Legislature(2007 - 2008)BELTZ 211

03/19/2008 09:30 AM STATE AFFAIRS

Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Continued from 03/18/08 --
Moved SB 183 Out of Committee
Moved SB 259 Out of Committee
Moved CSSB 260(STA) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 88(FIN) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         March 19, 2008                                                                                         
                           9:35 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Lesil McGuire, Chair                                                                                                    
Senator Gary Stevens, Vice Chair                                                                                                
Senator Hollis French                                                                                                           
Senator Lyda Green                                                                                                              
Senator Con Bunde                                                                                                               
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 183                                                                                                             
"An Act  repealing the defined contribution  retirement plans for                                                               
teachers and for public  employees; making conforming amendments;                                                               
and providing for an effective date."                                                                                           
     MOVED SB 183 OUT OF COMMITTEE                                                                                              
SENATE BILL NO. 259                                                                                                             
"An  Act repealing  certain provisions  relating to  applications                                                               
for  medical assistance  coverage; making  certain provisions  of                                                               
ch. 96,  SLA 2006, retroactive;  providing for an  effective date                                                               
by  repealing an  effective date  section  in ch.  96, SLA  2006;                                                               
providing for an  effective date for certain sections  of ch. 96,                                                               
SLA 2006; and providing for an effective date."                                                                                 
     MOVED SB 259 OUT OF COMMITTEE                                                                                              
SENATE BILL NO. 260                                                                                                             
"An Act  making corrective amendments  to the Alaska  Statutes as                                                               
recommended  by the  revisor of  statutes; and  providing for  an                                                               
effective date."                                                                                                                
     MOVED CSSB 260(STA) OUT OF COMMITTEE                                                                                       
CS FOR HOUSE BILL NO. 88(FIN)                                                                                                   
"An Act  relating to  televisions, monitors,  portable computers,                                                               
and  similar   devices  in  motor   vehicles;  relating   to  the                                                               
definition  of physical  injury  for the  Alaska Uniform  Vehicle                                                               
Code; and providing for an effective date."                                                                                     
     MOVED CSHB 88(FIN) OUT OF COMMITTEE                                                                                        
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 183                                                                                                                  
SHORT TITLE: REPEAL DEFINED CONTRIB RETIREMENT PLANS                                                                            
SPONSOR(S): SENATOR(S) ELTON                                                                                                    
05/16/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/16/07       (S)       L&C, STA, JUD, FIN                                                                                     
01/29/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
01/29/08       (S)       Heard & Held                                                                                           
01/29/08       (S)       MINUTE(L&C)                                                                                            
02/14/08       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
02/14/08       (S)       Moved SB 183 Out of Committee                                                                          
02/14/08       (S)       MINUTE(L&C)                                                                                            
02/15/08       (S)       L&C RPT  2DP 1DNP 1NR                                                                                  
02/15/08       (S)       DP: ELLIS, DAVIS                                                                                       
02/15/08       (S)       DNP: BUNDE                                                                                             
02/15/08       (S)       NR: HOFFMAN                                                                                            
03/18/08       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/18/08       (S)       EFFECTIVE DATE: MEDICAL ASSISTANCE LAWS                                                                
03/19/08       (S)       STA AT 9:30 AM BELTZ 211                                                                               
BILL: SB 259                                                                                                                  
SHORT TITLE: EFFECTIVE DATE: MEDICAL ASSISTANCE LAWS                                                                            
SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE COUNCIL                                                                             
02/04/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/08       (S)       STA, FIN                                                                                               
03/18/08       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/18/08       (S)       2008 REVISOR'S BILL                                                                                    
03/19/08       (S)       STA AT 9:30 AM BELTZ 211                                                                               
BILL: SB 260                                                                                                                  
SHORT TITLE: 2008 REVISOR'S BILL                                                                                                
SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE COUNCIL                                                                             
02/04/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/08       (S)       STA, FIN                                                                                               
03/18/08       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/18/08       (S)       Bills Previously Heard/Scheduled                                                                       
03/19/08       (S)       STA AT 9:30 AM BELTZ 211                                                                               
BILL: HB  88                                                                                                                  
SHORT TITLE: TVS AND MONITORS IN MOTOR VEHICLES                                                                                 
SPONSOR(S): REPRESENTATIVE(S) GATTO, GRUENBERG                                                                                  
01/16/07       (H)       PREFILE RELEASED 1/12/07                                                                               
01/16/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/07       (H)       STA, JUD, FIN                                                                                          
01/29/07       (H)       BILL REPRINTED 1/29/07                                                                                 
02/08/07       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
02/08/07       (H)       Scheduled But Not Heard                                                                                
02/13/07       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
02/13/07       (H)       Heard & Held                                                                                           
