Legislature(2015 - 2016)HOUSE FINANCE 519
04/06/2016 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB124 | |
| HB47 | |
| HB188 | |
| HCR4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 47 | TELECONFERENCED | |
| += | SB 124 | TELECONFERENCED | |
| + | HB 241 | TELECONFERENCED | |
| + | HCR 4 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | HB 188 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 6, 2016
8:49 a.m.
8:49:27 AM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 8:49 a.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Bill Stoltze, Sponsor; Representative Neil Foster,
Sponsor, House District; Paul LaBolle, Staff,
Representative Neil Foster; Kevin Worley, CEO, Division of
Retirements and Benefits, Department of Administration;
Kathy Wasserman, Executive Director, Alaska Municipal
League; Brodie Anderson, Staff, Representative Steve
Thompson; Kathie Wasserman, Alaska Municipal League,
Anchorage; Kathy Lea, Chief Pension Officer, Division of
Retirement and Benefits, Department of Administration; Kim
Skipper, Staff, Representative Dan Saddler; Jeff Jessee,
Chief Executive Officer, Alaska Mental Health Trust
Authority; Sara Kuecim, Self, Juneau; Pam Leary, Director,
Division of Treasury, Department of Revenue; Representative
Shelley Hughes, Sponsor; Stuart Krueger, Staff,
Representative Shelley Hughes.
PRESENT VIA TELECONFERENCE
Shanda Huntington, City of Galena, Galena; Lori King, Self,
Juneau; Stuart Spielman, Autism Speaks, Washington DC;
Patrick Reinhart, Governor's Council on Disabilities and
Special Ed, Anchorage; Mike Coons, Legislative Director,
Citizens Initiatives.
SUMMARY
HB 47 PERS CONTRIBUTIONS BY MUNICIPALITIES
CSHB 47 (FIN) was REPORTED out of committee with
a "do pass" recommendation and with one new
fiscal impact note by the Department of
Administration.
HB 188 PERSON W/DISABILITY SAVINGS ACCOUNTS
HB 188 was HEARD and HELD in committee for
further consideration.
HCR 4 US COUNTERMAND CONVENTION DELEGATES
CSHCR 4 (STA) was REPORTED out of committee with
a "do pass" recommendation and with one new
indeterminate fiscal note by the Legislature.
SB 124 EXTEND SUNSET ON AK COMMISSION ON AGING
SB 124 was REPORTED out of committee with a "do
pass" recommendation and with a previous fiscal
impact note: FN3 (SFC for DHS).
SENATE BILL NO. 124
"An Act extending the termination date of the Alaska
Commission on Aging; and providing for an effective
date."
8:50:48 AM
SENATOR BILL STOLTZE, SPONSOR, remarked that the only
outstanding conversation related to the bill was about the
fiscal notes. He noted the reduction of one, with a
recommendation of two position cuts. He stated that it was
a determination by the administration in the following
fiscal year. He shared that the commission had recommended
the sunset. He felt that there was broad public support of
the bill, and a strong constituency.
Co-Chair Thompson appreciated the bill being brought
forward.
8:52:07 AM
AT EASE
8:53:07 AM
RECONVENED
Representative Gara referred to the fiscal note. He asked
about the positions being deleted. Senator Stoltze stated
he was not at the epicenter of the finance. He thought
there was a suggestion for deeper cuts. He thought the
deletion of 2 positions presented a stark reality. He did
not think having a place holder for discussion was
necessary. He thought the legislature could use a reminder
of the
Co-Chair Thompson reiterated that the bill limited one
position, and shared that the following legislatures could
make more reductions.
Co-Chair Neuman agreed with Senator Stoltze that cuts were
necessary. He thought the fiscal note should remain as
written.
8:57:00 AM
Representative Guttenberg emphasized that the reduction in
the note reflected a 50 percent reduction of staff over 2
years. He spoke to the fact that the people on the
commission were overachievers and was concerned with
placing too much of a burden. He thought the cuts were too
steep. He suggested coming back in a year's time to
reevaluate.
Representative Kawasaki asked about moving to amend the
fiscal note. Co-Chair Thompson replied that he did not want
to amend the fiscal note.
Representative Kawasaki pointed out that the report (copy
on file) from the Commission on Aging spoke specifically to
state implementation of the plan. He stressed that the work
on the plan began in FY 14, which was two years ahead of
the work. It was anticipated that the commission would work
on the revised plan for submission to the federal
government.
Representative Gara thought the bill was too important to
hold up the commission. She thought it would be best to get
the bill passed and ready to move forward to get it to the
floor for a vote.
