Legislature(2021 - 2022)SENATE FINANCE 532
02/24/2022 09:00 AM Senate FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB151 | |
| SB173 | |
| SJR12 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 151 | TELECONFERENCED | |
| + | SB 173 | TELECONFERENCED | |
| + | SJR 12 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 24, 2022
9:02 a.m.
9:02:36 AM
CALL TO ORDER
Co-Chair Bishop called the Senate Finance Committee meeting
to order at 9:02 a.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman
Senator Donny Olson
Senator Natasha von Imhof
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Peter Micciche, Sponsor; Madison Govin, Staff to
Senator Micciche; Kris Curtis, Legislative Auditor, Alaska
Division of Legislative Audit; Jasmin Martin, Staff to
Senator Wilson; Keegan Farone, Staff to Senator
Wielechowski;
PRESENT VIA TELECONFERENCE
Dana Walukiewicz, Alcohol Beverage Board, Anchorage; Glen
Klinkhart, Interim Director, Alcohol and Marijuana Control
Office, Department of Commerce, Community and Economic
Development; Dr. David Logan, Executive Director, Alaska
Dental Society; David Nielson, Chair, Dental Board of
Examiners; Jayme Parker, Section Chief, Public Health
Laboratories, Division of Public Health, Department of
Health and Social Services; David Guttenberg, Former
Legislator, Fairbanks;
SUMMARY
SB 151-EXTEND ALCOHOLIC BEVERAGE CONTROL BOARD
SB 151 was HEARD and HELD in committee for further
consideration.
SB 173-DENTIST SPEC. LICENSE/RADIOLOGIC EQUIP
SB 173 was HEARD and HELD in committee for further
consideration.
SJR 12-SOCIAL SECURITY BENEFIT REDUCTION REPEAL
SJR 12 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO.151
"An Act extending the termination date of the
Alcoholic Beverage Control Board; and providing for an
effective date."
9:03:26 AM
Co-Chair Bishop relayed that this was the first hearing of
SB 151, and the intention of the committee was to hear the
bill, take public and invited testimony, and set the bill
aside.
9:03:56 AM
SENATOR PETER MICCICHE, SPONSOR, stated that SB 151
proposed a relatively simple board extension for the
Alcoholic Beverage Control (ABC) Board. He asserted that
the board was doing a good job although was faced with some
problems.
9:05:26 AM
MADISON GOVIN, STAFF TO SENATOR MICCICHE, explained that
the legislation would extend the termination date of the
board, which was set to sunset in 2022. She read from the
sponsor statement:
In accordance with the provisions of Title 24 and
Title 44, Legislative Audit reviewed the activities of
the ABC Board and determined the board is effectively
serving the public interest by controlling the
manufacture, barter, possession, and sale of alcoholic
beverages in the state.
Findings also included that board meetings were
conducted effectively, regulations were adopted to
implement statutory changes, and investigations were
conducted in a timely manner.
She urged committee support of the legislation and
introduced Kris Curtis.
9:06:57 AM
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, relayed that the Division of Legislative
Audit had completed an audit of the ABC Board (copy on
file). She detailed that the division had also conducted a
special audit of the boards licensing process. She directed
committee attention to the conclusions of the report
located on Page 9 of the audit:
Overall, the audit found that board meetings were
conducted effectively, regulations were adopted to
implement statutory changes, and investigations were
conducted in a timely manner. The audit also concluded
that the Alcohol and Marijuana Control Office's (AMCO)
operations were impeded by the lack of an automated
application process and significant vacancies.
Further, deficiencies in controls over processing
licensee fee refunds were identified.
In accordance with AS 44.66.010(a)(1), the board is
scheduled to terminate on June 30, 2022. We recommend
the legislature extend the board's termination date to
June 30, 2026, which is four years less than the
maximum allowed in statute. The reduced extension
reflects the need for more timely oversight to
evaluate the board's progress in addressing licensing
inefficiencies and filling vacancies.