02/13/07       (H)       MINUTE(STA)                                                                                            
02/15/07       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
02/15/07       (H)       Heard & Held                                                                                           
02/15/07       (H)       MINUTE(STA)                                                                                            
02/20/07       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
02/20/07       (H)       Moved CSHB  88(STA) Out of Committee                                                                   
02/20/07       (H)       MINUTE(STA)                                                                                            
02/21/07       (H)       STA RPT CS(STA) NT 6DP 1NR                                                                             
02/21/07       (H)       DP:     JOHNSON,    JOHANSEN,     ROSES,                                                               
                         GRUENBERG, DOLL, LYNN                                                                                  
02/21/07       (H)       NR: COGHILL                                                                                            
02/28/07       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/28/07       (H)       Moved CSHB  88(JUD) Out of Committee                                                                   
02/28/07       (H)       MINUTE(JUD)                                                                                            
03/01/07       (H)       JUD RPT CS(JUD) NT 2DP 4NR                                                                             
03/01/07       (H)       DP: GRUENBERG, LYNN                                                                                    
03/01/07       (H)       NR: COGHILL, DAHLSTROM, SAMUELS, RAMRAS                                                                
04/18/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/18/07       (H)       <Bill Hearing Postponed to 4/20/07>                                                                    
04/20/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/20/07       (H)       Scheduled But Not Heard                                                                                
04/23/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/23/07       (H)       <Bill Hearing Postponed>                                                                               
04/25/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/25/07       (H)       Heard & Held                                                                                           
04/25/07       (H)       MINUTE(FIN)                                                                                            
05/04/07       (H)       FIN AT 8:30 AM HOUSE FINANCE 519                                                                       
05/04/07       (H)       Scheduled But Not Heard                                                                                
05/05/07       (H)       FIN RPT CS(FIN) NT 4DP 5NR                                                                             
05/05/07       (H)       DP: GARA, NELSON, FOSTER, CRAWFORD                                                                     
05/05/07       (H)       NR: KELLY, JOULE, HAWKER, STOLTZE,                                                                     
05/05/07       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
05/05/07       (H)       Moved CSHB  88(FIN) Out of Committee                                                                   
05/05/07       (H)       MINUTE(FIN)                                                                                            
05/12/07       (H)       TRANSMITTED TO (S)                                                                                     
05/12/07       (H)       VERSION: CSHB 88(FIN)                                                                                  
05/12/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/12/07       (S)       STA, JUD                                                                                               
03/13/08       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/13/08       (S)       Scheduled But Not Heard                                                                                
WITNESS REGISTER                                                                                                              
PAT LUBY, Advocacy Director                                                                                                     
AARP Alaska                                                                                                                     
Anchorage AK                                                                                                                    
POSITION STATEMENT: Spoke in support of SB 183.                                                                               
BARBARA RICH, President                                                                                                         
Alaska Retired Educators Association                                                                                            
Juneau AK                                                                                                                       
POSITION STATEMENT: Spoke in support of SB 183.                                                                               
JESSE KIEHL, Staff                                                                                                              
to Senator Kim Elton                                                                                                            
Alaska State Legislature                                                                                                        
Juneau AK                                                                                                                       
POSITION STATEMENT: Answered questions about SB 183.                                                                          
KATHRYN KURTZ, Assistant Revisor                                                                                                
Legal and Research Services Division                                                                                            
Alaska State Legislature                                                                                                        
Juneau AK                                                                                                                       
POSITION STATEMENT: Presented SB 259.                                                                                         
PAM FINLEY, Revisor of Statutes                                                                                                 
Legal and Research Services Division                                                                                            
Juneau AK                                                                                                                       
POSITION STATEMENT: Presented SB 260.                                                                                         
REPRESENTATIVE MAX GRUENBERG                                                                                                    
Alaska State Legislature                                                                                                        
Juneau AK                                                                                                                       
POSITION STATEMENT: Presented HB 88.                                                                                          
ACTION NARRATIVE                                                                                                              
CHAIR LESIL MCGUIRE reconvened the  Senate State Affairs Standing                                                             
Committee  meeting at  9:35:57 AM.  It had  been recessed  to the                                                             
call  of the  chair. Senators  Bunde, Stevens,  and McGuire  were                                                               
present at the  call to order. Senators French  and Green arrived                                                               
soon thereafter.                                                                                                                
         SB 183-REPEAL DEFINED CONTRIB RETIREMENT PLANS                                                                     
9:36:21 AM                                                                                                                    
CHAIR MCGUIRE announced the consideration of SB 183.                                                                            
PAT  LUBY,   Advocacy  Director,  AARP  Alaska,   said  financial                                                               
security  is the  cornerstone of  the American  dream -  you work                                                               
hard and  follow the rules and  you'll be able to  retire without                                                               
