Legislature(1993 - 1994)
02/09/1993 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 9, 1993
8:00 a.m.
MEMBERS PRESENT
Representative Al Vezey, Chairman
Representative Pete Kott, Vice Chairman
Representative Harley Olberg
Representative Gary Davis
Representative Fran Ulmer
Representative Bettye Davis
Representative Jerry Sanders
MEMBERS ABSENT
None
OTHER HOUSE MEMBERS PRESENT
Representative Terry Martin
COMMITTEE CALENDAR
*HCR 5: Relating to the twenty-fifth annual Girls' State.
MOVED OUT OF COMMITTEE WITH A DO PASS
RECOMMENDATION
HJR 3: Proposing amendments to the Constitution of the
State of Alaska limiting tenure in the
legislature.
HELD IN COMMITTEE FOR FURTHER CONSIDERATION
HB 35: "An Act relating to deposits to the budget reserve
fund."
HELD IN COMMITTEE FOR FURTHER CONSIDERATION
*HB 48: "An Act relating to delayed payment of
legislators' salaries, and to state agency
operating and capital budgets; and providing for
an effective date."
MOVED OUT OF COMMITTEE WITH A DO PASS
RECOMMENDATION
HB 36: "An Act relating to retirement incentive programs
for the public employees' retirement system, the
teachers' retirement system, and certain persons
under the judicial retirement system; and
providing for an effective date."
HELD IN COMMITTEE FOR FURTHER CONSIDERATION
(* first public hearing)
WITNESS REGISTER
Jon Peterson, Legislative Aide
to Representative Gail Phillips
State Capitol, Room 216
Juneau, AK 99811-1182
465-3718
Position Statement: Testified on behalf of the sponsor in
support of HCR 5
Representative Terry Martin
State Capitol, Room 411
Juneau, AK 99811-1182
465-3783
Position Statement: Prime Sponsor, HB 35
Representative Fran Ulmer
State Capitol, Room 601 Court
Juneau, Alaska 99811-1182
465-4947
Position Statement: Prime Sponsor, SSHB 48
Vernon Marshall, Executive Director
NEA, Alaska
114 2nd Street
Juneau, AK 99811
586-3080
Position Statement: Supported HB 36
Robert Stalnaker, Director
Division of Retirement and Benefits
Department of Administration
P.O. Box 110203
Juneau, AK 99811-0203
465-4470
Position Statement: Provided information on HB 36
PREVIOUS ACTION
BILL: HCR 5
SHORT TITLE: TWENTY-FIFTH ANNUAL GIRLS STATE
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) PHILLIPS,James,Toohey,Ulmer,
Therriault, Grussendorf
TITLE: Relating to the twenty-fifth annual Girls' State.
JRN-DATE JRN-PG ACTION
01/22/93 126 (H) READ THE FIRST TIME/REFERRAL(S)
01/22/93 126 (H) STATE AFFAIRS
02/09/93 (H) STA AT 08:00 AM CAPITOL 102
BILL: HJR 3
SHORT TITLE: LIMITING TERMS OF LEGISLATORS
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) MARTIN,Kott
TITLE: Proposing amendments to the Constitution of the State
of Alaska limiting tenure in the legislature.
JRN-DATE JRN-PG ACTION
01/04/93 22 (H) PREFILE RELEASED
01/11/93 22 (H) READ THE FIRST TIME/REFERRAL(S)
01/11/93 22 (H) STATE AFFAIRS, JUDICIARY,
FINANCE
01/26/93 (H) STA AT 08:00 AM CAPITOL 102
01/26/93 (H) MINUTE(STA)
01/26/93 (H) MINUTE(STA)
01/26/93 (H) MINUTE(STA)
01/26/93 (H) MINUTE(STA)
01/30/93 (H) STA AT 08:00 AM CAPITOL 102
01/30/93 (H) MINUTE(STA)
02/06/93 (H) STA AT 08:00 AM CAPITOL 102
02/09/93 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 35
SHORT TITLE: DEPOSITS TO THE BUDGET RESERVE FUND
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) MARTIN,Therriault
TITLE: "An Act relating to deposits to the budget reserve
fund."
