Legislature(2019 - 2020)ADAMS 519

03/17/2020 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 3:15 pm --
+= HB 79 PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS TELECONFERENCED
Moved CSHB 79(FIN) Out of Committee
+= HB 268 MUNI BOND BANK: UA, LOAN AND BOND LIMITS TELECONFERENCED
Scheduled but Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 181 PUBLIC SCHOOLS: MENTAL HEALTH EDUCATION TELECONFERENCED
Moved CSHB 181(EDC) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 17, 2020                                                                                            
                         3:17 p.m.                                                                                              
                                                                                                                                
3:17:35 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Johnston called the House Finance Committee                                                                            
meeting to order at 3:17 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Co-Chair                                                                                      
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Kelly Merrick                                                                                                    
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
Representative Adam Wool                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative Chuck Kopp, Sponsor; Ken Truitt, Staff,                                                                          
Representative Chuck Kopp.                                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
David  Kershner,   Buck  Global,  Florida;   Lacey  Sanders,                                                                    
Administrative  Services Director,  Department of  Education                                                                    
and  Early Development,  Office  of  Management and  Budget,                                                                    
Office of the Governor.                                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 79     PEACE OFFICER/FIREFIGHTER RETIRE BENEFITS                                                                             
                                                                                                                                
          CSHB 79(FIN) was REPORTED out of committee with                                                                       
          four "do pass" recommendations, three "do not                                                                         
          pass"  recommendations, three  "no recommendation"                                                                    
          recommendations,  one  "amend" recommendation  and                                                                    
          with one previously  published fiscal impact note:                                                                    
          FN2 (ADM/Retirement Payments).                                                                                        
                                                                                                                                
HB 181    PUBLIC SCHOOLS: MENTAL HEALTH EDUCATION                                                                               
                                                                                                                                
          CSHB 181(EDC)  was REPORTED out of  committee with                                                                    
          one "do pass" recommendation,  three "do not pass"                                                                    
          recommendations,   and  one   "no  recommendation"                                                                    
          recommendation  and  with  one new  fiscal  impact                                                                    
          note  by the  Department  of  Education and  Early                                                                    
          Development.                                                                                                          
                                                                                                                                
HB 268    MUNI BOND BANK: UA, LOAN AND BOND LIMITS                                                                              
                                                                                                                                
          HB 268 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
Co-Chair  Johnston reviewed  the agenda  for the  afternoon.                                                                    
The meeting would be ending at 4:30 p.m.                                                                                        
                                                                                                                                
HOUSE BILL NO. 79                                                                                                             
                                                                                                                                
     "An  Act relating  to  participation  of certain  peace                                                                    
     officers and  firefighters in  the defined  benefit and                                                                    
     defined  contribution plans  of  the Public  Employees'                                                                    
     Retirement  System of  Alaska; relating  to eligibility                                                                    
     of  peace   officers  and  firefighters   for  medical,                                                                    
     disability, and  death benefits; relating  to liability                                                                    
     of the  Public Employees' Retirement System  of Alaska;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
3:18:33 PM                                                                                                                    
                                                                                                                                
Co-Chair Johnston invited the bill  sponsor and his staff to                                                                    
the table.                                                                                                                      
                                                                                                                                
3:19:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHUCK  KOPP, SPONSOR, reminded  the committee                                                                    
that  HB  79  provided  for a  hybrid  between  the  Defined                                                                    
Benefit (DB) system  and the Tier 4 system.  He believed the                                                                    
bill created a  good middle ground between a  costly DB plan                                                                    
and a  system designed  to maintain retention.  He mentioned                                                                    
the cost  saving features  to preserve  full funding  of the                                                                    
plan. He realized that any  retirement plan costs something,                                                                    
however, he thought his bill  could help resolve some of the                                                                    
problems regarding public safety.                                                                                               
                                                                                                                                