financial  worries. However,  one  quarter  of [Alaska]  retirees                                                               
don't participate  in social security.  A person  doesn't outlive                                                               
social  security. In  the  past  it didn't  matter  so much  that                                                               
Alaska's public  employees did not participate,  because they had                                                               
a defined  benefit plan  (DBP) that  would last  as long  as they                                                               
lived. Now,  they have  no DBP or  social security.  The American                                                               
dream  no   longer  exists  for   Alaska's  newly   hired  public                                                               
MR. LUBY  said it  is possible to  make the  defined contribution                                                               
plan (DCP)  work "as long as  you don't live too  long." But most                                                               
people live into their mid 80s and  many into their mid 90s. If a                                                               
DCP is to  work, people need to predict their  life expectancy as                                                               
well  as their  spouse's.  They  need to  know  if  they will  be                                                               
healthy  up until  death or  if  they will  need long-term  care.                                                               
Medicare doesn't  pay for  nursing homes or  home care.  A person                                                               
will need to  know if there will be inflation  in health care and                                                               
utility  costs.  Defined  benefits and  social  security  provide                                                               
annual COLAs  [cost of living  allowances], but the  DCP doesn't.                                                               
The price of fuel oil and gasoline  may go up. "You better have a                                                               
crystal  ball to  make a  defined contribution  plan work."  Many                                                               
companies have switched to DCPs, but  all who work in the private                                                               
sector have social security that will  last as long as they live.                                                               
No  matter how  much is  saved  in a  401k or  I.R.A., they  will                                                               
always  have the  defined benefits  of social  security. Alaska's                                                               
public employees used to have  the same financial security before                                                               
SB 141 [of 2005],  and no matter how long they  lived or what bad                                                               
luck was  dealt them, they would  not starve or end  up on public                                                               
assistance.  AARP members  rely on  Alaska's public  servants for                                                               
police assistance, to  teach their grandchildren, and  to put out                                                               
fires, and  they don't  want these  honorable public  servants to                                                               
end up worrying  about their health coverage  and outliving their                                                               
savings. They deserve better than  that. He asked for support for                                                               
SB 183. Give them the security they deserve, he said.                                                                           
9:39:09 AM                                                                                                                    
SENATOR BUNDE asked if social security will exist in 50 years.                                                                  
MR. LUBY  said yes. It can  pay complete benefits up  until 2041.                                                               
There will definitely be changes  to the social security program,                                                               
like was  done in 1983. Everyone  needs to share in  the changes.                                                               
Senator   Lisa  Murkowski   expects   changes   after  the   next                                                               
presidential election. Social  security will be there;  it is the                                                               
cornerstone for all  of us in retirement. No one  wants to see it                                                               
go away. "We will tinker with it, but it will be there."                                                                        
SENATOR BUNDE said  a lot of young people he  talks to think that                                                               
social security won't be there. It  has become a Ponzi scheme. It                                                               
may be  around but it  will change,  "and that's what  we've done                                                               
with state retirement." A constituent  said the SBS state program                                                               
is really a  form of social security. That program  may be around                                                               
longer than social security.                                                                                                    
9:40:59 AM                                                                                                                    
BARBARA  RICH, President,  Alaska Retired  Educators Association,                                                               
Juneau, said the association is  the original retired teachers of                                                               
Alaska,  and  it   is  not  union.  She  said   she  listened  to                                                               
yesterday's  testimony  and spoke  with  many  new teachers.  Her                                                               
group just  gave a  scholarship to  a wonderful  young, life-long                                                               
Alaskan  who  really wants  to  teach  in  Alaska, but  when  she                                                               
learned about  Alaska's pension for  new hires she decided  to go                                                               
to a  state with good benefits.  There are 13 to  15 states where                                                               
workers do  not have social  security, but  all have a  very good                                                               
defined benefit plan  -- except Alaska. The  other states provide                                                               
their teachers  with full social  security and a  defined benefit                                                               
plan,  and there  are a  few  that have  a hybrid  plan. This  is                                                               
important, and students  are looking at this.  Senator Bunde said                                                               
new teachers  are only interested in  a high salary, but  that is                                                               
not true - they are interested in the pension.                                                                                  
MS.  RICH said  that right  after her  husband retired  he had  a                                                               
heart attack.  He needed  by-pass surgeries. "If  we had  not had                                                               
the retirement  plan that we  have, my  husband and I  would have                                                               
been wiped  out completely - all  of our savings, our  house, and                                                               
everything.  There would  have  been nothing  left  for us."  New                                                               
teachers need to  have something like she has.  Alaska can afford                                                               
to do  that. If Alaska  doesn't provide  for them, it  won't have                                                               
decent  people teaching  its children.  Alaska needs  to get  the                                                               
best people  to teach, not  people who  can't get a  job anywhere                                                               
else.  Alaska  will  become  a  training  ground.  She  won't  be                                                               
personally affected because she has  her pension, as does Senator                                                               