Ms. Curtis pointed to Pages 14 and 15 of the audit, which
showed a schedule of licenses:
Based on data provided by Department of Commerce,
Community, and Economic Development (DCCED) staff, the
board issued 1,177 catering and special
event permits from July 1, 2019, through February 28,
2021. Testing of a sample of 25 permits found all were
issued according to statutes.
As shown in Exhibit 2, there were 1,867 active
licenses as of February 28, 2021.
In February 2021, AMCO staff issued approximately 300
temporary licenses for the license period ending
December 31, 2020, due to an application backlog that
was the result of limited staff resources. The
temporary licenses allowed
licensees to continue operating pending review of the
renewal applications. Auditors reviewed AMCO's
staffing during the audit period and found extensive
vacancies. Exhibit 3 displays staffing vacancies that
exceeded two months during the audit period.
Ms. Curtis stated that AMCO reported 7 staff positions
vacant for a total of 92 months from FY 18 through February
29, 2021. She shared that the reasons for the vacancies
included, not hiring due to uncertainty surrounding a
proposal to merge AMCO with the Division of Corporations,
Business, and Professional Licensing, not hiring due to the
unknown impact of the pandemic on the industry, and not
hiring for one position that was transferred form Fairbanks
to the Mat-Sue due to the inability to find workspace. She
said that the extended vacancies negatively impacted AMCOs
ability to support the ABC board, as well as the AMCO.
Ms. Curtis turned to Page 16 of the audit. She highlighted
3 of the 5 troublesome aspects of the application process:
Five main aspects of the application process were
found to delay or potentially delay license review,
approval, and/or issuance.
1. Application completeness and accuracy: License
requirements are complex, making the application
process complicated and inherently subject to error.
Further, the applications must be submitted manually.
As such, the applications are not subject to online
edits designed to help limit errors. Analysis of the
505 applications received during the audit period
found applications were incomplete and/ or inaccurate
at a rate of 96 percent for new applications and 97
percent for transfer applications. Once determined
deficient, the applications are sent back to the
applicants for correction. Returning applications
added, on average, 20 days to AMCO's review process.
4. Submittal of compliance information by applicable
entities: Approval of 48 percent of new applications
and 55 percent of transfer applications was delayed
due to protest by a local governing body or due to
waiting for receipt of compliance information (i.e.,
state fire marshal approval; building, zoning, or food
safety permits; or notice from creditors). Delays
associated with waiting for receipt of required
information added an average of 88 days for new
licenses and 35 days for transfer licenses.
5. Issuance of licenses by AMCO staff: The audit found
that AMCO staff issued new and transfer licenses an
average of 23 days and 28 days, respectively, after
all outstanding requirements were met.
9:10:14 AM
Ms. Curtis referenced five recommendations starting on page
27:
Recommendation No. 1:
The Department of Commerce, Community, and Economic
Development (DCCED) commissioner should ensure AMCO
staff
vacancies are filled in a timely manner and the AMCO
director should implement written licensing
procedures.
Recommendation No. 2:
The board should significantly enhance or replace its
licensing database and automate the application
process where possible.
Recommendation No. 3:
The board and AMCO director should strengthen
procedures for entering restricted purchasers in the
statewide database of written orders.
Recommendation No. 4:
The board and AMCO director should implement
procedures to ensure municipalities receiving refunds
of biennial license fees are actively enforcing
alcoholic beverage laws.
Recommendation No. 5:
The AMCO director should improve procedures and fill
vacancies in a timely manner to ensure refunds to
municipalities are appropriately reviewed.
9:12:58 AM
Ms. Curtis relayed that the responses to the audit were
found on page 47. Ms. Curtis summarized. The ABC Board's
response was found on page 49. She related that the chair
of the board strongly disagreed with the 4-year extension
and claimed that an early sunset would jeopardize the
publics trust and undermine confidence in the public
process. He believed that the finding s were not material
enough to warrant a reduced extension.
9:14:06 AM
Senator Hoffman asked whether the chairman of the board had
addressed Recommendation 3.
Ms. Curtis relayed that the chair had agreed with the
recommendations.
Senator Hoffman thought the finding was serious in nature.
Ms. Curtis stated that similar to the prior sunset audit,
it had been found that procedures were not strong. There
had been miscommunication between the court system and the
AMCO Office.
