unanimous yes vote.                               
  HB 36: RETIREMENT INCENTIVE PROGRAM                                          
                                                                               
  Number 443                                                                   
                                                                               
  CHAIRMAN VEZEY spoke on the following handouts:                              
                                                                               
       "State of Alaska, Department of Revenue, Division of                    
       Treasury, Teachers Retirement Trust Fund, Financial                     
       Statements, October 31, 1992;" "State of Alaska,                        
       Department of Revenue, Division of Treasury, Public                     
       Employees Retirement Trust Fund, Financial Statements,                  
       October 31, 1992;" "State of Alaska Judicial Retirement                 
       System, Financial Statements and Supplemental                           
       Schedules, June 30, 1992 and 1991, with independent                     
       auditors' report thereon by KPMG Peat Marwick;" "State                  
       of Alaska Teachers' Retirement System, Financial                        
       Statements and Supplemental Schedules, June 30, 1992                    
       and 1991, with independent auditors' report thereon by                  
       KPMG Peat Marwick;" "State of Alaska Public Employees'                  
       Retirement System, Financial Statements and                             
       Supplemental Schedules, June 30, 1992 and 1991, with                    
       independent auditors' report thereon by KPMG Peat                       
       Marwick;" and, "ALASKA, Public Employees' Retirement                    
       System, Teachers' Retirement System, Component Unit,                    
       Annual Financial Report, Fiscal Year Ended June 30,                     
       1992, Walter J. Hickel, Governor."                                      
                                                                               
  These handouts were in the committee packet regarding                        
  financial statements and actuarial reports within the                        
  retirement funds.                                                            
                                                                               
  Number 605                                                                   
                                                                               
  VERNON MARSHALL, EXECUTIVE DIRECTOR, NEA ALASKA, spoke in                    
  support of HB 36 because of reduced personnel costs.  His                    
  written statement was included in the packet.                                
                                                                               
  TAPE 93-15, SIDE B                                                           
  Number 000                                                                   
                                                                               
  CHAIRMAN VEZEY responded to Mr. Marshall's statements                        
  regarding the savings based on teacher contribution.                         
                                                                               
  MR. MARSHALL discussed the net savings of the first and                      
  second Retirement Incentive Program (RIP), for the Anchorage                 
  School District.                                                             
                                                                               
  Number 067                                                                   
                                                                               
  CHAIRMAN VEZEY discussed the total cost of the pension                       
  system funds being a one time cost over a three year period.                 
                                                                               
  Number 075                                                                   
                                                                               
  MR. MARSHALL said the cost to employers was $6.3 million.                    
  References were made to the handout by Mr. Marshall.                         
                                                                               
  Number 110                                                                   
                                                                               
  CHAIRMAN VEZEY talked about the employer having total                        
  discretion to calculate savings.  The estimate to be saved                   
  and actual payment had a disparity in numbers.                               
                                                                               
  MR. MARSHALL discussed the disparity and costs for the                       
  school district which utilized the RIP.                                      
                                                                               
  Number 182                                                                   
                                                                               
  CHAIRMAN VEZEY said a lot of dollars were at stake and the                   
  program would continue to be looked into.                                    
                                                                               
  Number 190                                                                   
                                                                               
  ROBERT STALNAKER, DIRECTOR, DIVISION OF RETIREMENT AND                       
  BENEFITS, DEPARTMENT OF ADMINISTRATION, discussed the two                    
  past RIP costs to employees and the formula used.  The                       
  employer cost fluctuates, and the burden of utilizing the                    
  program was on the employer, he said.                                        
                                                                               
  Number 228                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked what the unfunded balance                      
  meant.                                                                       
                                                                               
  MR. STALNAKER discussed the unfunded liability and funded                    
  liability.  The balance was calculated over 25 years and the                 
  assumptions of savings and costs were on the employer, he                    
  said.  References were made to reports within the committee.                 
                                                                               
                                                                               
  Number 282                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked if the system had been changed                 
  over time.                                                                   
                                                                               
  MR. STALNAKER explained the history of the changes within                    
  the system relating to cost of living increases.  He also                    
  discussed cost containment.                                                  
                                                                               
  Number 351                                                                   
                                                                               
  CHAIRMAN VEZEY discussed the differences in the unfunded and                 
  funded actual amounts found within the financial reports of                  
  the teachers and public employees.                                           
                                                                               
  MR. STALNAKER discussed the components of the 1992 report                    
  titled "Alaska."  Discussion continued regarding all the                     
  reports found in the committee members packets.  The topics                  
  of discussion included fluctuations, assumptions,                            
  contribution rates, financial projections of debt, unfunded                  
  liabilities, and funding ratios.                                             
                                                                               
  TAPE 93-16, SIDE A                                                           
  Number 191                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked if the RIP imposed employee                    
  turn over.                                                                   
                                                                               
  MR. STALNAKER replied in the affirmative.                                    
                                                                               
  Number 217                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked what effects economy changes                   
  would make to RIP.                                                           
                                                                               
  MR. STALNAKER said any fluctuation would change the                          
  projected liability.                                                         
                                                                               
  Number 231                                                                   
                                                                               
  CHAIRMAN VEZEY asked if "what if" projections could be                       
  created, analyzed and reported back to the committee.                        
                                                                               
  Number 243                                                                   
                                                                               
  MR. STALNAKER replied in the affirmative.                                    
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  Number 245                                                                   
  CHAIRMAN VEZEY adjourned the meeting at 9:55 a.m., and HB 36                 
  was held over for further consideration.                                     

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