Vice-Chair Saddler relayed that the significant decline in
revenue was not a surprise to the commission.
9:03:23 AM
Representative Gara referred to the second page of the
fiscal note. He read a portion of the fiscal note memo. He
indicated that the reduction would diminish the agency's
ability to fulfill its statutory responsibilities. He felt
that the committee should only cut one position, and
evaluate whether or not to cut another position in the
future.
Representative Gara MOVED to ADOPT conceptual Amendment 1
to the fiscal note:
The fiscal note would only delete one position in the
current year, without the statement of intent that a
second position be deleting the following year.
Representative Wilson OBJECTED for discussion. She remarked
that the state plan was written, and updated with changes.
She felt that the commission would continue to progress and
make changes. She appreciated the reduction of one
position, and stressed that there would be an evaluation of
the impact of that reduction.
Representative Guttenberg reemphasized his position that it
would be easier to keep the third position currently and
cut next year. He was concerned of the
Representative Munoz remarked that it appeared that there
were three positions reduced, because $93,000 was cut from
FY 17 and an additional $200,000 in FY 18.
9:07:32 AM
Vice-Chair Saddler emphasized that the finance committee
made spending and reduction decisions.
Senator Stoltze was not anticipating a discussion about the
fiscal note. He relayed his conversations with the other
body. He relayed that there had been an array of
discussions.
Representative Wilson MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Guttenberg, Kawasaki, Munoz, Edgmon, Gara
OPPOSED: Gattis, Pruitt, Saddler, Wilson, Neuman, Thompson
The MOTION FAILED (5/6). Conceptual Amendment 1 failed to
be adopted.
Vice-Chair Saddler reviewed the fiscal note.
Co-Chair Neuman MOVED to REPORT SB 124 out of committee
with individual recommendations and the accompanying fiscal
note.
SB 124 was REPORTED out of committee with a "do pass"
recommendation and with a previous fiscal impact note: FN3
(SFC for DHS).
9:13:36 AM
AT EASE
9:16:36 AM
RECONVENED
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."
9:16:41 AM
Co-Chair Neuman MOVED to ADOPT the proposed committee
substitute for HB 47 (FIN), Work Draft (29-LS0285\I). There
being NO OBJECTION, it was so ordered.
Co-Chair Thompson queried the changes in the committee
substitute.
BRODIE ANDERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
relayed the changes to the bill. He stated that there was a
title change to conform to the changes made within the
bill. He shared that the bill added a new Section 1, and
the sponsor will explain the new section. He relayed that
the CS deleted the old Section 3, which had a retroactive
clause. He stated that the CS added a new Section 4, and
the sponsor was prepared to explain that new section.
REPRESENTATIVE NEIL FOSTER, SPONSOR, indicated his staff
would be presenting the bill.
PAUL LABOLLE, STAFF, REPRESENTATIVE NEIL FOSTER, reviewed
the bill. He looked at Section 1, page 1, line 12, which
was the new subsection under 39.35.610 allowing the
administrator to determine the rate of assessed interest.
He stated that Section 2 was the old Section 1. He relayed
that Section 3 added a reference to the new subsection that
was created in Section 4. He shared that Section 4 allowed
for the administrator of Public Employees' Retirement
System (PERS) to assess an interest rate at a lower value
than otherwise dictated in the section, if the employer was
a municipality who had lost more than 25 percent of their
population between the 2000 and 2010 census.
Representative Munoz queried the issue of a community
regaining its population. Mr. Labolle responded that it
would have to be done through additional legislation.
9:20:36 AM
Co-Chair Neuman asked about the migration from rural
communities. Representative Foster responded that, overall,
there were some small migration numbers from rural to urban
areas. He remarked that Galena had a major migration out of
the area, because of the relocation of the military base.
Mr. Labolle agreed that the military base was relocated
from Galena. He stressed that the legislation was specified
to those communities who lost population from the 2000 to
2010 census. Therefore, future population loss would not be
affected by the confines of the legislation. He pointed out
that the census affected Galena, Pelican, Atka, St. George,
and Anderson. He explained that St. George and Anderson did
not have any PERS employees, so they were not affected by
the legislation. He deferred to the department to explain
why Pelican and Atka were not affected by the legislation.
Representative Guttenberg noted that the bill's language
was permissive, and not required. He wondered if that was
the intent of the legislation. Mr. Labolle replied in the
affirmative. He furthered that the intent of the bill was
to allow for negotiation. The original version of the bill
had a retroactive effective date, and changed the
delinquency rate in statute for affected communities. It
was determined that there should be negotiation between the
administrator of the program and the affected employer.