Bunde, but she is concerned for the young people.                                                                               
9:44:55 AM                                                                                                                    
SENATOR  BUNDE said  he has  an excerpt  from the  Pew Charitable                                                               
Trust's  article  entitled  Mandate  to  Measure.  It  said  many                                                               
workers are not looking for  retirement, but they are looking for                                                               
"flexibility,  opportunity,  and   performance  pay."  There  are                                                               
different points  of view. By  an accident  of birth he  got [his                                                               
benefit plan], but he didn't choose  the date of his birth and so                                                               
he "had  an opportunity to  deal with  what existed in  Alaska at                                                               
that time. Today is another day." Circumstances are different.                                                                  
9:45:57 AM                                                                                                                    
SENATOR  STEVENS  said  he agrees  that  Alaska  needs  well-paid                                                               
teachers, and  he would like  to return  to the days  when Alaska                                                               
paid  them  as high  as  any  other  state.  He asked  about  the                                                               
unfunded liability. It has to be paid by someone.                                                                               
MS. RICH said to look at  what caused the unfunded liability. One                                                               
cause is the  legislature. She lobbied heavily  against the Early                                                               
Retirement Incentive program. The only  comment she heard was the                                                               
same thing  she heard  from Senator Bunde  yesterday: "We  have a                                                               
lot of teachers who don't want to  be teaching, so we want to get                                                               
rid  of them."  An early  buyout is  not the  way to  get rid  of                                                               
teachers. Even  her middle school students  could understand that                                                               
it would hurt  the system. "That was only one  of the things that                                                               
hurt it." The  other one was lack of funding  by communities. The                                                               
market was part of it. This body  has passed a bill to get things                                                               
back in place. The fourth  part [of the unfunded liability] deals                                                               
with health, which Alaska can't  control, but the state can start                                                               
dealing  with prescription  drugs.  "One thing  we  have to  stop                                                               
doing  is  cutting back  Medicare  -  that's really  hurting  the                                                               
senior population in  Alaska." People who have  older doctors who                                                               
retire  can't  get  another  doctor.  If  the  state  works  with                                                               
Congress, "we  can control a lot  of this." Health is  a national                                                               
issue, and we need affordable  health care for everyone. The PERS                                                               
pension  is  funded  over  100  percent, the  TRS  is  funded  93                                                               
percent,  and  actuaries feel  it  is  tremendous  if one  is  80                                                               
percent funded.  "So our pension is  very good … and  if we could                                                               
get the health  care taken care of…"  The Tier II in  TRS and the                                                               
Tier III PERS  is suppose to take care of  that, but there hasn't                                                               
been time to see if it  does because people have not retired much                                                               
out of those plans. Most retired people are Tier I.                                                                             
SENATOR GREEN asked what was funded at 100 percent.                                                                             
MS. RICH said  the PERS retirement pension is over  100 percent -                                                               
not counting health care. The TRS is 93 percent.                                                                                
9:49:54 AM                                                                                                                    
SENATOR GREEN said that is news to her.                                                                                         
MS. RICH said she believes the  figures come from the ARM [Alaska                                                               
Retirement Management] board.                                                                                                   
SENATOR GREEN said  if that is the case Alaska  wouldn't have the                                                               
unfunded liability.                                                                                                             
MS.  RICH   said  there  is   the  liability  because   of  early                                                               
retirement,  and it  wasn't funded  the  way it  should be.  Some                                                               
districts  did not  pay their  share. The  state has  to pay  its                                                               
share just  like the  public employees, "and  they didn't  in all                                                               
cases."  The early  retirement and  the health  portions are  why                                                               
there is the unfunded liability.                                                                                                
SENATOR GREEN asked when the state didn't pay its share.                                                                        
MS.  RICH said  a  few  years ago  everyone  thought the  pension                                                               
system was  doing so well, and  some districts did not  pay their                                                               
SENATOR GREEN  said that is not  the state. The state  has always                                                               
paid, she  assumed. There are unique  characteristics about these                                                               
plans that don't  allow overfunding. There are  things that don't                                                               
allow preparation for the bad days.                                                                                             
9:52:07 AM                                                                                                                    
SENATOR BUNDE said  many actuarial organizations say  not to fund                                                               
over  80 percent,  because  there will  be  pressure to  increase                                                               
benefits, which will  spiral into problems. If the  state is over                                                               
100 percent, it needs to be looked at.                                                                                          
CHAIR MCGUIRE  said that during  the Knowles  administration, the                                                               
ARM  board  wasn't presenting  accurate  information  - they  got                                                               
their  numbers  from  Mercer.  "Then  add  to  it  the  political                                                               
equation of having  to put into the budget the  real numbers that                                                               
it would cost to afford a  system. And then to ask employees, who                                                               
are then your voters, to contribute  an amount that would also be                                                               
reflective  of  reality,  and  you   start  seeing  where  things                                                               