Senator Hoffman had the viewpoint that if the board did not
recognize the seriousness of the issue there would be a
need for corrective action, such as withholding per diem.
He thought that not addressing non-compliant individuals
was ignoring the problem.
Ms. Curtis noted that the commissioner reported that all 27
have now been entered into the database.
9:16:32 AM
Senator Olson asked the reason for vacancies not being
filled.
Ms. Curtis reiterated the reasons offered by the board. She
commented that there was an extreme number of vacancies,
and it was "fairly shocking."
Senator Olson asked whether there had been another time in
which there were as great a number of vacancies, or a time
when the board chair had so strongly disagreed with audit
recommendations.
Ms. Curtis relayed that over the previous 20 years the
board had received a 3 to 4-year extension multiple times.
She thought it was not surprising given the addition of the
Marijuana Control Board. She could not recall a time when a
board chair had so strongly disagreed with the
recommendations.
9:18:33 AM
Co-Chair Bishop recalled that Ms. Curtis had mentioned that
a position had been moved from Fairbanks to the Mat-Su. He
asked her to repeat the reference.
Ms. Curtis stated that one of the positions that was vacant
was because the position had been moved and they were
having trouble finding workspace in Mat-Su.
Co-Chair Bishop opened INVITED testimony.
9:19:22 AM
DANA WALUKIEWICZ, ALCOHOL BEVERAGE BOARD, ANCHORAGE (via
teleconference), spoke in favor of the bill and encouraged
the committee to consider extending the termination date
for 6 years. He stressed that the board did not dispute the
nature of the audit findings, but the overall
recommendation of a shortened term. He mentioned
Recommendation 3, and admitted it was an important step to
include offenders in the database. He drew attention to
page 30:
Additionally, due to miscommunication and turnover of
key agency staff, reports of convictions of AS
04.11.010 violations were not consistently provided by
the court system.
Mr. Walukiewicz explained that the issue stemmed from
several years prior when the previous director had not had
great communication with other agencies. He asserted that
and communication had improved dramatically under the new
director. He shared that all of the restricted purchasers
were now in the consistently updated database.
Mr. Walukiewicz mentioned the vacancy issue and the
reference to a possible merge of functions of the AMCO
office and the DCCED licensing division. He noted that the
matter was an administrative directive that was not
necessarily supported by the board. He related that the job
postings were being prepared, but not posted by the
appropriate parties in DCCED. He said that the issue was
resolved, and the positions were filled.
Mr. Walukiewicz explained that the communication and
cooperating with the department had improved. He pointed
out to the committee that subsequent to the audit period,
all staffing positions had been filled.
9:24:05 AM
Mr. Walukiewicz explained that 4 of the 5 recommendations
had been addressed before the report was published. He
noted that the board and AMCO did not dispute the need for
a new automated application processing system. The alcohol
application process was preformed by 3 people and was paper
based. He stressed that the board and the staff were in
full support of an automated system but did not have the
funds to implement such a system. He said there was funding
available contingent on the passage of SB 9. He stated that
a follow-up audit would be welcome and did not feel like
the issues in the current audit should limit the time of
the board. He felt that a shortened term would hamper the
work of the board.
9:27:24 AM
Senator Wilson identified the issue of application accuracy
and completeness. He recalled an inaccuracy rate of 97
percent, which he believed was high. He asked what Mr.
Walukiewicz how the issue of application accuracy could be
resolved.
Mr. Walukiewicz explained that the application process was
paper-based and very detailed. Much of the information had
to be cross-checked with various databases. He said that
having an electronic submission process that was integrated
with other state databases would streamline the process.
Mr. Walukiewicz continued to address Senator Wilson's
question. He said that one had to understand the statutes,
regulations, and nuances associated with each license
application. He summarized that the board was hopeful that
the automated system would cut the error rate to a
manageable level.
9:30:35 AM
Senator Wilson did not see how an automated system would
help the applicant. He wondered whether the board would
provide technical assistance to applicants.
Mr. Walukiewicz relayed that there was also a position that
assisted with the roll-out of applications and regulations.