JRN-DATE JRN-PG ACTION
01/04/93 33 (H) PREFILE RELEASED
01/11/93 33 (H) READ THE FIRST TIME/REFERRAL(S)
01/11/93 33 (H) STATE AFFAIRS, JUDICIARY,
FINANCE
01/26/93 (H) STA AT 08:00 AM CAPITOL 102
01/26/93 (H) MINUTE(STA)
01/30/93 (H) STA AT 08:00 AM CAPITOL 102
01/30/93 (H) MINUTE(STA)
02/06/93 (H) STA AT 08:00 AM CAPITOL 102
02/09/93 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 48
SHORT TITLE: DELAYED PAYMENT OF LEGISLATORS' SALARIES
BILL VERSION: SSHB 48
SPONSOR(S): REPRESENTATIVE(S) ULMER,Navarre,B.Davis,Carney,
Nordlund
TITLE: "An Act relating to delayed payment of legislators'
salaries, and to state agency operating and capital budgets;
and providing for an effective date."
JRN-DATE JRN-PG ACTION
01/13/93 52 (H) READ THE FIRST TIME/REFERRAL(S)
01/13/93 52 (H) STATE AFFAIRS, JUDICIARY,
FINANCE
01/14/93 62 (H) COSPONSOR(S): B.DAVIS
01/20/93 117 (H) COSPONSOR(S): CARNEY
01/25/93 151 (H) SPONSOR SUBSTITUTE INTRODUCED-
REFERRALS
01/25/93 152 (H) STATE AFFAIRS, JUDICIARY,
FINANCE
01/27/93 168 (H) COSPONSOR(S): NORDLUND
02/09/93 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 36
SHORT TITLE: RETIREMENT INCENTIVE PROGRAM
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) MACKIE,Hudson,Ulmer,B.Davis,
Brice
TITLE: "An Act relating to retirement incentive programs for
the public employees' retirement system, the teachers'
retirement system, and certain persons under the judicial
retirement system; and providing for an effective date."
JRN-DATE JRN-PG ACTION
01/08/93 33 (H) PREFILE RELEASED
01/11/93 33 (H) READ THE FIRST TIME/REFERRAL(S)
01/11/93 33 (H) STATE AFFAIRS, LABOR & COMMERCE,
FINANCE
01/28/93 (H) STA AT 08:00 AM CAPITOL 102
01/28/93 (H) MINUTE(STA)
01/28/93 (H) MINUTE(STA)
01/29/93 182 (H) COSPONSOR(S): HUDSON- FIRST
COSPONSOR
01/29/93 182 (H) COSPONSOR(S): B.DAVIS, BRICE
01/30/93 (H) STA AT 08:00 AM CAPITOL 102
01/30/93 (H) MINUTE(STA)
01/30/93 (H) MINUTE(STA)
02/04/93 (H) STA AT 08:00 AM CAPITOL 102
02/06/93 (H) STA AT 08:00 AM CAPITOL 102
02/09/93 (H) STA AT 08:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 93-15, SIDE A
Number 000
The ninth meeting of the House State Affairs Committee was
called to order at 8:01 a.m. on Tuesday, February 9, 1993,
by Chairman Vezey. He noted a quorum was present.
HCR 5: TWENTY-FIFTH ANNUAL GIRLS STATE
CHAIRMAN AL VEZEY read the title of HCR 5 and asked if Jon
Peterson would like to discuss the resolution on behalf of
Representative Gail Phillips, its prime sponsor.
Number 045
JON PETERSON, LEGISLATIVE AIDE FOR REPRESENTATIVE GAIL
PHILLIPS spoke in support of HCR 5 for the prime sponsor.
Number 072
REPRESENTATIVE GARY DAVIS MOVED to pass out HCR 5. Roll
call was taken with five yeas and two absent legislators not
voting.
HJR 3: LIMITING TERMS OF LEGISLATORS
HB 35: DEPOSITS TO THE BUDGET RESERVE FUND
Number 090
CHAIRMAN VEZEY said the committee substitute for HJR 3 was
not accurate, so he moved on to HB 35.