spiral." It isn't any one single  thing, there is enough blame to                                                               
go around.                                                                                                                      
SENATOR  FRENCH said  it comes  down to  the unfunded  liability.                                                               
This bill  does not fix  it or break it.  "We've fixed it  with a                                                               
different mechanism,  which is to  contribute more money  to that                                                               
unfunded liability and to correct  the past errors, whatever they                                                               
were." With  or without  DBP, the  unfunded liability  exists and                                                               
needs to be fixed. He firmly  believes in going back to DBPs, and                                                               
it can be  funded in a way that doesn't  cause any economic pain,                                                               
any more pain than necessary,  to provide for a stable retirement                                                               
for public employees.                                                                                                           
9:54:47 AM                                                                                                                    
SENATOR STEVENS  said the  question is how  to avoid  an unfunded                                                               
SENATOR FRENCH  said that is  a perfect question, and  the answer                                                               
is to  be ever vigilant.  There are many jurisdictions  that have                                                               
avoided   this   problem   by  being   proactive,   conservative,                                                               
questioning the assumptions, and staying on top of it.                                                                          
CHAIR MCGUIRE said someone needs to  sit down and reflect on Tier                                                               
II  and III.  Perhaps  it  will be  a  carve-out  for medical,  a                                                               
separate  stipend, or  a bare-bones  plan. She  is young  and she                                                               
knows  that her  friends are  looking at  retirement. Some  young                                                               
people  might   not  care  about   it,  but  her   generation  is                                                               
increasingly looking  at retirement and  how they will  live with                                                               
dignity and  health in  their final  years. If  it really  were a                                                               
choice between  high pay and  benefits, "I might even  be willing                                                               
to go down that path, but I don't  see this state ever going to a                                                               
merit-based system and I don't  see … us increasing teacher pay."                                                               
Alaska has  the worst of all  scenarios - teachers are  paid some                                                               
of the  lowest rates in  the nation, the state  is geographically                                                               
challenged, especially  with rural  teachers and  peace officers,                                                               
and on  top of that,  the state won't  give social security  or a                                                               
stable retirement.  It makes it  a real challenge to  attract and                                                               
retain good people in Alaska.                                                                                                   
9:57:02 AM                                                                                                                    
SENATOR BUNDE  said, "Where you  stand on an issue  often depends                                                               
on where  you sit." There is  merit pay for teachers.  He said he                                                               
helped get it passed a couple  of years ago. It was fought, tooth                                                               
and claw,  by NEA because they  want to support common  factors -                                                               
if not  mediocre ones. A number  of schools took advantage  of it                                                               
and  rewarded outstanding  performance with  additional pay.  But                                                               
for how  to deal with the  unfunded mandate, the state  should do                                                               
it as  they currently are --  dipping into the general  fund. One                                                               
of the biggest frustrations that  he hears from people in private                                                               
enterprise  is "you  guys are  using  their money  to fund  state                                                               
employees' retirement." If there is  a DBP, the contribution from                                                               
the  employee  has to  go  up  enough  so  there is  no  unfunded                                                               
mandate. He doesn't think that is politically achievable.                                                                       
CHAIR MCGUIRE said there could be  a discussion about it. She was                                                               
frustrated  that  the  debate  and   the  repeal  became  such  a                                                               
political pressure  cooker that  a lot  of details  and potential                                                               
corrections were lost in the mix.  There might be a middle ground                                                               
to pull  back to. It  would likely be higher  contribution rates,                                                               
but at  the end  of the  day, the  state needs  to pay  for state                                                               
functions.   "Last  I   checked   education  is   still  in   the                                                               
constitution.  It's  still something  that  we  want to  publicly                                                               
fund.  We want  an education  to  be accessible  to all  Alaskans                                                               
irrespective of income and irrespective  of where they live." The                                                               
state has that  commitment and it is different  from what happens                                                               
in the private sector. It is a constitutional commitment.                                                                       
9:59:42 AM                                                                                                                    
SENATOR GREEN  said the conversations during  the construction of                                                               
the new  plans were  about not  being able  to change  a contract                                                               
[with workers],  and a new tier  would need to be  created. "Does                                                               
this do that? Is it a Tier V and Tier IV?"                                                                                      
JESSE  KIEHL,  Staff to  Senator  Kim  Elton,  said the  bill  is                                                               
prospective and will put new  hires into the previous tier. Those                                                               
who are in the DCP will get  a choice of taking their DCP account                                                               
and converting  the funds,  value for value,  to the  DBP system.                                                               
The bill ensures  that if they choose to change,  it won't create                                                               
any unfunded  liability because  it will be  the lesser  of their                                                               
actual time  of service or  the actuarial value of  their account                                                               
balance. If  he had a  DCP for  two years, had  done staggeringly                                                               
well  in the  market,  and  the actuarial  value  of his  account                                                               