He said that due to staffing issues, there was not as great
of outreach to the industry to assist with forms. He added
that now that the board was fully staffed, he anticipated
there would be more outreach that would provide guidance.
He was certain matters would be simplified with the passage
of SB 9.
9:32:37 AM
Co-Chair Stedman commented that the board should worry
about the legislature eliminating the board in 2026. He
relayed that it was helpful to have another review as
proposed in four years. He thought that if the issues were
resolved the next extension would be longer.
9:33:34 AM
Senator Olson agreed with Co-Chair Stedman. He referenced
the high cost of another audit.
9:34:31 AM
Senator Wilson asked whether the board still practiced
fairness in decision making or were appeals based on
politics.
Mr. Walukiewicz could not speak for the previous board
chair. He asserted that while he had been on the board, he
had been committed to strictly following statutes and
regulations. He said that applications were examined solely
on merit and license availability. He noted that the board
was completely new as of the last 12 months. He stressed
the professionalism of the board members.
9:38:09 AM
Co-Chair Bishop asked about the position that had been
moved from Fairbanks to Mat-Su. He asked whether the
position was still vacant.
Mr. Walukiewicz deferred to Glen Klinkhart. He shared that
there were no enforcement related findings in the audit and
all of the administrative staff was housed in Anchorage.
9:39:51 AM
GLEN KLINKHART, INTERIM DIRECTOR, ALCOHOL AND MARIJUANA
CONTROL OFFICE, DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT (via teleconference), relayed that
there had been a spot open in Fairbanks that was filled by
an investigator but due to organizational issues the spot
had to be moved to Wasilla.
9:41:43 AM
Senator Wilson asked how Mr. Klinkhart felt about the board
being able to make decisions regarding the applicability of
statutes.
Mr. Klinkhart stressed that the board followed statute and
had a qualified Assistant Attorney general present at every
meeting. He felt that there was confusion surrounding
licensing and population numbers. He said that the board
had established guidelines for signature gathering that
simplified the process.
9:44:51 AM
Co-Chair Bishop OPENED public testimony.
9:45:07 AM
Co-Chair Bishop CLOSED public testimony.
Co-Chair Bishop relayed that //
SB 151 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 173
"An Act relating to the practice of dentistry;
relating to dental radiological equipment; and
providing for an effective date."
9:45:25 AM
Co-Chair Bishop invited the bill sponsor and staff to the
table.
9:46:03 AM
Senator David Wilson, Sponsor, explained that the bill
would transfer dental radiological equipment inspections
from the Board of Dental Examiners to the Department of
Health and Social Services and would establish a specialty
dental license in the State of Alaska. He stated that the
changes had been suggested by members of the dental
industry and had been seen in previous legislation
considered by the committee. He stated that the updates
were in the interest of public safety.
9:47:22 AM
JASMIN MARTIN, STAFF TO SENATOR WILSON, reiterated the two
changes that would occur under the legislation.
9:49:16 AM
Senator Olson wondered whether the bill was directed toward
personnel or equipment inspection.
Ms. Martin replied that the bill was directed toward
equipment inspection.
Senator Olson wondered whether adding the responsibility
under DHSS would be an additional burden to the department.
Ms. Martin said that the bill would create a new position
to take on the additional work.
Senator Olson asked whether there had been any past
violations that had caused loss of a license.
Senator Wilson responded that no one had lost a license
yet, but that it would happen soon as there were some
licensees that were out of compliance.
Senator Olson found it troublesome that someone could be
threatened with closure due to a change in statute.
Ms. Martin relayed that inspection of equipment was already
a requirement under statute.
9:51:34 AM
Ms. Martin addressed a sectional analysis document (copy on
file):
Section 1: Conforming language in AS 08.01.065(c).
Section 2: Adds a new section (k) to AS 08.01.065
(Title 8. Business and Professions, Chapter 1.
Centralized Licensing, Section 065. Establishment of
fees) Requires the Board of Dental Examiners to
establish and collect fees on behalf of the Department
of Health and Social Services for the inspection of
dental radiological equipment.
