Legislature(2023 - 2024)BARNES 124
04/12/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB147 | |
| HB378 | |
| HB309 | |
| Presentation(s): Pensions and Economics of Retirement | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 150 | TELECONFERENCED | |
| += | SB 147 | TELECONFERENCED | |
| += | HB 378 | TELECONFERENCED | |
| += | HB 309 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 12, 2024
3:17 p.m.
MEMBERS PRESENT
Representative Jesse Sumner, Chair
Representative Justin Ruffridge, Vice Chair
Representative Mike Prax
Representative Stanley Wright
Representative Ashley Carrick
Representative Zack Fields
MEMBERS ABSENT
Representative Dan Saddler
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 147(L&C)
"An Act relating to reemployment rights and benefits; and
providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 378
"An Act relating to theft; relating to organized retail theft;
establishing a statewide marketplace facilitator sales tax;
establishing the organized retail theft fund in the general
fund; and providing for an effective date."
- MOVED HB 378 OUT OF COMMITTEE
HOUSE BILL NO. 309
"An Act relating to the practice of optometry; and relating to
the delegation of routine services of optometry."
- MOVED HB 309 OUT OF COMMITTEE
PRESENTATION(S): PENSIONS AND ECONOMICS OF RETIREMENT
- HEARD
HOUSE BILL NO. 150
"An Act relating to residential building codes; relating to
construction contractors and residential contractor
endorsements; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 147
SHORT TITLE: REEMPLOYMENT BENEFITS
SPONSOR(s): SENATOR(s) KAUFMAN
05/11/23 (S) READ THE FIRST TIME - REFERRALS
05/11/23 (S) L&C, FIN
02/14/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/14/24 (S) Heard & Held
02/14/24 (S) MINUTE(L&C)
02/19/24 (S) FIN REFERRAL REMOVED
02/21/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/21/24 (S) Moved CSSB 147(L&C) Out of Committee
02/21/24 (S) MINUTE(L&C)
02/23/24 (S) L&C RPT CS 2DP 2NR TECHNICAL TITLE
CHANGE
02/23/24 (S) DP: BJORKMAN, GRAY-JACKSON
02/23/24 (S) NR: DUNBAR, MERRICK
03/06/24 (S) TRANSMITTED TO (H)
03/06/24 (S) VERSION: CSSB 147(L&C)
03/11/24 (H) READ THE FIRST TIME - REFERRALS
03/11/24 (H) L&C
03/20/24 (H) L&C AT 3:15 PM BARNES 124
03/20/24 (H) <Bill Hearing Rescheduled to 03/22/24>
03/22/24 (H) L&C AT 3:15 PM BARNES 124
03/22/24 (H) Heard & Held
03/22/24 (H) MINUTE(L&C)
03/29/24 (H) L&C AT 3:15 PM BARNES 124
03/29/24 (H) -- MEETING CANCELED --
04/05/24 (H) L&C AT 3:15 PM BARNES 124
04/05/24 (H) -- MEETING CANCELED --
04/12/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 378
SHORT TITLE: ORG. RETAIL THEFT/FUND;MKTPLACE SALES TAX
SPONSOR(s): REPRESENTATIVE(s) FIELDS
02/20/24 (H) READ THE FIRST TIME - REFERRALS
02/20/24 (H) L&C, JUD, FIN
03/13/24 (H) L&C AT 3:15 PM BARNES 124
03/13/24 (H) <Bill Hearing Rescheduled to 03/15/24>
03/15/24 (H) L&C AT 3:15 PM BARNES 124
03/15/24 (H) -- MEETING CANCELED --
03/22/24 (H) L&C AT 3:15 PM BARNES 124
03/22/24 (H) Heard & Held
03/22/24 (H) MINUTE(L&C)
04/05/24 (H) L&C AT 3:15 PM BARNES 124
04/05/24 (H) -- MEETING CANCELED --
04/08/24 (H) L&C AT 3:15 PM BARNES 124
04/08/24 (H) <Bill Hearing Canceled>
04/12/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 309
SHORT TITLE: DELEGATION OF ROUTINE OPTOMETRY SERVICES
SPONSOR(s): REPRESENTATIVE(s) RUFFRIDGE
02/07/24 (H) READ THE FIRST TIME - REFERRALS
02/07/24 (H) HSS, L&C
03/21/24 (H) HSS AT 3:00 PM DAVIS 106
03/21/24 (H) Heard & Held
03/21/24 (H) MINUTE(HSS)
03/28/24 (H) HSS AT 3:00 PM DAVIS 106
03/28/24 (H) Moved HB 309 Out of Committee
03/28/24 (H) MINUTE(HSS)
04/01/24 (H) HSS RPT 3DP 2NR
04/01/24 (H) DP: RUFFRIDGE, MCCORMICK, PRAX
04/01/24 (H) NR: FIELDS, MINA
04/08/24 (H) L&C AT 3:15 PM BARNES 124
04/08/24 (H) Heard & Held
04/08/24 (H) MINUTE(L&C)
04/12/24 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
SENATOR JAMES KAUFMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, answered questions during
the hearing on CSSB 147(L&C).