Number 117
REPRESENTATIVE TERRY MARTIN, PRIME SPONSOR of HB 35,
discussed the budget reserve fund. He asked the date be
amended to December 16.
Number 156
CHAIRMAN VEZEY stated for the record that Representative
Fran Ulmer joined the meeting at 8:09 a.m. He asked for a
roll call vote to adopt the HB 35 amendment. Roll call was
taken with five yeas, one abstained, and one absent.
HJR 3: LIMITING TERMS OF LEGISLATORS
Number 190
REPRESENTATIVE PETE KOTT suggested the committee should wait
to discuss HJR 3 until the committee substitute was
accurate.
SSHB 48: DELAYED PAYMENT OF LEGISLATORS' SALARIES
Number 200
REPRESENTATIVE FRAN ULMER, PRIME SPONSOR of SSHB 48, stated
the purpose of the bill was to create an incentive for the
legislature to complete the operating budget in a more
timely manner. Until the budget passed no legislators would
be paid. She shared her frustration with the bottleneck in
the finance committee toward the end of session which
interfered with the process of getting a bill to pass each
year. She believed SSHB 48 would help the operating budget
bill to pass more quickly.
Number 257
CHAIRMAN VEZEY asked if SSHB 48 would confiscate or just
delay the payment to each legislator.
REPRESENTATIVE ULMER responded it would be a legal problem
if the legislator's income was confiscated, so SSHB 48 would
be to delay payment only.
Number 269
CHAIRMAN VEZEY asked if delaying a check of $400.00 per week
would really be an incentive.
Number 274
REPRESENTATIVE ULMER said any incentive would be helpful
because rules and guidelines were being ignored. Maybe the
public would give more attention if, by the 90th day, the
capital budget was not done, she added.
(Chairman Vezey stated Representative Bettye Davis joined
the committee at 8:15 a.m.)
Number 292
REPRESENTATIVE ULMER discussed the changes in SSHB 48 on
line 12 page 2. The Governor must submit the budget to the
legislature by the 45th day instead of the 60th day, she
noted.
Number 306
REPRESENTATIVE KOTT did not believe the $400 would be a
strong enough incentive, but felt the limitation might
pressure the budget to be done in an untimely manner. This
incentive affected the $400 salary only and no other funds,
he pointed out.
Number 324
REPRESENTATIVE HARLEY OLBERG asked why withholding the
salary was not limited to members of the Finance Committee
only.
Number 329
REPRESENTATIVE ULMER said the influence on members of the
committee from peer pressure would also be an incentive.
Number 340
CHAIRMAN VEZEY asked about the intent of 30 days being set
aside for non-budget attention.
Number 344
REPRESENTATIVE ULMER said bills with fiscal notes and the
operating budget would get crunched together. There would
be better decision making if the operating budget was
completed first, and less leverage against legislators and
their bills would streamline the process, she added.
Number 364
REPRESENTATIVE KOTT asked if the change to a 90 day session
from a 120 day session would automatically change this
problem.
Number 370
REPRESENTATIVE ULMER said there would still be a crunch in
the Finance Committee. By pacing legislators to break up
the duties early in the session, things would be better
organized, she believed.
Number 381
REPRESENTATIVE GARY DAVIS applauded any effort to improve
the system. To delay salary payment might not be effective
but the message was good and might help the legislative
image, he believed. He had thought of ways to improve the
legislative process but wanted to wait a while to introduce
his ideas. He wanted to see the response of other
legislators to SSHB 48.
Number 412
REPRESENTATIVE OLBERG said the money was symbolic, but the
media could hold the legislature's "feet to the fire." He
shared his frustration with the system and hoped to see
SSHB 48 move out of committee.
Number 424
CHAIRMAN VEZEY discussed the interest paid for withholding
legislative salaries for 30 days would total less than $600
for all legislators as compared to $8 million spent annually
on lobbying.
Number 431
REPRESENTATIVE KOTT asked the committee to MOVE SSHB 48.
Roll call was taken with a unanimous yes vote.