Representative Guttenberg wondered how the 2020 census
would affect Anderson and the legislation. Mr. Labolle
replied that the legislation was a "floor not a ceiling."
He explained that the current payments were 22 percent of
the current salaries or 22 percent of the 2008 floor,
whichever is greater. He explained that a growing community
with growing employees, the community would pay the greater
of the floor. Furthermore, Anderson would not need to pay
the 22 percent of current employee salaries.
9:25:28 AM
Representative Gara looked at page 2 of the bill, and noted
the two possible calculations for how much the municipality
should pay for the PERS employees: the greater of 22
percent of the number of current employees; or the number
of employees in 2008. He remarked that he did not
understand why the 2008 year was specified. He surmised
that if the number of current employees was larger than
what was in the new section, then the payment was 22
percent of the number of current employees. Mr. Labolle
responded in the affirmative. He explained that there was a
bill in 2008, which took the failing PERS systems, and
pooled them into one state system. He remarked that there
was a concern that employers could lay off employees, hire
contract employees, and therefore only pay the 22 percent
of the current employees. Thereby leaving the remaining
outstanding liability on the state. The floor was created
to prevent that possibility.
Representative Kawasaki asked for Mr. Labolle to explain
the retroactivity. Mr. Labolle thought Representative
Kawasaki was looking at a previous version of the bill.
Representative Kawasaki asked if there was not
retroactivity. Mr. Labolle confirmed that there was no
retroactivity in the bill.
Co-Chair Thompson OPENED public testimony.
9:28:35 AM
SHANDA HUNTINGTON, CITY OF GALENA, GALENA (via
teleconference), spoke in favor of the policy of imposing a
floor. She remarked that HB 47 did not change PERS policy.
She provided some history. Galena declined its activity in
recent years, and city services plummeted. She pointed out
that there were 17 employees in 2012. The difference
between the two floors was significant. Galena's
contribution was significantly high. She provided some
statistical information regarding PERS contributions paid
by Galena. She added that HB 47 was not a loophole.
9:36:42 AM
KATHIE WASSERMAN, ALASKA MUNICIPAL LEAGUE, ANCHORAGE,
indicated that the League was in favor of HB 47. She
relayed the difficulty of conveying to the legislature the
challenges. She spoke to her previous experience as the
mayor of Pelican.
Co-Chair Thompson CLOSED public testimony.
Representative Gara asked about the penalties. Mr. Labolle
replied that previous versions of the bill had penalties
and retroactivity.
Representative Munoz asked if the past liabilities had been
paid. Mr. Labolle believed the amount was the amount
unpaid, but deferred to the administration for the actual
amount.
Representative Munoz asked for an explanation of
termination study. Mr. Labolle replied that the bill did
not address termination studies.
Representative Munoz noted that a testifier had addressed a
termination study.
Co-Chair Thompson agreed to provide that information, but
remarked that that it did not relate to the bill.
Representative Munoz disagreed, because a community must
initiate a termination study when an employee was
terminated because the employer could not afford the
employee. It would affect their finances, because they
needed to pay toward the costs. She wanted a fuller
understanding of the requirement of a termination study.
9:42:04 AM
KATHY LEA, CHIEF PENSION OFFICER, DIVISION OF RETIREMENT
AND BENEFITS, DEPARTMENT OF ADMINISTRATION, shared that
there were two types of termination costs in PERS. One was
with PERS since the inception in 1961, which was a common
feature in multi-employer plans. She stated that there were
some plans that required the study. She remarked that, if
an employer eliminates coverage for a group,
classification, or department, the employer must pay the
cost that arises from the action. The costs were based on a
change in the behavior of people who were close to
retirement. She stressed that the majority of people who
reach normal retirement age, did not retire at that point.
She pointed out that only 16 percent of people retire at
normal retirement age. She stated that most retire
approximately four years after the normal retirement date,
which was how the plan was funded. She remarked that
terminating a group changed that behavior. Therefore the
person who was not currently covered by PERS would draw the
retirement at the first eligible date. At that point, the
fund was not fully funded. The employer must then pay the
difference in the funding from the point at normal
retirement to the point the plan anticipated it would be
funded at 100. Terminating employees who were not vested
then become 100 percent vested in the PERS benefits. She
explained that in 2005, with the creation of the defined
contribution plans, termination costs were covered and
again in 2008 in SB 125. She explained that as part of a
change to a cost share system, there was a fear that
employers would remove groups, classifications, or
departments in order to lower their contribution amount and
leave the accrued liability for the other PERS employers to
pay. She stated that SB 125 created a second type of
termination cost, which required that the employer pay a
continuing contribution for the employees that were removed
from coverage based on the unfunded liability percentage.