CHARLES COLLINS, Director
Division of Workers' Compensation
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
CSSB 147(L&C).
MARGARET BERGMAN, Detective
Anchorage Police Department
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 378.
DAMIEN DELZER, President-Elect
Alaska Optometric Association
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HB 309.
TERESA GHILARDUCCI, PhD, Professor of Economics
The New School for Social Research
Juneau, Alaska
POSITION STATEMENT: Gave a presentation on pensions and the
economics of retirement.
ACTION NARRATIVE
3:17:43 PM
CHAIR JESSE SUMNER called the House Labor and Commerce Standing
Committee meeting to order at 3:17 p.m. Representatives Prax,
Ruffridge, Wright, Carrick, Fields, and Sumner were present at
the call to order.
SB 147-REEMPLOYMENT BENEFITS
3:19:15 PM
REPRESENTATIVE SUMNER announced that the first order of business
would be CS FOR SENATE BILL NO. 147(L&C), "An Act relating to
reemployment rights and benefits; and providing for an effective
date."
3:19:36 PM
The committee took an at-ease at 3:19 p.m.
3:19:43 PM
REPRESENTATIVE RUFFRIDGE moved to adopt Amendment 1 to CSSB
147(L&C), labeled 33-LS0799\S.1, Marx, 3/19/24, which read:
Page 4, lines 6 - 7:
Delete "job analysis developed by the
rehabilitation specialist"
Insert "Occupational Information Network 28.2
database published by the United States Department of
Labor, Employment and Training Administration,"
3:20:04 PM
REPRESENTATIVE FIELDS objected.
3:20:15 PM
REPRESENTATIVE RUFFRIDGE explained that Amendment 1 would change
the language on page 4, lines 6-7, which vaguely states that a
job analysis would be developed by a rehabilitation specialist.
The proposed amendment would add specificity in that the
analysis would come from the U.S. Department of Labor,
Employment and Training Administration (USETA).
REPRESENTATIVE WRIGHT asked to hear from the bill sponsor.
3:21:30 PM
SENATOR JAMES KAUFMAN, Alaska State Legislature, as prime
sponsor, said the intent was to avoid anchoring the process to a
reference that could later be broken or moved through
reorganization.
REPRESENTATIVE FIELDS opined that Amendment 1 is a good idea, as
the reference to the Occupational Information Network ("O*NET")
has "been around forever." He moved to adopt Conceptual
Amendment 1 to Amendment 1 to replace "Occupational Information
Network 28.2" with "Occupational Information Network database"
which would cover this and subsequent permutations of O*NET
28.2.
REPRESENTATIVE WRIGHT objected and asked to hear from the bill
sponsor.
SENATOR KAUFMAN deferred to Mr. Collins.
3:23:54 PM
CHARLES COLLINS, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development (DLWD), said it's
easier for the division to write in regulation and "give guides"
to contractors than be tied to a specific database. He added
that he would not want to come before the legislature again next
year, for example, when they update the database to 28.3.
3:27:55 PM
REPRESENTATIVE CARRICK asked Mr. Collins to elaborate on the
differences between the Selected Characteristics of Occupations
Defined in the Revised Dictionary of Occupational Titles
(SCODRDOT) and O*NET and how the division might be impacted by
using O*NET as a reference point.
MR. COLLINS explained that the division is currently statutory
limited if the job is in O*NET and not in SCODRDOT. He pointed
out that SCODRDOT is referred to in regulation and would still
be used by the rehabilitation specialist. He added that O*NET
is used by the entire department daily.