HB 36: RETIREMENT INCENTIVE PROGRAM
Number 443
CHAIRMAN VEZEY spoke on the following handouts:
"State of Alaska, Department of Revenue, Division of
Treasury, Teachers Retirement Trust Fund, Financial
Statements, October 31, 1992;" "State of Alaska,
Department of Revenue, Division of Treasury, Public
Employees Retirement Trust Fund, Financial Statements,
October 31, 1992;" "State of Alaska Judicial Retirement
System, Financial Statements and Supplemental
Schedules, June 30, 1992 and 1991, with independent
auditors' report thereon by KPMG Peat Marwick;" "State
of Alaska Teachers' Retirement System, Financial
Statements and Supplemental Schedules, June 30, 1992
and 1991, with independent auditors' report thereon by
KPMG Peat Marwick;" "State of Alaska Public Employees'
Retirement System, Financial Statements and
Supplemental Schedules, June 30, 1992 and 1991, with
independent auditors' report thereon by KPMG Peat
Marwick;" and, "ALASKA, Public Employees' Retirement
System, Teachers' Retirement System, Component Unit,
Annual Financial Report, Fiscal Year Ended June 30,
1992, Walter J. Hickel, Governor."
These handouts were in the committee packet regarding
financial statements and actuarial reports within the
retirement funds.
Number 605
VERNON MARSHALL, EXECUTIVE DIRECTOR, NEA ALASKA, spoke in
support of HB 36 because of reduced personnel costs. His
written statement was included in the packet.
TAPE 93-15, SIDE B
Number 000
CHAIRMAN VEZEY responded to Mr. Marshall's statements
regarding the savings based on teacher contribution.
MR. MARSHALL discussed the net savings of the first and
second Retirement Incentive Program (RIP), for the Anchorage
School District.
Number 067
CHAIRMAN VEZEY discussed the total cost of the pension
system funds being a one time cost over a three year period.
Number 075
MR. MARSHALL said the cost to employers was $6.3 million.
References were made to the handout by Mr. Marshall.
Number 110
CHAIRMAN VEZEY talked about the employer having total
discretion to calculate savings. The estimate to be saved
and actual payment had a disparity in numbers.
MR. MARSHALL discussed the disparity and costs for the
school district which utilized the RIP.
Number 182
CHAIRMAN VEZEY said a lot of dollars were at stake and the
program would continue to be looked into.
Number 190
ROBERT STALNAKER, DIRECTOR, DIVISION OF RETIREMENT AND
BENEFITS, DEPARTMENT OF ADMINISTRATION, discussed the two
past RIP costs to employees and the formula used. The
employer cost fluctuates, and the burden of utilizing the
program was on the employer, he said.
Number 228
REPRESENTATIVE G. DAVIS asked what the unfunded balance
meant.
MR. STALNAKER discussed the unfunded liability and funded
liability. The balance was calculated over 25 years and the
assumptions of savings and costs were on the employer, he
said. References were made to reports within the committee.
Number 282
REPRESENTATIVE G. DAVIS asked if the system had been changed
over time.
MR. STALNAKER explained the history of the changes within
the system relating to cost of living increases. He also
discussed cost containment.
Number 351
CHAIRMAN VEZEY discussed the differences in the unfunded and
funded actual amounts found within the financial reports of
the teachers and public employees.
MR. STALNAKER discussed the components of the 1992 report
titled "Alaska." Discussion continued regarding all the
reports found in the committee members packets. The topics
of discussion included fluctuations, assumptions,
contribution rates, financial projections of debt, unfunded
liabilities, and funding ratios.
TAPE 93-16, SIDE A
Number 191
REPRESENTATIVE G. DAVIS asked if the RIP imposed employee
turn over.
MR. STALNAKER replied in the affirmative.
Number 217
REPRESENTATIVE G. DAVIS asked what effects economy changes
would make to RIP.
MR. STALNAKER said any fluctuation would change the
projected liability.
Number 231
CHAIRMAN VEZEY asked if "what if" projections could be
created, analyzed and reported back to the committee.
Number 243
MR. STALNAKER replied in the affirmative.
ADJOURNMENT
Number 245
CHAIRMAN VEZEY adjourned the meeting at 9:55 a.m., and HB 36
was held over for further consideration.
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