The employee would continue to pay every payroll until the
unfunded liability was exhausted. She stated that a
termination study would not trigger, unless there was a
removal of a department, classification, or group when an
employee was looking to reduce the number of employees.
9:46:50 AM
Representative Munoz wondered if the smaller communities
that were discussed paid the termination costs. Ms. Lea
replied that Galena did not have a termination study.
Representative Wilson surmised that employees were still
paying for employees that were no longer employed. Ms. Lea
replied that, in Galena's case, they were paying the salary
score from 2008.
Representative Wilson felt that additional boroughs may
face a similar issue as Galena. Ms. Lea stated that any
time an employer removed an entire group, classification,
or department there would be a termination study.
Representative Wilson surmised that an employer would still
pay into PERS even without a termination study. She
stressed that the municipalities would still have a cost to
the employee, even though the employee would not be
employed. Ms. Lea agreed that the municipality would still
be subject to the 2008 salary floor.
Vice-Chair Saddler reviewed the fiscal notes.
Co-Chair Neuman MOVED to REPORT CSHB 47 (FIN) out of
committee with individual recommendations and the
accompanying fiscal note.
Co-Chair Neuman rescinded his action.
Co-Chair Thompson commented that the correct fiscal note
had not been read.
Vice-Chair Saddler reviewed the correct fiscal note.
Co-Chair Neuman MOVED to REPORT CSHB 47 (FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 47 (FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal impact note by
the Department of Administration.
9:52:20 AM
AT EASE
9:56:04 AM
RECONVENED
HOUSE BILL NO. 188
"An Act relating to financial accounts for persons
with disabilities; relating to financial institutions;
relating to property exemptions; relating to
securities; and providing for an effective date."
9:56:04 AM
Co-Chair Neuman MOVED to ADOPT the proposed committee
substitute for HB 188(FIN), Work Draft (29-LS0787\I).There
being NO OBJECTION, it was so ordered.
Co-Chair Thompson called Mr. Anderson to the table to
review the bill changes.
BRODIE ANDERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
indicated there were three changes in the bill. He looked
at page 1, line 2. The bill was amended by adding,
"limited" before the word, "property." He pointed to page
9, lines 2 through 8, which amended the bill by adding an
exemption (b) to Section 06.65.260, an exemption from
creditor claims:
(b) If a designated beneficiary is default for 30 or
more days on a payment due under a child support
judgment or order, the money in the program account is
not exempt from a claim for the payment of child
support that is in default.
9:58:15 AM
AT EASE
10:06:02 AM
RECONVENED
Mr. Anderson pointed to reiterated that the changes were on
page 1, line 2; and the second change was on page 9, lines
2 through 8. The third change was on page 11, line 20,
which amended the bill by adding "except as provided in AS
06.65.260(b)."
Vice-Chair Saddler, bill sponsor, read the sponsor
statement:
HB 188 seeks to help Alaskans cope with the challenges
of living with a disability by allowing individuals
and families to set up tax-free savings accounts,
called "ABLE accounts," to pay for education, housing,
transportation or other disability-related expenses.
The U.S. Congress passed the "Achieving a Better Life
Experience (ABLE) Act" in 2014, authorizing states to
create special savings accounts for disability-related
expenses modeled after the successful "529 college
savings programs," named after the relevant section of
IRS code.
ABLE accounts, also known as "529A" accounts, allow
individuals with disabilities to improve their
financial security by using private investments to
supplement their benefits from insurance, employment,
Supplemental Security Income (SSI), Medicaid, and
other sources. Assets held in an ABLE account would
not be counted under means tests required for Medicaid
or SSI, although SSI cash benefits would be suspended
if the ABLE balance exceeded $100,000.
ABLE accounts could be spent for education,
transportation, job training and support, assistive
technology, health and wellness, legal and other
qualified services. Contributions would be limited to
$14,000 per year, and capped at $400,000. A person
could have only one account.
To be eligible for an ABLE account, a person must have
become blind or disabled before the age of 26. The
Governor's Council on Disabilities and Special
Education estimates that about 13,770 Alaskans - 10
percent of those with a disability - might qualify for
ABLE accounts.
By empowering Alaskans with disabilities and their
families to build their financial independence, HB 188
will help them meet more of their life challenges by
relying on private resources, without eroding the
value of public benefits to which they are entitled.
ABLE accounts will be important tools for helping them
live full, productive lives in their communities.
Representative Wilson queried the number of people that
could qualify, who currently could not qualify.
10:11:01 AM
KIM SKIPPER, STAFF, REPRESENTATIVE DAN SADDLER, deferred to
Patrick Reinhart.
