Legislature(2005 - 2006)

02/06/2006 09:08 AM House W&M


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09:08:36 AM Start
09:08:44 AM HB375
09:15:19 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
           HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS                                                                          
                        February 6, 2006                                                                                        
                           9:08 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bruce Weyhrauch, Chair                                                                                           
Representative Ralph Samuels                                                                                                    
Representative Peggy Wilson                                                                                                     
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Norman Rokeberg                                                                                                  
Representative Paul Seaton                                                                                                      
Representative Carl Moses                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 375                                                                                                              
"An Act relating to the  retirement benefit liability account and                                                               
appropriations  from  that  account;   relating  to  deposits  of                                                               
certain income earned  on money received as a result  of State v.                                                               
Amerada  Hess, et  al., 1JU-77-847  Civ.  (Superior Court,  First                                                               
Judicial District); and providing for an effective date."                                                                       
                                                                                                                                
     - MOVED CSHB 375(W&M) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 374                                                                                                              
"An  Act  relating  to  establishment  of  a  retirement  benefit                                                               
liability account  in the Department  of Revenue  and redirecting                                                               
deposit  of  annual  dividends  of  the  Alaska  Housing  Finance                                                               
Corporation  to  that account;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 375                                                                                                                  
SHORT TITLE: RETIREMENT BENEFIT LIABILITY ACCT/PF                                                                               
SPONSOR(S): WAYS & MEANS                                                                                                        
                                                                                                                                
01/17/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        

01/17/06 (H) W&M, STA, FIN

01/20/06 (H) W&M AT 9:00 AM CAPITOL 106

01/20/06 (H) Heard & Held

01/20/06 (H) MINUTE(W&M)

01/25/06 (H) W&M AT 9:00 AM CAPITOL 106

01/25/06 (H) Heard & Held

01/25/06 (H) MINUTE(W&M)

01/27/06 (H) W&M AT 9:00 AM CAPITOL 106

01/27/06 (H) Heard & Held

01/27/06 (H) MINUTE(W&M)

01/30/06 (H) W&M AT 9:30 AM CAPITOL 106

01/30/06 (H) Heard & Held

01/30/06 (H) MINUTE(W&M) 02/01/06 (H) W&M AT 9:00 AM CAPITOL 106 02/01/06 (H) <Bill Hearing Canceled> 02/03/06 (H) W&M AT 9:00 AM CAPITOL 106 02/03/06 (H) <Bill Hearing Canceled> 02/06/06 (H) W&M AT 9:00 AM CAPITOL 106 WITNESS REGISTER JERRY BURNETT, Legislative Liaison Department of Revenue Juneau, Alaska POSITION STATEMENT: During hearing of HB 375, answered questions. ACTION NARRATIVE CHAIR BRUCE WEYHRAUCH called the House Special Committee on Ways and Means meeting to order at 9:08:36 AM. Representatives Weyhrauch, Gruenberg, Samuels, and Wilson were present at the call to order. HB 375-RETIREMENT BENEFIT LIABILITY ACCT/PF 9:08:44 AM CHAIR WEYHRAUCH announced that the only order of business would be HOUSE BILL NO. 375, "An Act relating to the retirement benefit liability account and appropriations from that account; relating to deposits of certain income earned on money received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District); and providing for an effective date." 9:08:59 AM REPRESENTATIVE SAMUELS moved to adopt the committee substitute (CS) for HB 375, Version 24-LS1467\Y, as the working document. There being no objection, Version Y was before the committee. CHAIR WEYHRAUCH explained that HB 374 and HB 375 were set up as separate mechanisms to appropriate money from the Alaska Housing Finance Corporation (AHFC) dividend, and from the interest on the Amerada Hess fund and the Alaska Permanent Fund with dividends from these accounts going into a retirement benefit liability account. Version Y strips away everything related to AHFC, Amerada Hess, and the Alaska Permanent Fund and simply establishes a liability account. CHAIR WEYHRAUCH pointed out that this account is similar to the public education account established previously by the legislature and enables the appropriating authority for the legislature. He reminded the committee and the public that the legislature can't establish a dedicated account or dedicate funds, with the exception of the permanent fund, as this would be unconstitutional; however, Version Y gives the legislature the authority to appropriate into this [liability] account for the Public Employees' Retirement System /Teachers' Retirement System (PERS/TRS) and set up the mechanisms to make those appropriations. CHAIR WEYHRAUCH explained that Version Y addressed a section of the original bill, which contained language stating that the money appropriated from the [liability] account would go toward paying past service liabilities of the PERS/TRS and "for other purposes" which was not specific enough and so removed. 9:11:25 AM JERRY BURNETT, Legislative Liaison, Department of Revenue (DOR), in response to questions by Chair Weyhrauch, said the DOR doesn't "have a position on whether or not [establishing a liability account] is a good idea" and, in fact, would suggest the Finance Committee review the bill to determine the source of funding. He also said that in terms of a fiscal note, there is nothing in Version Y that would create a new operating expense. 9:11:56 AM REPRESENTATIVE GRUENBERG suggested the word "annually", on page 1, line 12, was misleading. He explained it might be interpreted as meaning once a year. 9:12:36 AM REPRESENTATIVE GRUENBERG moved to adopt Amendment 1, as follows: Page 1, line 12: Delete "annually" There being no objection, Amendment 1 was adopted. CHAIR WEYHRAUCH informed Representative Gruenberg the bill would go next to the House State Affairs Standing Committee. 9:13:36 AM CHAIR WEYHRAUCH, upon determining no one else wished to testify, closed public testimony. 9:13:42 AM REPRESENTATIVE SAMUELS moved to report CSHB 375, Version 24- LS1467\Y, as amended, out of committee with individual recommendations. 9:13:52 AM REPRESENTATIVE GRUENBERG objected, and then asked if there is any policy reason why the bill is not a good idea. 9:13:59 AM CHAIR WEYHRAUCH stated his belief that this is an important policy decision for the legislature to make on an ongoing basis to help reduce the debt liability. 9:14:21 AM REPRESENTATIVE GRUENBERG removed his objection. 9:14:29 AM CHAIR WEYHRAUCH asked if there were any further objections. There being none, CSHB 375(W&M) was reported from the House Special Committee on Ways and Means. 9:15:06 AM CHAIR WEYHRAUCH, in answer to a question asked by Representative Gruenberg, explained that [HB 374] would not be heard at this meeting because of the policy implications associated with taking revenue from the Amerada Hess account and dividend from the AHFC and transferring these funds into the retirement benefit liability account. The appropriation mechanisms, he said, would be dealt with at a later time. 9:15:19 AM ADJOURNMENT There being no further business before the committee, the House Special Committee on Ways and Means meeting was adjourned at 9:15 a.m.

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