04/22/1998 03:20 PM House L&C

HB 323 - PERS CREDIT FOR NONCERTIFICATED EMPLOYEES                             
                                                                               
Number 0007                                                                    
                                                                               
CHAIRMAN ROKEBERG announced the committee's first order of business            
was HB 323, "An Act relating to the calculation of credited service            
in the public employees' retirement system for noncertificated                 
employees of school districts, regional educational attendance                 
areas, and state boarding schools; and providing for an effective              
date."                                                                         
                                                                               
Number 0011                                                                    
                                                                               
REPRESENTATIVE TOM BRICE made a motion to adopt the proposed                   
committee substitute LS1350\E, Cramer, 4/21/98, as the working                 
draft.  There being no objections, that version was before the                 
committee.                                                                     
                                                                               
Number 0014                                                                    
                                                                               
REPRESENTATIVE BRICE made a motion to move HB 323 from the                     
committee with individual recommendations [and attached fiscal                 
note].                                                                         
                                                                               
CHAIRMAN ROKEBERG objected for a description of what the committee             
substitute does.                                                               
                                                                               
REPRESENTATIVE BRICE noted Section 1 was added.  He explained that             
it would provide direction to the Department of Administration to              
base the expected increase in cost for this benefit which is to be             
paid for by the employees who will be receiving the benefit.  For              
about a 40 percent increase in their contribution they will receive            
a 30-year retirement and a 5-year vestment as opposed to the                   
current 40-year retirement and 7 and 3/4-year vestment.                        
                                                                               
     Section 1. AS 39.35.160 is amended by adding a new subsection             
     to read:                                                                  
                                                                               
     (c) Beginning July 1, 1998, a noncertificated employee of a               
     state boarding school or of a school district or regional                 
     educational attendance area shall pay a contribution                      
     surcharge.  The amount of the surcharge is the difference                 
     between the amount the employer would have had to contribute              
     under AS 39.35.250 - 39.35.290 for the employee when treating             
     the employee's credited service as service earned under AS                
     39.35.300(c) or 39.35.310(c) less the amount the employer                 
     would have had to contribute under AS 39.35.250 - 39.35.290               
     without treating the employee's credited service as service               
     earned under AS 39.35.300(c) or AS 39.35.310(c).                          
                                                                               
CHAIRMAN ROKEBERG, stated "Let me understand this now, this allows             
for example a school employee that normally would have to take the             
summer off to -- his normal contribution of 6.75 percent which he              
normally pays he would be allowed to pay that and then he also - he            
would pay the employee that, that is to say would pay the employer             
match of 6.75.  So the employee would pay the entire amount of                 
those months they were not directly employed and reimbursed by the             
employer, is that correct."                                                    
                                                                               
REPRESENTATIVE BRICE replied yes.                                              
                                                                               
CHAIRMAN ROKEBERG said, so there wouldn't be any negative impact as            
far as the school districts.                                                   
                                                                               
REPRESENTATIVE BRICE replied no.                                               
                                                                               
Number 0030                                                                    
                                                                               
REPRESENTATIVE JOE RYAN said, "Okay, this is in the same that the              
classified employees - the teachers would pay for make (indisc.),"             
                                                                               
REPRESENTATIVE BRICE responded that their contribution rate would              
be - they're both roughly around - totally 20 percent.                         
                                                                               
REPRESENTATIVE RYAN commented, "They are making, like the teachers             
make their contribution agreements (indis.--fading)."                          
                                                                               
Number 0035                                                                    
                                                                               
CHAIRMAN ROKEBERG withdrew his objection to the motion.  He asked              
if there were further objections.  There being none, CSHB 323(L&C)             
moved from the House Labor and Commerce Standing Committee.  The               
chairman noted for the record that the attached zero fiscal note               
was a technical oversight of part of the motion made.