Representative Wilson wondered why there was not a
consideration of those with low income in the legislation.
Vice-Chair Saddler replied that the bill was targeted at
Alaskans with disabilities. He stated that the bill was
designed to equalize the "playing field."
Ms. Skipper furthered that the bill was modeled after
federal legislation.
Representative Wilson felt that the bill was too limiting
to people with disabilities. She stressed that there were
people that had a difficult time sustaining a job, and
added that she did not know the exact definition of
"disabled." She expressed discomfort with the
differentiation of groups. Ms. Skipper replied that there
was a bill in Congress to expand "able" to the age of 46;
and allow anyone with a college savings plan the
opportunity to "roll" the plan into an able account.
Representative Wilson agreed to hear more information from
the department.
Representative Edgmon thanked the sponsor for the bill, and
expressed support of the legislation. He queried a
provision in the bill that would allow the state to adjust
the age limit, should Congress increase the age limit.
Vice-Chair Saddler replied in the negative. He explained
that the federal able legislation set some parameters,
because it dealt with the Internal Revenue Service (IRS)
provisions. The age parameters were set at 26, and the stat
could adapt to that level or not. He restated that the
limit could not be changed at the state level.
Representative Kawasaki surmised that the underage person
with the account would have a parent file the taxes. Vice-
Chair Saddler agreed.
Representative Pruitt remarked that there was a recently
added provision which allowed for a deceased person's
remaining funds be used to offset the costs of Medicaid. He
wondered where the program fell in the priority of paying
out of a person's estate. Ms. Skipper agreed to provide
that information. She remarked that Medicaid automatically
had a "claw back" provision, but she did not know the
priority.
Vice-Chair Saddler furthered that the "claw back" provision
was not unique to the legislation. He deferred the
Department of Law (DOL) for more information. He announced
that there was a provision in current Medicaid law that
said if a person received value or benefit from the
Medicaid program during their life, the state could recover
as much as possible to cover the cost after death.
10:17:56 AM
Representative Pruitt wondered if the state made effort to
recover the cost after death. Vice-Chair Saddler replied in
the affirmative.
Representative Edgmon asked if the sponsor would be open to
a conceptual amendment that would enable the program to
adapt to the possible congressional changes.
Vice-Chair Saddler thought the bill already incorporated
that language.
Ms. Skipper announced that the proposed language was
already built into the legislation.
Representative Edgmon surmised that his concerns were
already addressed in the bill.
10:20:14 AM
PATRICK REINHART, GOVERNOR'S COUNCIL ON DISABILITIES AND
SPECIAL ED, ANCHORAGE (via teleconference), testified in
strong support of the bill. He remarked that the effort
began to include all people with disabilities of all ages,
but Congress chose to limit it to those people who had
acquired their disability before the age of 26. He shared
that there was an effort in Congress to increase the age to
46, to rollover the 529 accounts, and to increase the
deposit amounts based on poverty level guidelines. He
stated that there was bipartisan support for those changes,
but felt that those changes probably would not occur in the
current Congress. He appreciated that the legislation
included language to anticipate changes.
10:23:10 AM
LORI KING, SELF, JUNEAU (via teleconference), supported HB
188. She shared that she was the mother of a 25-year-old
daughter with autism, developmental delays, and was losing
her sight. Her daughter was a recipient of social security
and public assistance. She explained that her daughter used
budgeting skills, but her income was only $1095. She
announced that the bills with rent, food, and utilities
totaled $1015.
10:27:15 AM
JEFF JESSEE, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH
TRUST AUTHORITY, spoke in support of the bill. He announced
that the trustees had approved funding the fiscal note. He
felt that the bill provided a tremendous opportunity for
its beneficiaries.
Co-Chair Thompson OPENED public Testimony.
10:29:03 AM
SARA KUECIM, SELF, JUNEAU, spoke in favor of the bill. She
felt that the bill would help individuals with supported
employment while also receiving Medicaid support. She
stressed that the bill helped to provide dignity to
individuals with disabilities.
10:30:52 AM
STUART SPIELMAN, AUTISM SPEAKS, WASHINGTON DC (via
teleconference), spoke in favor of HB 188. He shared that
he had been working on the issue at the federal level for
over 10 years. He remarked that his interest in the issue
was not only professional, because he has a severely
autistic 21-year-old son. He pointed out that the
legislation was embraced at the federal level as well as
other states throughout the country. He shared that 36
states and the District of Columbia had authorized their
own state able programs.
Co-Chair Thompson CLOSED public testimony.
Vice-Chair Saddler reviewed the fiscal notes.