REPRESENTATIVE CARRICK asked whether it would be practical to
add an additional reference to SCODRDOT.
REPRESENTATIVE RUFFRIDGE said he would not be opposed to that or
listing "Occupational Information Network database published by
the U.S. Department of Labor."
3:32:19 PM
REPRESENTATIVE FIELDS opined that without adding further
specificity, the ambiguity of the current language would kill
the bill.
A roll call vote was taken. Representatives Prax, Ruffridge,
Wright, Carrick, Fields, and Sumner voted in favor of Conceptual
Amendment 1 to Amendment 1. Therefore, Conceptual Amendment 1
to Amendment 1 was adopted by a vote of 6-0.
3:33:48 PM
REPRESENTATIVE FIELDS removed his objection to Amendment 1, as
amended.
REPRESENTATIVE CARRICK objected and asked whether there was
interest from the committee in adding a reference to SCODRDOT in
the legislation. She asked whether the reference to SCODRDOT in
regulation would impact the job analysis.
MR. COLLINS said in regulation 8 AAC 45.525, SCODRDOT is
mentioned twice for all rehabilitation specialists as they
conduct their job analyses, as required under AS 23.30.041.
REPRESENTATIVE CARRICK asked whether additional specificity is
needed beyond Amendment 1, as amended.
REPRESENTATIVE RUFFRIDGE answered no, the language in Amendment
1, as amended would provide a great deal of access to job
descriptions and information on occupations.
3:35:44 PM
REPRESENTATIVE CARRICK removed her objection. There being no
further objection, Amendment 1, as amended, was adopted.
CHAIR SUMNER announced that CSHB 147(L&C), as amended, would be
held over.
HB 378-ORG. RETAIL THEFT/FUND;MKTPLACE SALES TAX
3:36:50 PM
CHAIR SUMNER announced that the next order of business would be
HOUSE BILL NO. 378, "An Act relating to theft; relating to
organized retail theft; establishing a statewide marketplace
facilitator sales tax; establishing the organized retail theft
fund in the general fund; and providing for an effective date."
CHAIR SUMNER opened public testimony on HB 378.
3:37:06 PM
MARGARET BERGMAN, Detective, Anchorage Police Department (APD),
testified during the hearing on HB 378. She provided history on
APD and retail theft. She shared that property crimes are
viewed by many as lower priority, but organized retail crime
(ORC) is often linked to a system of criminal activity regarding
homicide, robberies, and fraud. She explained that
communication between law enforcement and retail is critical to
facilitate a timeline for prosecution. She said Alaska is
currently missing an ORC crime statute and a conspiracy statute
that covers property crimes. ORC is considered a gateway crime
that leads to fund other crimes. She added that repeat suspects
appear to be undeterred by misdemeanor charges.
3:41:29 PM
CHAIR SUMNER closed public testimony on HB 378.
3:41:50 PM
REPRESENTATIVE RUFFRIDGE moved to report HB 378 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 378 was reported from the
House Labor and Commerce Standing Committee.
3:42:16 PM
The committee took an at-ease from 3:42 p.m. to 3:44 p.m.
HB 309-DELEGATION OF ROUTINE OPTOMETRY SERVICES
3:44:17 PM
REPRESENTATIVE SUMNER announced that the next order of business
would be HOUSE BILL NO. 309, "An Act relating to the practice of
optometry; and relating to the delegation of routine services of
optometry."
3:44:35 PM
CHAIR SUMNER opened public testimony on HB 309.
DAMIEN DELZER, President-Elect, Alaska Optometric Association,
Fairbanks, Alaska, testified during the hearing on HB 309. He
said he was available for questions and reiterated that the
association remains grateful to the sponsor and the committee
for addressing this issue on its behalf.
3:45:25 PM
CHAIR SUMNER closed public testimony.
3:45:36 PM
REPRESENTATIVE RUFFRIDGE moved to report HB 309 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 309 was reported from the
House Labor and Commerce Standing Committee.
3:46:12 PM
The committee took an at-ease from 3:46 p.m. to 3:48 p.m.
^PRESENTATION(S): Pensions and Economics of Retirement
PRESENTATION(S): Pensions and Economics of Retirement
3:48:31 PM
CHAIR SUMNER announced that the final order of business would be
a presentation by Dr. Teresa Ghilarducci on pensions and the
economics of retirement.