Ms. Martin continued with the sectional:
Section 3: Adds new sections to AS 08.36 (Title 8.
Business and Professions, Chapter 36. Dentistry) AS
08.36.242. License to practice as a specialist
required. Establishes that a dentist may not advertise
using the term "specialist," the name of a specialty,
or other phrases that suggest they are a specialist
unless they have a specialist license as established.
AS 08.36.243. Qualification for specialist; scope of
practice.
(a) Establishes that in order to qualify for a
specialist licenses a person must
(1) Hold a dental license issued by the board and
(2) Meet the qualifications of a specialist as
established by the board
in regulation.
(b) In creating the qualifications for a specialist
license, the board shall
consider the standards of a nationally recognized
certifying entity approved
by the board.
(c) Establishes that a dental specialist can only
claim to be a specialist in the specialty they hold a
license in.
Sec. 08.36.245. Suspension or revocation of specialist
license.
Establishes that a board may suspend or revoke a
specialist license as set by
AS 08.36.315.
Ms. Martin continued to address the sectional analysis:
Section 4: Adds a new section (d) to AS 44.29.020
(Title 44. State Government, Chapter 29. Department of
Health and Human Services, Section 020. Duties of the
Department) Requires DHSS to establish standards of
registration, use, record keeping, and inspection of
dental radiological equipment in compliance with
federal law.
Section 5: Conforming language in AS 44.46.029
Section 6: Conforming language in AS 46.03.022
Section 7: Repeals: AS 08.36.075: Section of law
requiring the Board of Dental Examiners to set
standards for inspection of dental radiological
equipment. Placed under DHSS by section 4. AS
18.05.065, AS 18.60.525(e), and AS 44.29.027: Sections
of law prohibiting DHSS from regulating dental
radiological equipment.
Section 8: Allows the Board of Dental Examiners, the
Department of Commerce, Community, and Economic
Development, and the Department of Health and Social
Services to adopt regulations in line with this act.
Section 9: Allows the departments and board to
immediately begin setting regulations.
Section 10: Set a delayed effective date for the rest
of the act to July 1, 2023.
Co-Chair Bishop asked whether the delayed effective date
was synched up to when the new regulations would be
complete.
Ms. Martin deferred to the department.
9:54:10 AM
Senator von Imhof had questions about Section 3, which
established that the board could suspend or revoke a
license. She assumed there were dentists that had claimed
to be specialists without having gone through the
certification process.
Ms. Martin answered "yes."
Senator von Imhof asked whether there were other penalties
that could be issued once the statute changes.
Ms. Martin deferred the question to the chair of the Board
of Dentistry.
9:55:55 AM
DR. DAVID LOGAN, EXECUTIVE DIRECTOR, ALASKA DENTAL SOCIETY
(via teleconference), noted that he would focus his remarks
on the x-ray inspection aspect of the bill. He explained
that there were dentists that could face a compliance issue
at the end of the calendar year. He said that the industry
had been unable to find a private contractor to perform
inspections in the state. He said that the need was
recognized and attempts to find an inspector have been
fruitless, which prompted the shift of the responsibility
to DHSS. He said that inspectors had to be specifically
trained for the job.
9:58:14 AM
Senator Olson asked about the alleged shortage of qualified
inspectors in the state. He asked how the issue could be
corrected.
Mr. Logan thought it would be difficult to get inspectors
into the state on a part-time basis. He believed that the
hiring of the position would be best handled by the state.
Senator Olson asked about how dentists in rural Alaska and
in Tribal health corporations had their equipment
inspected.
Mr. Logan noted there were state certified inspectors on
staff at those facilitate.
10:00:27 AM
DAVID NIELSON, CHAIR, DENTAL BOARD OF EXAMINERS (via
teleconference), thanked Senator Wilson for introducing the
bill. He referenced He stated that order for the board to
address licensing issues, specialty licensing categories
were need, that could hold up under scrutiny. He noted that
typically a post-graduate included at least two additional
years after dentistry school. Ha said that lack of
specificity in the statute had resulted din the denial of
specialist practice licensees. He believed that the
legislation would give the public a way to know whether
they were being treated by a certified specialist.