10:33:19 AM
Representative Wilson felt that the indeterminate fiscal
note should really be a zero fiscal note. She noted that
the Department of Health and Social Services (DHSS) would
be covering the count, rather than the Department of
Revenue (DOR).
Ms. Skipper explained that DHSS would be a small component
of the program. She deferred to Ms. Leary for more
information.
PAM LEARY, DIRECTOR, DIVISION OF TREASURY, DEPARTMENT OF
REVENUE, stated that it was an administrative issue for the
pending fiscal note from DOR, because the CS was not
available. She felt that there would be similar fiscal note
as the one from the Labor and Commerce Committee. The
fiscal note assigned $60,000 in FY 17; and $40,000 in FY 18
from Mental Health Trust receipts.
Representative Wilson looked at the fiscal note component
number 2077, which stated that staff would be required to
monitor and track accounts and file claims; and
administration of accounts would involve account deposits
and balances to confirm that they did not exceed allowable
amounts; and monitoring account dispersements to confirm
that they were qualifying expenses. She felt that the
fiscal note was not related to eligibility. Ms. Leary
replied that DOR would oversee the program, but was not
sure of the form of oversight it would need. She remarked
that there were a number of states that had their own
programs, and also a number of states that were creating a
consortium program. She explained that it was envisioned
that most of the work, including the determination of
benefits, would happen at the vender level. She believed
that it was a requirement at the federal level for the
vender to be responsible for identifying the records of the
individuals.
Representative Wilson restated that the fiscal note should
be zero. She felt that the work would be done by DOR, and
paid out with the receipts from payments. She did not feel
that DHSS should be giving an indeterminate amount of money
to provide service that would not have a cost. She wondered
whether an individual must receive social security
disability benefits to be considered "disabled", or was it
any type of diagnosis before age 26. Ms. Skipper responded
that a person did not have to receive social security
disability benefits, rather have a doctor certificate
declaring a disability.
Representative Wilson felt that there would be many more
people added to Medicaid.
Co-Chair Neuman requested a comment from the bill sponsor.
Mr. Reinhart shared that he could not fully answer
Representative Wilson's question. He stated that the
eligibility program was more related to the applicant's
relationship with the IRS. He remarked that there was not
much eligibility determination by the state.
10:39:54 AM
Representative Wilson shared that her son with Attention
Deficit Hyperactivity Disorder (ADHD) would qualify for the
program. She stressed that there could be a great fiscal
impact to the state with a broad definition of
"disability."
Vice-Chair Saddler replied that the savings in the able
account would be increase tax free, but would not reduce
his taxable income below the point to which he would
qualify for Medicaid.
Representative Wilson surmised that the money in the able
account would not count against Medicaid eligibility.
Representative Munoz wondered if the means test was $2000
for Medicaid. Ms. Leary stated that it was $2000, and was
the social security amount. She explained that it was the
total number of assets that an individual could have,
before their benefits were reduced.
10:42:33 AM
Representative Pruitt felt that the fund was modeled after
a 529 account. He shared that a 529 accounts offered that a
parent could start the account, but at the age of 18 the
child could receive the account or the parent could
maintain ownership of the account. Therefore, the parent
was given the ability to ensure that the money was
appropriately spent. He remarked that, at a certain point,
unspent money could be rolled into a new 529 account or the
money became taxable. He noted that the difference with the
proposed legislation is that the owner of the account was
the actual designee. He queried an advantage of the
importance to place the money in the hands of a parent.
Vice-Chair Saddler asked Representative Pruitt to restate
the question.
Representative Pruitt felt that there was a major
difference in the proposal and a 529 account. Ms. Skipper
thought that Representative Pruitt was correct. She
explained that the account holder could have a
representative to make the decisions.
Representative Pruitt felt that the parent should have the
ability to maintain some control. He surmised that the only
claim that could go against the program was child support.
He queried the development of the provision. Ms. Skipper
replied that in any situation of child support, the
judgment would overrule. She explained that similar
legislation included exemptions from creditor claims
without the need for child support. She furthered that an
individual had asked that the specification be included in
the bill.
10:47:18 AM
Representative Pruitt remarked that the provision was not a
federal policy. Ms. Skipper replied in the affirmative.
Representative Pruitt stressed that the $100,000 could not
be used to make restitution. Ms. Skipper responded that the
account could technically have a maximum of $400,000,
because of the college savings plan contribution limit. She
furthered that the money was more fluid, because it would
be used for expenses that were not covered by Medicaid.
Representative Pruitt stressed that the focus should not be
on what would likely happen, rather there needed to be an
examination of all the potential occurrences. He remarked
that the bill did not specifically mention that the
individual was the only person that could deposit into the
account. Ms. Skipper replied that anyone could contribute
up to $14,000 per year.