3:48:56 PM
TERESA GHILARDUCCI, PhD, Professor of Economics, The New School
for Social Research, shared her professional background and vast
experience helping employers and worker representatives analyze
their pension systems. She said actuaries fail to describe the
benefits of various pension designs, specifically that of a
defined benefits (DB) system. She discussed the four main
advantages of a DB plan: reduced turnover; more efficiency and a
higher rate of return on the dollar; the multiplier effect of a
public employee's aggregate demand; and more productive
employees in the public sector workforce.
3:58:30 PM
DR. GHILARDUCCI said a benefit to workers in a DB plan is a
lower likelihood of being poor or downwardly mobile into
retirement largely due to the inability to withdraw from the
account. The withdrawal aspect of a defined contribution (DC)
plan is its most lethal flaw. The risk of withdrawal is even
worse for women and non-white employees embedded in a kinship
network, as those people are sources of wealth for their family
members. Another benefit to DB workers is the higher rate of
return on the money invested.
4:02:01 PM
REPRESENTATIVE FIELDS reported that group DB plans have a higher
benefit per dollar invested. He asked Dr. Ghilarducci to
explain why.
DR. GHILARDUCCI explained that in a DC plan, people have to save
20 percent more to capitalize on the longevity risk of running
out of money the older they live. In a group plan, it's
insurance against that longevity risk.
REPRESENTATIVE CARRICK asked what age people start to think
about retirement when signing up for state employment, for
example.
DR. GHILARDUCCI said the age of being concerned about one's
financial futures is much younger now, which is attributable to
more education and young people watching their parents. She
reported that currently, Millennials are most anxious about
their financial future.
REPRESENTATIVE CARRICK pointed out that ages 28-40 is precisely
the demographic that is out-migrating from Alaska.
4:06:27 PM
REPRESENTATIVE RUFFRIDGE conveyed the argument that "everyone is
going away from DB" and questioned the validity and rationale
behind that statement.
DR. GHILARDUCCI explained that around 2005 when Alaska decided
to get rid of its DB plan, there was a rash of interest from
other states on this issue. She noted that Alaska was the only
state to "experiment" in this way for 15 years; consequently,
all eyes are on Alaska's decision to either return to a DB plan
or maintain its DC system. She noted the interest in other
states to return to a DB plan with either a hybrid plan or
better, more stable design.
4:10:24 PM
REPRESENTATIVE SUMNER asked whether DB increases retention
across all job classifications.
DR. GHILARDUCCI said studies show that across all job
categories, a DB plan slows turnover.
4:12:27 PM
REPRESENTATIVE FIELDS asked whether there is a measurement of
duration to peak productivity for public employee jobs. In
addition, he asked how employers quantify productivity benefits.
DR. GHILARDUCCI answered that productivity can be measured
indirectly by what kind of employees receive wage increases.
Alternatively, a 401(k) could be an indicator of productivity in
that those employees who save may be considered a more
productive worker.
REPRESENTATIVE FIELDS asked about the duration for other types
of public sector jobs.
DR. GHILARDUCCI surmised that for snowplow drivers, it would
take five or six years to obtain peak productivity due to the
accumulation of local knowledge and the ability to make
judgment. For teachers, she said, it takes seven to twelve
years.
4:18:27 PM
REPRESENTATIVE PRAX asked whether there is a book or other
resources that would help employers understand how to apply
this.
DR. GHILARDUCCI cited "The Economics of Personnel" by Edward
Lazear and her book, "Labor's Capital: The Economics and
Politics of Private Pensions."
REPRESENTATIVE PRAX said the other side of the issue is the
employer's future expectations. He pointed out that Alaska is
required to pay retirement benefits before education, which is a
big risk that's important to understand.
DR. GHILARDUCCI identified other states, such as California,
that promised benefits without funding them. She outlined how
an DB plan has to be well planned for the future.
4:24:33 PM
REPRESENTATIVE FIELDS shared his understanding that old DB plans
are inherently risky because current workers are funding former
workers and that new DB plans are essentially group 401(k) plans
with a reserve fund for protection during market downturns. He
asked whether that's an accurate understanding and whether there
are other new DB plan designs.
DR. GHILARDUCCI said DB plans can be even simpler [than a group
investment pool with a reserve fund]. Some DB plans require
that the employer always puts in money; other funds often seen
in Europe - involve shared risk to protect the employer.