3:21:04 PM                                                                                                                    
                                                                                                                                
Representative  Knopp  expressed   reservation  with  HB  79                                                                    
because it  was offered to only  a select group and  not all                                                                    
employees. He  was also concerned  with the notion  of costs                                                                    
increasing  over  time  if  the  plan  grew.  He  asked  for                                                                    
clarification. Representative Kopp  indicated that there was                                                                    
a risk associated  if the number of employees  grew, but the                                                                    
plan  was only  available to  a small  group. Representative                                                                    
Knopp  heard  from  employees  in  other  unions  that  with                                                                    
passage  of  HB   79  they  would  want  to    jump  on  the                                                                    
bandwagon.  He  wondered how that  would be handled  and who                                                                    
would deny the plan  to other employees. Representative Kopp                                                                    
indicated the  issue was difficult.  He elaborated  that the                                                                    
bill  targeted   the  most  sensitive  group   of  employees                                                                    
relative to job turnover. He felt  that there was a need for                                                                    
the state  to prove the model  and stated that it  could not                                                                    
be duplicated  identically to  other employee  groups. Other                                                                    
proposed plans  would need  to be modeled  and he  could not                                                                    
speak  to how  the analysis  would turn  out. He  added that                                                                    
with a  mere 2 percent turnover  in the plans  employees   -                                                                    
comparing the state  costs in lost training  versus the cost                                                                    
of the  plan, the  state would save  more in  saved training                                                                    
costs.  He noted  that with  the more  realistic 10  percent                                                                    
turnover  rate the  state would  lose $3.5  million for  the                                                                    
plan  versus  $14.5  million  in  lost  training  costs.  He                                                                    
communicated  that  the  bill  would  ultimately  result  in                                                                    
 considerable   savings to  the state.  Representative Knopp                                                                    
replied that the original bill  applied to first responders.                                                                    
He  thought  that  the  category was  too  broad.  He  asked                                                                    
whether  eligibility   was  narrowed.   Representative  Kopp                                                                    
replied   that   eligible    employees   included:   police,                                                                    
firefighters, state troopers, and correctional officers.                                                                        
                                                                                                                                
3:25:05 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Ortiz asked  what factors  would  make the  plan                                                                    
riskier  with an  increased number  of  employees. He  noted                                                                    
that more members meant more contributors.                                                                                      
                                                                                                                                
3:26:00 PM                                                                                                                    
                                                                                                                                
DAVID KERSHNER,  BUCK GLOBAL, FLORIDA  (via teleconference),                                                                    
responded that  as a  DB plan grew,  and new  peace officers                                                                    
joined  the  DB  plan  the  assets  and  liabilities  became                                                                    
larger. He  elaborated that any  adverse experience  as seen                                                                    
with the COVID 19 market  losses, created a larger loss that                                                                    
had  to  be  covered  by   the  state  via  a  higher  state                                                                    
contribution. He  added that the recent  projections showing                                                                    
the HB  79 plan well-funded  was forecast before  the market                                                                    
reactions  to  COVID  19. He  reported  that  using  current                                                                    
market data,  the plan would  not be  as well funded  as the                                                                    
projections   showed.    The   state   would    see   higher                                                                    
contributions than the fiscal note contained.                                                                                   
                                                                                                                                
Representative Kopp  interjected that no  actuarial analysis                                                                    
was done  based on one  devastating week in the  markets. He                                                                    
reminded   the  committee   that   actuarial  analysis   was                                                                    
performed on an annualized basis.                                                                                               
                                                                                                                                
3:29:16 PM                                                                                                                    
                                                                                                                                
Co-Chair  Johnston  asked  that  besides  adding  to  member                                                                    
population,  would it  make a  difference  if the  actuarial                                                                    
base  had a  lengthy period  of employee  contributions. She                                                                    
noted that  the HB  79 group  retired earlier  than teachers                                                                    
who  typically  worked for  30  to  35 years.  Mr.  Kershner                                                                    
confirmed that  it did  make a  difference. He  had factored                                                                    
earlier  retirement  into  the analysis.  Co-Chair  Johnston                                                                    
clarified   that  she   was  speaking   to  adding   to  the                                                                    
population. She inquired whether  the actuarial report would                                                                    
be affected  if there was  an addition of plan  members that                                                                    
stayed in the workforce  much longer. Mr. Kershner responded                                                                    
that by adding teachers the  liability would be lower if all                                                                    
other elements of the plan remained equal.                                                                                      
                                                                                                                                