10:04:25 AM
Co-Chair Bishop OPENED public testimony.
10:04:51 AM
JAYME PARKER, SECTION CHIEF, PUBLIC HEALTH LABORATORIES,
DIVISION OF PUBLIC HEALTH, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES (via teleconference), testified that the
radiological program at the state health lab currently
oversees 1000 devices across the state. She stated that the
work was done by a single health physicist. She said that
to take on the estimated 2,200 to 2,400 additional devices
the division would need an additional radiological health
physicist and a part-time administrator to help with travel
and outreach. She relayed that while the division had the
capability to the work, they lacked capacity. She related
that the devices were only required to be inspected every 6
years, which meant that inspections could be broken down
into approximately 400 per year.
10:06:44 AM
Co-Chair Bishop CLOSED public testimony.
10:06:49 AM
AT EASE
10:07:12 AM
RECONVENED
Senator Wilson urged the committee to support the bill.
SB 173 was HEARD and HELD in committee for further
consideration.
10:07:54 AM
AT EASE
10:09:42 AM
RECONVENED
SENATE JOINT RESOLUTION NO. 12
Urging the United States Congress to repeal the
Windfall Elimination Provision and Government Pension
Offset of the Social Security Act.
10:09:44 AM
Co-Chair Bishop relayed that it was the first hearing of
SJR 12.
10:10:13 AM
Senator Bill Wielechowski, Sponsor, explained that SJR 12:
SJR 12 urges Congress to repeal the Windfall
Elimination Provision (WEP) and Government Pension
Offset (GPO) of the Social Security Act. The WEP cuts
the Social Security benefits of public employees in
Alaska if they plan to switch between the public
sector and private sector or military. In 2021, this
loss could be as much as $498 per month, or about
$6,000 a year. The GPO cuts spousal or widows'
benefits for public employees for no reason other than
their work in the public sector. This cut could amount
to as much as 2/3rds the value of the individual's
government pension.
Because Alaska is one of few states that does not
offer a defined benefit plan or coverage for social
security, the WEP and GPO affect more Alaskans per
capita than any other state. Public employees in
Alaska are being punished for choosing to work in
public service. The WEP and GPO negatively impact
recruitment and retention of Alaska public employees
such as firefighters, police officers and especially
teachers. Those who do not want to be subject to these
provisions will simply look elsewhere for employment.
Punishing individuals for choosing public service runs
counter to retaining dedicated Alaskan workers and
recruiting the best of the best to Alaska.
Passage of SJR 12 will demonstrate that the Alaska
Legislature opposes arbitrary and unfair cuts to the
rightfully earned Social Security benefits of
Alaskans.
Alaskans deserve to retire with dignity. I urge your
support of SJR 12.
10:12:29 AM
Co-Chair Bishop asked about the Windfall Elimination
Provision (WPE).
Senator Wielechowski explained that the WPE would be
further discussed in the presentation.
10:12:52 AM
KEEGAN FARONE, STAFF TO SENATOR WIELECHOWSKI, discussed a
presentation entitled "Senate Joint Resolution 12, Senator
Wielechowski, 24 Feb 2022," (copy on file).
Mr. Farone showed slide 2, "Windfall Elimination
Provision:
• The Windfall Elimination Provision (WEP) was enacted
in 1983 by the Social Security Administration.
• The WEP reduces Social Security benefit payments to
beneficiaries whose work histories include both
Social Securitycovered and non-covered employment,
with the non-covered employment also providing
pension coverage.
• WEP reductions could amount to nearly $75 million
annually for affected Alaskans.
• In Alaska, the WEP potentially affects any public
employee who is also eligible for Social Security.
Mr. Farone addressed slide 3:
• For the first bend in average annual earnings,
the WEP reduces the replacement rate from 90
percent to as low as 40 percent, depending on the
quantity of years of qualified substantial
earnings under Social Security coverage.
Mr. Farone estimated that WEP reductions could result in a
$75 million reduction annually for affected Alaskans.
10:13:32 AM
Co-Chair Bishop asked whether the $75 million figure had
been provided by the sponsor or the Social Security
Administration.
