Legislature(2017 - 2018)SENATE FINANCE 532
05/07/2018 09:30 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 | |
| HB47 | |
| HB233 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 47 | TELECONFERENCED | |
| += | HB 233 | TELECONFERENCED | |
HOUSE BILL NO. 47
"An Act requiring certain municipalities with a
population that decreased by more than 25 percent
between 2000 and 2010 that participate 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;
authorizing the administrator of the defined benefit
retirement plan of the Public Employees' Retirement
System of Alaska to reduce the rate of interest
payable by certain municipalities that are delinquent
in transmitting employee and employer contributions to
the retirement plan; and providing for an effective
date."
9:34:02 AM
Co-Chair MacKinnon read the title of the bill. She noted
that the bill had been heard in committee on April 25,
2018; and the committee had opened and closed public
testimony. Her office had received no proposed amendments.
Vice-Chair Bishop discussed FN 4 from State Retirement
Payments. He read passages from the Analysis on page 2 of
the fiscal note:
Conduent Human Resource Services (Conduent), the PERS
actuarial consultant, has calculated the financial
effects if this bill should pass. The basic result
will be a shortfall in actuarially projected PERS
employer contributions in the following amounts ($ are
in thousands):
FY2019 FY2020 FY2021 FY2022 FY2023 FY2024
$141.0 $133.0 $124.0 $116.0 $107.0 $98.0
EXPLANATION - SUPPLEMENTAL APPROPRIATION
Since the bill is effective immediately, this bill
would also assume an FY2018 supplemental contribution
for the impacted PERS municipalities for salary
contributions that would not be collected as a result
of the reduction of the salary floor for the four (4)
municipalities. Conduent estimates that amount to be
$148.0, and the fund source is state general funds.
This bill is effective immediately and is prospective,
principal amounts owed by the impacted PERS
municipalities (the difference between the salary
floor and the actual payroll amounts times 22% for
each fiscal year) are still due for fiscal years 2009
to 2017. The interest rate to charge on these
outstanding payments would be determined by the Plan
Administrator. Currently, principal amounts owed by
impacted PERS municipalities are as follows:
Co-Chair MacKinnon added that there would be an associated
estimated FY 18 supplemental budget request of $148,000.
9:37:03 AM
REPRESENTATIVE NEAL FOSTER, SPONSOR, explained that the
City of Galena had lost over 25 percent of its population
due to the closure of the United States Air Force facility.
As a result, the city lost a number of city employees; and
was paying for employees it didn't have. The bill was a
remedy to the situation.
PAUL LABOLLE, STAFF, REPRESENTATIVE NEAL FOSTER, stated
that the bill would reset the FY 08 floor for those
communities that lost more than 25 percent of population
between the 2000 and 2010 census. The reset date was FY 12.
The bill also allowed the Public Employees' Retirement
System (PERS) administrator to negotiate the interest rate
on delinquent payments.
Co-Chair MacKinnon summarized the purpose of the bill.
Representative Foster affirmed the co-chair's summary.
Co-Chair MacKinnon mused that the legislature was taking on
the issues one community at a time. She thought the bill
could be perceived by others as unfair. She mentioned the
community of St. George, which had lost all its city
employees.
Representative Foster concurred with the co-chair's
remarks.
Vice-Chair Bishop MOVED to report HB 47 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
HB 47 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN 4(ADM).
9:40:36 AM
AT EASE
9:42:12 AM
RECONVENED