balance was greater than his two  years of service, he might only                                                               
have  a year  and a  half of  value. That  would be  the credited                                                               
service he would get with such  a conversion. A new hire would be                                                               
a Tier III hire, in effect, no matter what it might be called.                                                                  
10:02:57 AM                                                                                                                   
MR. KIEHL noted  information provided to the  committee on normal                                                               
costs. Normal  cost is the percentage  of pay that has  to be put                                                               
in the  system this  pay period  for this  pay period's  worth of                                                               
benefits. It  is forward  looking. "It's  the prefunding  that we                                                               
do."  The chart  on accrued  liability represents  2007 when  the                                                               
unfunded liability was  valued at roughly $7  billion between the                                                               
two systems.  The accrued liabilities of  Tier I in PERS  and TRS                                                               
are about $13  billion. For Tier II  TRS and Tier III  PERS it is                                                               
about $1.4 billion. Those are the  tiers the bill will go back to                                                               
and there are two  thirds as many members as Tier  I, and yet the                                                               
total  liability is  one  fifteenth. "We  have  never broken  out                                                               
assets by  tiers, so  I can't compare  the unfunded  liability of                                                               
Tier I and  Tier II of TRS."  In essence, the change  from Tier I                                                               
to Tier II in TRS and the change  from Tier I to Tier III for the                                                               
PERS pretty much  cover the unfunded liability issue.  SB 141 did                                                               
other  things that  assured the  constant vigilance  that Senator                                                               
French  suggested. It  provided for  a second  actuary, mandatory                                                               
experience  studies, and  that  nobody ever  pays  less than  the                                                               
normal cost rate -- even if  there is extra money. "Under SB 141,                                                               
nobody ever pays  less than the normal cost rate  of the benefits                                                               
accrued, and this bill does  nothing to change those things." All                                                               
the safety valves  are kept, while still going back  to a benefit                                                               
that gives retirement security.                                                                                                 
10:05:56 AM                                                                                                                   
CHAIR MCGUIRE said  that was excellent. There are a  lot of myths                                                               
about  what the  bill does.  She  asked if  SB 183  will fix  the                                                               
problem with SB 141 and reconnect PERS to TRS for vesting.                                                                      
MR. KIEHL said  the problem is fixed for the  person who is hired                                                               
after SB  183 passes. If  a person is in  the DCP and  chooses to                                                               
convert, the problem is fixed. But  the problem will not be fixed                                                               
for those who choose not to convert.                                                                                            
10:07:15 AM                                                                                                                   
SENATOR FRENCH  said this  committee has  had a  good discussion,                                                               
but there  are huge financial  implications that should  be taken                                                               
up  by  another  committee.  He  moved  to  report  SB  183  from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
SENATOR BUNDE  objected. Different  people have  different points                                                               
of  view.  "Right  up  there  with  the  frustration  that  state                                                               
employees  only  work  a  37.5-hour   work  week  --  stipulating                                                               
teachers  work a  lot more  than  that --  is the  fact that  the                                                               
public is supporting  a retirement plan that  is vastly different                                                               
than what  the public would  have access  to prior to  141." What                                                               
disturbs  him  is  making   people  indentured  servants,  making                                                               
workers stay  in Alaska  because it  is financially  important to                                                               
them when  they retire.  They could  be sour  on their  job, "but                                                               
we're going  to encourage them,  force them almost, to  stay here                                                               
because of the retirement that  they'll lose if they move." Chair                                                               
McGuire is the only member that  was born in Alaska and "the rest                                                               
of us came from somewhere else."  He cashed out his retirement in                                                               
Washington  to move  to  Alaska.  He doesn't  want  to deny  that                                                               
opportunity to  someone in Alaska.  Those who grew up  here would                                                               
like to move to other parts of  the world. He would not deny them                                                               
that. Making people  stay in Alaska so they can  meet that ironic                                                               
definition of  sourdough -- sour  on Alaska without  enough dough                                                               
to leave --  just doesn't make sense. If the  DCP is repealed, it                                                               
will drain  the public  treasury, and  in a  few years  the state                                                               
will be in  a deficit. Once a retirement  program is established,                                                               
the state has to  stick with it. The money would  need to be paid                                                               
with the corpus of the  permanent fund. Bills are sometimes moved                                                               
just  out  of courtesy,  and  it  causes  a  mess on  the  floor.                                                               
Sometimes those political mistakes pass into law.                                                                               
10:10:55 AM                                                                                                                   
CHAIR MCGUIRE  said her vote  to move  the bill will  reflect the                                                               
fact that it is  a good idea. There is more work  to be done. She                                                               
prefers an  option of  a DCP  and a DBP.  Perhaps there  are more                                                               
places where  the bill  can be ratcheted  down. In  general, [SB]                                                               
141 went  too far  and the effects  will be seen  when it  is too                                                               
late. The  state is seeing it  already in its teachers.  She made                                                               
note  of  the front  line  folks  that  face  fires to  save  our                                                               
families and respond  to those crimes in the middle  of Alaska in                                                               