Mr. Farone replied that the estimate was based on the $498
per month, multiplied by the number of Alaskans affected
by the WEP.
Co-Chair Bishop added that the number included direct
payments and not indirect payments.
Mr. Farone agreed.
10:14:41 AM
Mr. Farone reiterated that the first bend from slide 3.
10:15:10 AM
Mr. Farone relayed that the Three Bend Formula constituted
the primary insurance amount (PIA), which was the amount
paid to a retiree at full retirement age. He said that
under the WEP there would be no reductions in the second or
third bend of the formula, only the first bend.
10:15:32 AM
Mr. Farone spoke to slide 4, "Windfall Elimination
Provision":
• The WEP affects more Alaskans per capita than
any other state.
• Reductions under the WEP may equate to as much
as $498 per month, or approximately $5,976
annually.
Mr. Farone shared that there were 12,000 retired workers
affected by the WEP, 60 of which were disabled, 478 were
spouses and children, which combined constituted 11.6
percent of all Alaskan social security beneficiaries
affected by the WEP.
10:16:03 AM
Co-Chair Stedman went back to slide 3. He shared that he
supported the resolution. He thought the issue was
surprising to many who did not realize it existed until it
was directly affecting their social security payout. He
asked Mr. Farone to explain Table 3 on slide 3, without
acronyms.
Mr. Farone explained that the Social Security
Administration had a chart that indicated what the
considered to be substantial earnings, which increased
yearly. He said that if a person did not have at least 30
years of what the social security administration considered
to be substantial earnings, for every year below that
number 90 percent of the first $996 was reduced by 5
percent.
Co-Chair Stedman believed that the practice was called a
social security offset.
Mr. Farone clarified that the practice was called the WEP.
10:17:52 AM
Co-Chair Bishop asked about slide 4. He wondered about
Alaskas anomalous number of per capita workers.
Mr. Farone agreed that Alaska had the most workers, per
captia, affected by the WEP.
10:18:15 AM
Mr. Farone showed slide 5, "Government Pension Offset":
Government Pension Offset
• The Government Pension Offset (GPO) reduces Social
Security benefits paid to spouses or survivors when
the spouse or survivor earned a pension from a
government job that was not covered by Social
Security.
• Unlike the WEP, which can apply to any non-covered
employment, the GPO applies specifically to
government workers' retirement benefits.
• Although pensions mitigate the effect of the WEP
adjustment to Social Security benefits, pensions
from noncovered employment trigger the GPO
adjustment, which reduces the spouse and survivor
benefit.
10:18:53 AM
Mr. Farone spoke to slide 6, "Government Pension Offset":
Under the GPO, the reduction may equal up to two-
thirds of the value of the pension in noncovered work
and may wipe-out the spouse or survivor benefit
entirely.
Mr. Farone spoke to the chart on slide 6, noting that it
was a hypothetical example of the GPO reduction. He
explained that if there was a covered worker with an $1,800
benefit, the spousal benefit before GPO would be $900. If
the spousal benefit included a $1000 non-covered pension,
the two-third reduction of the $900 would leave a remaining
benefit of $233. This was called a partial offset. In a
full offset if the GPO was larger than the spousal
benefit, no benefit would be paid.
10:20:00 AM
Mr. Farone addressed slide 7, "Government Pension Offset":
• In 2020, 3,322 Alaskans were subject to GPO
reductions, 2,419 of which were fully offset,
meaning those affected received no Social
Security spousal or survivor's benefit because
the reduction was greater than the benefit
itself.
Mr. Farone added that 43 percent of those affected were
widows or widowers.
10:20:52 AM
Mr. Farone referenced slide 8, "Conclusion":
SJR 12 is designed to protect employees whose work was
contracted under the premise that their dedication to
public service would be rewarded upon their
retirement.
Although the WEP and the GPO were enacted to address
one inequality, they inadvertently created
another. Legislators must right this wrong and
ensure that individuals are not forced to choose
between serving the public good or retiring with
financial stability.
10:21:14 AM
Senator von Imhof wondered whether the United States
Congress would pay attention to the resolution should the
legislature pass the bill.