4:27:07 PM
REPRESENTATIVE RUFFRIDGE asked for an example of a public sector
[employer] who departed and then returned to a DB plan.
DR. GHILARDUCCI said there's no analogue for Alaska's situation
because the state's DC plan has been in place for so long. She
cited Nebraska, West Virginia teachers, and Indiana lottery
workers.
REPRESENTATIVE RUFFRIDGE asked whether there are data sets from
the aforementioned states that show a decline in retention or
recruitment.
DR. GHILARDUCCI did not know of any studies that looked post-
return to the DB plan. She offered to follow up with the
requested information.
4:31:28 PM
REPRESENTATIVE WRIGHT asked how the retirement system works in
states with both a DB and DC plan.
DR. GHILARDUCCI said most states let their employees save on top
of their DB plan; further, no state has entirely replaced its DB
plan with a DC plan.
4:32:49 PM
REPRESENTATIVE CARRICK asked whether some states have partial DB
plans for certain groups of employees. In addition, she asked
how the health of the overall plan had fared in those states.
DR. GHILARDUCCI stated that Ohio and Indiana have partial DB and
partial DC plans; however, that structure was carefully
implemented and has been in place for 75 to 85 years. Both
states had a low benefit DB plan that was funded at around 70,
80, or 90 percent, and in addition to allowing participants to
invest in that pool, a DC plan was provided on top of that.
4:35:26 PM
REPRESENTATIVE PRAX stated that the highest risk of a DB plan
for both employers and employees is health benefits. He asked
how to make a "best guess" at that.
DR. GHILARDUCCI said funding post-retirement health benefits is
expensive and one of the best ways to do it is to ensure that
employees are enrolled in Medicare. She emphasized the
importance of involving the employer in post-retirement medical
benefits because they can serve as an advocate for the
employees.
REPRESENTATIVE PRAX said one of the things that is causing
people to think about retirement is the news that Medicare and
Social Security are reaching a crisis point. He questioned
where people could learn more about that topic.
DR. GHILARDUCCI said the consensus in the U.S. Senate [Committee
on Health, Education, Labor, and Pensions] is that the country
has arrived at a Social Security insolvency. She suggested
raising payroll tax or expanding the base in response. More
specifically, if everyone in the system was treated the same and
taxes were taken out of their salary no matter how high, full
solvency could almost be attained.
4:40:58 PM
REPRESENTATIVE FIELDS stated that Empower Retirement is
advocating against DB because they want to keep collecting fees
from the state. He asked whether this is a common practice
among Wall Street firms that want to maintain their fee
collection.
DR. GHILARDUCCI answered, "Always," adding that there is a split
in Wall Street between retail managers who are in favor of money
in individual accounts and wholesale managers who are in favor
of the DB plan.
REPRESENTATIVE FIELDS asked for the name of Dr. Ghilarducci's
book on the subject.
DR. GHILARDUCCI responded, ["Rescuing Retirement"], by Tony
James and Teresa Ghilarducci.
4:44:57 PM
REPRESENTATIVE RUFFRIDGE asked whether a new entity could attach
itself to an ongoing pool in a healthy way.
DR. GHILARDUCCI provided an analogue to employers grouping
together and bringing people in and out.
4:47:07 PM
REPRESENTATIVE SUMNER inquired as to the important aspects of DB
versus DC in terms of retention.
DR. GHILARDUCCI said DB plans are tenure weighted in a number of
ways because as the employees stay in the system, it becomes
more valuable. In part, this is due to the vesting, as well as
the increase in earnings which grows in value. Another aspect
is that employers can stop contributing after a certain age.
4:50:40 PM
REPRESENTATIVE FIELDS referenced SB 88 and guessed that this
management of retirement savings in not modeled in that bill.
DR. GHILARDUCCI said she did not know the answer. Nonetheless,
she shared that keeping people beyond the five-year mark would
save the state $76 million per year on severance and recruitment
costs alone.
4:51:45 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor & Commerce Standing Committee meeting was adjourned at
4:51 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Ghilarducci Report To House L&C .pdf |
HL&C 4/12/2024 3:15:00 PM |
|
| SB147 Amendment.pdf |
HL&C 4/12/2024 3:15:00 PM |
SB 147 |
| HB309 Amendment.pdf |
HL&C 4/12/2024 3:15:00 PM |
HB 309 |