Vice-Chair Saddler felt that it would take $14,000 to
achieve the $40,000 cap on the account.
Co-Chair Thompson would be gaveling out in about 5 minutes.
Representative Wilson wanted to amend the fiscal note. She
thought it should be zero.
Vice-Chair Saddler indicated that the fees associated by
the program were the fees could be covered by the fees set
by the investment company that managed the accounts. He
remarked that the indeterminate note was because the number
of applicants was unknown.
10:52:40 AM
AT EASE
10:53:15 AM
RECONVENED
Co-Chair Thompson indicated that the committee would be
recessing to accommodate floor session.
10:53:27 AM
RECESSED
1:25:19 PM
RECONVENED
Co-Chair Thompson indicated HB 188 would be set aside for a
moment.
HB 188 was HEARD and HELD in committee for further
consideration.
HOUSE CONCURRENT RESOLUTION NO. 4
Relating to the duties of delegates selected by the
legislature to attend a convention of the states
called under art. V, Constitution of the United
States, to consider a countermand amendment to the
Constitution of the United States; establishing as a
joint committee of the legislature the Delegate
Credential Committee and relating to the duties of the
committee; providing for an oath for delegates and
alternates to a countermand amendment convention;
providing for a chair and assistant chair of the
state's countermand amendment delegation; providing
for the duties of the chair and assistant chair;
providing instructions for the selection of a
convention president; and providing specific language
for the countermand amendment on which the state's
convention delegates are authorized by the legislature
to vote to approve.
1:26:02 PM
REPRESENTATIVE SHELLEY HUGHES, SPONSOR, explained that HCR
4. She stated that the resolution was the second of two
resolutions that were working in tandem. She remarked that
HCR 14 was in the Rules Committee awaiting this resolution.
She explained that the word "countermand" means "veto." She
explained that the resolutions were intended to restore the
appropriate balance between the states and the federal
government. She shared that a poll conducted in Alaska in
March 2015 showed that 82 percent of Alaskans believed that
it was important to address the federal government
overstepping its bounds. She understood that the federal
government was not the enemy, because it did many important
actions for Alaska. She stressed that the resolution was
not an "anti-federal government" bill. She felt that the
resolution was a non-partisan issue. She felt that it was
about the working relationship between the states and the
federal government. She remarked that, over time, the
federal government had not always focused its attention on
national concerns, so there was currently a problem. She
felt that the federal government often conducted itself
with disregard and a lack of accountability to the state,
and specifically to Alaska's detriment. She felt that the
issue of Alaska National Wildlife Refuge (ANWR) was an
example of the federal government overstepping its bounds.
She shared that the legislature had historically protested
and resolved against the federal government. She shared
that there was often litigation with rare success. She
remarked that, typically, the actions of the state were met
with silence or weak affirmation from the federal
government. She stressed that the encroachment on the
sovereignty was frustrated for Alaskans. She remarked that
there were many times that the federal government did not
always know what is best for the state. She stressed that
the legislature had the right and duty to work to restore
the balance between the state and federal governments.
Representative Hughes stated that the first resolution
called for the convention for the countermand amendment.
The current legislation gave instructions to the delegates.
She remarked that the outline of instructions was intended
to keep order, and ensure that the constitution is not
dismantled. The resolution outlined the delegate selection
process; outlines the delegate duties; and includes the
specific language of the countermand amendment.
Representative Hughes explained that it took 34 states, to
call the convention. She furthered that once Congress
summoned the convention, it would take a simple majority to
approve the amendment language. She explained that 38
states needed to ratify the amendment. Following that
ratification, the amendment was added to the U.S.
Constitution. She stated that a particular state would
decide that either a federal statute, regulation,
administrative order, or judicial decision was not in the
best interest of the state. Therefore, that state would
pass a resolution in its state legislature to announce that
it was not in the best interest of the state. At that
point, another 29 states would need to pass a resolution
stating that the item was not in the best interest of the
state. At that point, the item was rescinded. She remarked
that she understood that the resolution would only be used
with great consensus.
1:34:30 PM
AT EASE
1:34:41 PM
RECONVENED
1:35:04 PM
MIKE COONS, LEGISLATIVE DIRECTOR, CITIZENS INITIATIVES (via
teleconference), remarked that the fiscal note for the
resolution was zero. He explained that until 34 states made
the application for the convention, there was no cost for
the upcoming fiscal year. Once the 34 state applications
occurred, the legislatures would determine the cost of the
convention. He stated that the resolution maintained state
sovereignty in the Article 5 process; and ensured a safe,
efficient, and timely convention. Therefore, reducing any
costs the state may pay to the delegates. He shared that
there would be cost savings on unfunded federal mandates by
repeal of many of the regulations.
