02/26/2015 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

          HB  47-PERS CONTRIBUTIONS BY MUNICIPALITIES                                                                       
                                                                                                                                
8:11:58 AM                                                                                                                    
                                                                                                                                
CHAIR TILTON announced that the  first order of business would be                                                               
HOUSE BILL  NO. 47,  "An Act requiring  each municipality  with a                                                               
population that  decreased by more  than 25 percent  between 2000                                                               
and  2010 that  participates  in the  defined benefit  retirement                                                               
plan  of the  Public Employees'  Retirement System  of Alaska  to                                                               
contribute to the system an  amount calculated by applying a rate                                                               
of  22 percent  of the  total of  all base  salaries paid  by the                                                               
municipality  to employees  of  the municipality  who are  active                                                               
members of the system during  a payroll period; reducing the rate                                                               
of  interest payable  by a  municipality with  a population  that                                                               
decreased by more  than 25 percent between 2000 and  2010 that is                                                               
delinquent  in transmitting  employee and  employer contributions                                                               
to the defined  benefit retirement plan of  the Public Employees'                                                               
Retirement System  of Alaska; giving retrospective  effect to the                                                               
substantive  provisions   of  the  Act;  and   providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
8:12:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  moved  to  adopt  CSHB  47,  Version  29-                                                               
LS0285\E, Wayne, 2/20/15, as the working document.                                                                              
                                                                                                                                
CHAIR TILTON objected for purposes of discussion.                                                                               
                                                                                                                                
8:12:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEAL FOSTER,  Alaska State  Legislature, speaking                                                               
as the sponsor  of HB 47, introduced his staff  who would explain                                                               
Version E.                                                                                                                      
                                                                                                                                
8:12:45 AM                                                                                                                    
                                                                                                                                
PAUL  LABOLLE, Staff,  Representative Neal  Foster, Alaska  State                                                               
Legislature, speaking  on behalf  of the  sponsor, Representative                                                               
Foster, directed attention to the  change in Section 1 of Version                                                               
E that  addresses the village  of Atka, which has  experienced an                                                               
increase in its payroll despite  a population loss.  He explained                                                               
that if the floor had  been applied as previously crafted, Atka's                                                               
floor would have increased over  fiscal year (FY) 2008 and placed                                                               
the community  in penalty mode as  some of its payments  would be                                                               
below  that  of FY  12.    Therefore,  the  change in  Section  1                                                               
provides for an exclusion such that  in order to reset the floor,                                                               
a  community would  have to  have both  a population  loss of  25                                                               
percent or more and FY 12 salaries  would have to be below the FY                                                               
08  salaries.   He  then  directed  attention  to the  change  in                                                               
Section 2, which changes the  calculation method on interest from                                                               
being based  on the discount rate  plus 4 percent to  being based                                                               
on  the  actuarially  assessed  rate  of  the  Public  Employees'                                                               
Retirement System  (PERS) fund, which  is 8 percent.   Therefore,                                                               
an employer paying  at the floor level has an  8 percent interest                                                               
rate for penalties,  which makes the system whole.   However, for                                                               
an  employer paying  above  the  FY 08  floor  the interest  rate                                                               
penalty is 12 percent.                                                                                                          
                                                                                                                                
8:15:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON asked if,  from Galena's perspective, there                                                               
is anything that is detrimental to Galena in Version E.                                                                         
                                                                                                                                
8:15:20 AM                                                                                                                    
                                                                                                                                
SHANDA  HUNTINGTON,  City  Manager/City Clerk,  City  of  Galena,                                                               
replied no.                                                                                                                     
                                                                                                                                
8:15:26 AM                                                                                                                    
                                                                                                                                
CHAIR TILTON,  upon determining  no one  else wished  to testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
8:15:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON opined  that the changes in  Version E keep                                                               
the  state whole  and  [levels  the playing  field]  for all  the                                                               
cities at the floor while keeping the state whole.                                                                              
                                                                                                                                
8:16:28 AM                                                                                                                    
                                                                                                                                
CHAIR  TILTON withdrew  her objection.   There  being no  further                                                               
objection, CSHB  47, Version E  was adopted.  She  then announced                                                               
that HB 47 would be held over.