the cold,  dark winter  nights. If  we are  going to  attract and                                                               
retain people  to do these  state functions,  we need to  be sure                                                               
that they have a humane and adequate retirement.                                                                                
10:12:11 AM                                                                                                                   
SENATOR STEVENS  said the  discussion has  to continue.  The bill                                                               
may not  make it  through this  session, but it  is too  early to                                                               
kill it.  He has  serious concerns  about the  unfunded liability                                                               
and  the transferability  of the  TRS and  PERS. This  bill might                                                               
resolve his concern.  "I'm going to vote to move  it ahead to the                                                               
next committee, although I have very serious qualms about it."                                                                  
A  roll  call  vote  was taken.  Senators  French,  Stevens,  and                                                               
McGuire voted in  favor of moving SB 183, and  Senators Bunde and                                                               
Green voted against  it. Therefore SB 183 moved  out of committee                                                               
on a vote of 3:2.                                                                                                               
         SB 259-EFFECTIVE DATE: MEDICAL ASSISTANCE LAWS                                                                     
CHAIR MCGUIRE announced the consideration of SB 259.                                                                            
10:13:44 AM                                                                                                                   
KATHRYN  KURTZ, Assistant  Revisor, Legal  and Research  Services                                                               
Division, said SB 259 is a  special revisor's bill. In 2006 there                                                               
was  an effective  date clause  on  an act  that doesn't  reflect                                                               
reality. The  date anticipated that  one plan would  be submitted                                                               
and approved  by the  federal government, and  that is  not quite                                                               
what  happened. Provisions  were submitted  separately, and  some                                                               
were approved and some weren't.  It creates uncertainty about the                                                               
effective date  of the provisions.  This is a  separate reviser's                                                               
bill to clarify that, and  it is presented separately because the                                                               
retroactivity and  effective date clause  are a bit  more complex                                                               
than the issues dealt with in the regular revisor's bill.                                                                       
CHAIR MCGUIRE said she had staff  look it over to make sure there                                                               
weren't any substantive changes.                                                                                                
SENATOR  GREEN  moved  to  report  SB  259  from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no objection, the motion carried.                                                                                         
                   SB 260-2008 REVISOR'S BILL                                                                               
CHAIR MCGUIRE announced the consideration of SB 260.                                                                            
10:16:11 AM                                                                                                                   
PAM  FINLEY, Revisor  of Statutes,  Legal  and Research  Services                                                               
Division, said  there is an amendment  to fix a mistake  that was                                                               
found after SB 260 went to legislative council.                                                                                 
SENATOR GREEN  moved Amendment 1, labeled  25-LS1022\A.1, Finley,                                                               
as follows:                                                                                                                     
Page 23, following line 7:                                                                                                      
     Insert a new bill section to read:                                                                                         
"*Sec. 55. AS47.30.550(e) is amended to read:                                                                                 
     (e) In (a) and (b) of this section, "poverty area" means a                                                                 
census district in  which at least 15 percent  of the population,                                                               
based upon  the most recent  census data [DATE], falls  under 125                                                           
percent  of the  United  States Department  of  Health and  Human                                                               
Services' Poverty Income Guidelines  for Alaskans, as reported in                                                               
the Federal Register."                                                                                                          
Hearing no objection, Amendment 1 was adopted.                                                                                  
10:17:11 AM                                                                                                                   
SENATOR FRENCH  asked for assurance  that there is nothing  in SB                                                               
260 that will hurt him.                                                                                                         
MS. FINLEY  said she hopes and  believes there is nothing  in the                                                               
bill that will make "any of us" unhappy.                                                                                        
CHAIR MCGUIRE  said these are  technical changes to  comport with                                                               
federal language.                                                                                                               
MS.  FINLEY said  one  thing that  is odd  is  the definition  of                                                               
fireworks. It  referenced the ICC,  which was abolished  in 1995.                                                               
"We had  to come up with  something different, and I  kept trying                                                               
to deal  with that entire  section, and I  was referred to  a man                                                               
named "Griz" who is the pyrotechnic man in the state."                                                                          
10:18:40 AM                                                                                                                   
SENATOR  STEVENS said  Griz is  planning  an Anchorage  fireworks                                                               
display for the statehood commission.                                                                                           
SENATOR GREEN moved to report  SB 260, as amended, from committee                                                               
with  individual  recommendations  and attached  fiscal  note(s).                                                               
There being no objection, CSSB 260(STA) passed out of committee.                                                                
           HB  88-TVS AND MONITORS IN MOTOR VEHICLES                                                                        
CHAIR MCGUIRE announced  the consideration of HB  88. [Before the                                                               
committee was CSHB 88(FIN).]                                                                                                    
10:21:46 AM                                                                                                                   
REPRESENTATIVE MAX  GRUENBERG, Alaska State Legislature,  said HB                                                               
88 has passed the House three  times, and it prohibits watching a                                                               