Senator Wielechowski thought many Alaskans were concerned
about the issue. He relayed that President Biden had
expressed support for eliminating the GPO and the WEP. He
believed that legislation had been introduced on the
federal level.
Co-Chair Bishop commented that the state legislature
advocating a position helped guide state representatives on
the federal level.
10:23:00 AM
Senator von Imhof thought it would be helpful to see the
status of the related federal legislation.
Senator Wielechowski agreed to provide the information.
10:23:37 AM
Co-Chair Bishop OPENED public testimony.
10:24:03 AM
AT EASE
10:24:12 AM
RECONVENED
DAVID GUTTENBERG, FORMER LEGISLATOR, FAIRBANKS (via
teleconference), wanted to share his experience with the
WEP. He had experienced a $500 per month penalty after
retirement, which was a significant amount of his monthly
retirement. He felt that it was fair to receive the
benefits one had already paid into. He thought that the
underlying factor was the management of social security. He
reiterated that the WEP took away money that people had
paid into the system. He urged support for the resolution.
10:27:31 AM
Co-Chair Stedman wanted to clarify that the testifier had
paid into social security for 25 years.
Mr. Guttenberg affirmed he had paid into Social Security
for 25 years.
Co-Chair Stedman understood that Mr. Guttenbergs penalty
had been $500 per month.
Mr. Guttenberg replied in the affirmative.
10:28:13 AM
Co-Chair Bishop CLOSED public testimony.
Senator Hoffman asked whether the benefits of the
legislation would be applied retroactively. He thought it
was known that the Social Security fund was underfunded and
wondered whether Congress would address the solvency of the
fund.
Senator Wielechowski responded that retroactivity and
enforcement would be determined by Congress. He hoped that
the benefits would be retroactive. He did not think back
payment. He agreed that Social Security solvency was an
issue he hoped would be addressed by Congress.
10:30:14 AM
Co-Chair Stedman thought it would be important to have 30
or more years in Social Security. He believed it was
reasonable for people to expect to be paid out by the fund
they had paid into during their working lives.
Co-Chair Bishop set an amendment deadline for 1pm, Monday,
February 28, 2022.
SJR 12 was HEARD and HELD in committee for further
consideration.
Co-Chair Bishop discussed housekeeping.
10:31:18 AM
AT EASE
10:31:30 AM
RECONVENED
ADJOURNMENT
10:31:42 AM
The meeting was adjourned at 10:31 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR 12 Sponsor Statement.pdf |
HL&C 3/21/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM SSTA 5/4/2021 3:30:00 PM |
SJR 12 |
| SJR 12 GPO Explainer 2.8.21.pdf |
HL&C 3/21/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM |
SJR 12 |
| SJR 12 Letter of Support 2.9.22.pdf |
HL&C 3/21/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM |
SJR 12 |
| SJR 12 Letter of Support 5.5.21.pdf |
HL&C 3/21/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM |
SJR 12 |
| SJR 12 Presentation.pdf |
HL&C 3/21/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM |
SJR 12 |
| SJR 12 WEP GPO Key Points 2.9.22.pdf |
HL&C 3/21/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM |
SJR 12 |
| SJR 12 WEP Explainer 11.16.21.pdf |
HL&C 3/21/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM |
SJR 12 |
| SB 151 Sponsor Statement.pdf |
HL&C 4/13/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 151 |
| SB 151 Supporting Document - 2021 Audit Summary.pdf |
HL&C 4/13/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 151 |
| SB 151 Supporting Document - 2021 Complete Audit.pdf |
HL&C 4/13/2022 3:15:00 PM SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 151 |
| SB 173 Sponsor Statement.pdf |
SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SB 173 Sectional Analaysis version I.pdf |
SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SB 173 Written Testimony Received as of 1.31.22.pdf |
SFIN 2/24/2022 9:00:00 AM SL&C 2/9/2022 1:30:00 PM |
SB 173 |
| SJR 12 Responses to SFIN Committee Questions.pdf |
SFIN 2/24/2022 9:00:00 AM |
SJR 12 |