Representative Munoz queried the subject number limit, once
the threshold was met. Mr. Coons replied that the amendment
application was for a countermand amendment convention.
Representative Munoz wondered how to get items on the
convention agenda. Mr. Coons responded that there was no
subject, rather it was a named amendment with the state
legislative approved language to the amendment.
Representative Hughes furthered that the subject or topic
for a convention, was through a call application.
Co-Chair Thompson wondered whether the legislature could
direct the delegate's actions. Representative Hughes
responded that the delegates could only address the
countermand amendment at the convention.
Representative Guttenberg commented that the legislature
would be assigning outside of the state's jurisdiction, and
dictating their actions. He felt that the legislature did
not have the authority to control peoples' actions. He
remarked that a representative outside of the state was
outside of the state's jurisdiction. He felt that calling
someone back, because they could not compromise or
disagreed, was not a realistic nor legal situation. He felt
that it was not enforceable. He remarked that the
convention could occur with the delegates disagreeing on
the subject. He wondered if a convention could be called,
based on varying subjects and purposes. Representative
Hughes replied that the 34 applications would have to be
for the same subject.
1:42:42 PM
Representative Guttenberg queried the level of discussion.
He wondered if the questions should be directed to the
sponsor or Mr. Coons.
Co-Chair Thompson stated that the question could be for
either individual.
Representative Guttenberg announced that he was deeply
disturbed by the resolution. He stressed that the
constitution was silenced regarding the delegates. He felt
that it was a legislative "power grab" for deciding the
delegates. He shared that other states had general
elections for people who want to be delegates to the state
constitution. He felt that the people, not specifically
legislators, should be sent to the convention. He felt it
egregious to assume that legislators were the only people
qualified to serve as delegates. Representative Hughes
replied that the resolution did not determine that
legislators would be delegates. She pictured the delegates
as residents of Alaska. She remarked that the resolution
set up a credential committee of legislators, who would
choose the delegates.
Representative Guttenberg found many references in the
resolution about the power of the legislature. He felt that
there should be an electoral process that allowed Alaskans
to vote for the best delegate. He felt that the legislature
did not have any special skills separate from regular
residents of Alaska.
Representative Gattis stated that she had a similar
question to Representative Munoz.
Representative Gara wondered if the constitution would
allow voters to select the delegates. Representative Hughes
did not specify the requirements for delegate selection.
She stated that the delegate appointment process was
intended to include Alaskans from around the state. She did
not know if the language prohibited the selection through
an election process.
Representative Gara stressed that he would like the general
public to select the delegates.
Representative Gara queried the last time the constitution
was successfully changed by a state convention.
STUART KRUEGER, STAFF, REPRESENTATIVE SHELLEY HUGHES,
replied that there was never a successful amendment through
the convention process. The closest any effort came,
resulted in the 17th Amendment, which was about the direct
election of senators. He shared that there was a point of
nearly 30 states, and at that point, Congress acted on its
own. He felt that the resolution could be a tool to enable
the states to apply similar pressure to the federal
government.
Co-Chair Thompson CLOSED public testimony.
Vice-Chair Saddler reviewed the fiscal note.
1:51:14 PM
AT EASE
1:52:28 PM
RECONVENED
Co-Chair Neuman MOVED to REPORT CSHCR 4 (STA) out of
committee with individual recommendations and the
accompanying fiscal note.
Representative Guttenberg OBJECTED. He indicated he was
concerned with the legislature taking so much power. He did
not believe the state was the controlling body. A remand
convention should be the people.
A roll call vote was taken on the motion.
IN FAVOR: Munoz, Pruitt, Saddler, Wilson, Edgmon, Gattis,
Thompson, Neuman
OPPOSED: Guttenberg, Kawasaki, Gara
The MOTION PASSED (8/3).
CSHCR 4 (STA) was REPORTED out of committee with a "do
pass" recommendation and with one new indeterminate fiscal
note by the Legislature.
1:56:26 PM
AT EASE
2:19:17 PM
RECONVENED
Co-Chair Thompson stated that the meeting would be in
recess until 7:30 AM.
2:19:35 PM
AT EASE
2:20:28 PM
RECONVENED
Co-Chair Thompson canceled the 7:30 a.m. meeting for the
following day. He discussed the schedule for the following
meeting.
ADJOURNMENT
2:20:56 PM
The meeting was adjourned at 2:20 p.m.