visual display  while driving. There  was a fatal accident  a few                                                               
years ago  because of  this activity. The  state should  ban this                                                               
type of thing. This is a  no-brainer; no one should be watching a                                                               
video while  driving. However,  there are  people who  don't have                                                               
mature  judgment,  but  "hopefully   we  do."  Chair  McGuire  is                                                               
personally familiar the family [in  the accident]. HB 88 has been                                                               
through many committees and has wide support.                                                                                   
10:23:29 AM                                                                                                                   
CHAIR MCGUIRE  said perhaps  there should be  a law  against poor                                                               
judgment. If  nothing else, the  publicity surrounding  this bill                                                               
will enlighten someone. She doesn't  know what brings a person to                                                               
watch a movie and drive, but it may be generational.                                                                            
SENATOR GREEN  asked if this  bill will really make  a difference                                                               
to  someone who  would do  this and  other goofy  things such  as                                                               
drinking and driving.  There is a segment of  the population this                                                               
won't mean  anything to. It  doesn't speak highly of  Alaskans to                                                               
tell them not to watch TV while they are driving.                                                                               
REPRESENTATIVE GRUENBERG agreed. People  who drive while they are                                                               
intoxicated might  not listen  to laws until  they are  thrown in                                                               
jail. The penalty is now simply  an infraction, and the bill will                                                               
raise it to a serious  felony. It makes it negligent manslaughter                                                               
if someone is killed.                                                                                                           
10:25:53 AM                                                                                                                   
SENATOR  FRENCH   asked  why  cell   phones  and   personal  data                                                               
assistants are exempt.                                                                                                          
REPRESENTATIVE  GRUENBERG   said  he  couldn't  get   it  through                                                               
committees, and his  cosponsor doesn't support it.  He would like                                                               
it expanded, but he wants to get this through.                                                                                  
SENATOR STEVENS  said he doesn't  understand why it says  a front                                                               
seat passenger watching  a video display is not  a violation. "It                                                               
seems like it would be a  distraction -- a front seat [passenger]                                                               
watching an IPOD or some kind  of video display. It seems like it                                                               
would be a distraction to the driver."                                                                                          
CHAIR MCGUIRE  said it  happens by  definition. The  bill defines                                                               
the unlawful  act as the person  who is driving and  watching. If                                                               
it is a passenger, the law doesn't apply.                                                                                       
SENATOR FRENCH noted that navigational  displays are also exempt.                                                               
Someone can look at a cell phone or a GPS.                                                                                      
10:28:12 AM                                                                                                                   
REPRESENTATIVE GRUENBERG said  the GPS, yes. But  a driver cannot                                                               
watch a visual cell phone display.  A person can talk on it; page                                                               
2, line 8, says that audio equipment is okay.                                                                                   
SENATOR  FRENCH said  his  wife has  a cell  phone  that shows  a                                                               
caller's image when it rings. Is that okay?                                                                                     
REPRESENTATIVE  GRUENBERG said  as long  as she  doesn't have  an                                                               
accident from looking  at it. The problem arises if  she is doing                                                               
that and an accident results.                                                                                                   
10:29:41 AM                                                                                                                   
SENATOR  FRENCH noted  that it  is an  A misdemeanor  to drive  a                                                               
motor  vehicle with  a video  monitor or  other similar  means of                                                               
providing a  visual display in  full view  of a driver  while the                                                               
vehicle is in motion. "That's an I-Phone with my picture on it."                                                                
REPRESENTATIVE GRUENBERG said he stands corrected.                                                                              
CHAIR MCGUIRE  said line  5 on page  2 specifically  exempts cell                                                               
phones  or  personal  data  assistants   being  used  for  verbal                                                               
10:30:43 AM                                                                                                                   
SENATOR FRENCH said he will work on it in judiciary.                                                                            
SENATOR GREEN  asked if she  would be in  violation if she  had a                                                               
television in the front of her 1990 van.                                                                                        
REPRESENTATIVE  GRUENBERG said,  yes, if  it can  be seen  by the                                                               
driver while driving.                                                                                                           
SENATOR GREEN asked, "Even if it's not on?"                                                                                     
REPRESENTATIVE  GRUENBERG  said not  if  it  is equipped  with  a                                                               
locking device  that allows  it to  turn on  when the  vehicle is                                                               
stopped or if it is only visible to passengers.                                                                                 
SENATOR FRENCH said if it is turned off, it is not a violation.                                                                 
10:32:16 AM                                                                                                                   
CHAIR  MCGUIRE said  there are  a  lot of  vans that  have a  DVD                                                               
player for  the children, but it  would need to be  viewed by the                                                               
driver in a normal driving position to be prohibited.                                                                           
SENATOR FRENCH moved  to report CS for HB 88  from committee with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no objection, CSHB 88(FIN) moved out of committee.                                                                        
There being  no further  business to  come before  the committee,                                                               
Chair McGuire adjourned the meeting at 10:34:11 AM.                                                                           

Document Name Date/Time Subjects