3:32:03 PM                                                                                                                    
                                                                                                                                
Representative LeBon asked  Mr. Kershner if he  was aware of                                                                    
other   plans   that    shared    the   participation   rate                                                                    
adjustments between  the state, employee, and  employer. Mr.                                                                    
Kershner  responded  that  typically members  paid  a  fixed                                                                    
amount and  were not  typically tied  to the  performance of                                                                    
plan  assets.  He  added  that   sometimes  Cost  of  Living                                                                    
Adjustments (COLA)  increases were based on  the performance                                                                    
of  the   plan.  Since  the  membership   participation  was                                                                    
typically fixed,  any losses would  fall to the  employer or                                                                    
the state unless specified otherwise  by a plan amendment or                                                                    
statute.                                                                                                                        
                                                                                                                                
Representative LeBon  asked whether it was  not standard for                                                                    
the investment risk  to be shared between the  state and the                                                                    
participants. Mr.  Kershner replied  in the  affirmative. He                                                                    
added that the risk typically  fell to the plan sponsors, in                                                                    
the case of HB 79, the state.                                                                                                   
                                                                                                                                
3:34:41 PM                                                                                                                    
                                                                                                                                
Representative  Carpenter  referenced   the  present  market                                                                    
conditions.  He  asked what  would  work  under the  present                                                                    
market  conditions. Mr.  Kershner  clarified  that the  plan                                                                    
would not  necessarily underperform.  He explained  that the                                                                    
projections  would  differ  from the  analysis  because  the                                                                    
plans   asset  values  would  not   be  as  well  funded  as                                                                    
currently  projected, increasing  plan costs.  The cost  for                                                                    
the group  would be higher  than he calculated,  which could                                                                    
mean more funding might be  diverted away from the DB trust.                                                                    
However, he  could not confirm that  supposition nor comment                                                                    
further without  updated analysis.  Representative Carpenter                                                                    
asked  if the  additional cost  would fall  on the  state or                                                                    
members or  both. Mr. Kershner  responded that  the members                                                                     
contribution was 8 percent and  could increase to 10 percent                                                                    
at the discretion of the  Alaska Retirement Management Board                                                                    
(ARM).  He elucidated  that there  was no  automatic formula                                                                    
for increasing member participation;  it was a discretionary                                                                    
decision. He  spoke to  a provision in  the bill  that would                                                                    
automatically   withhold   the   Post   Retirement   Pension                                                                    
Adjustments  (PRPA) if  the trust  fell below  a 90  percent                                                                    
funding  level.  The  increase in  the  member  contribution                                                                    
would  be  a  result  of  the  board  initiating  a  change.                                                                    
Representative Carpenter  asked whether the ARM  Board would                                                                    
act swiftly  to increase member contributions  based on poor                                                                    
market performance.  Mr. Kershner replied that  there was no                                                                    
simple answer  to the question.  There was no  set provision                                                                    
in the bill  that provided a formula for how  much the board                                                                    
can increase  the member  contribution based  on percentages                                                                    
by how much the fund dipped  under 10 percent. The board was                                                                    
limited to the  10 percent limit and  guidance was necessary                                                                    
to determine how or if that would be raised incrementally.                                                                      
                                                                                                                                
3:38:47 PM                                                                                                                    
                                                                                                                                
Representative Carpenter noted that  the plan had levers and                                                                    
mechanisms to  ensure there were  measures to keep  the plan                                                                    
solvent. He  expressed hesitation in supporting  the bill if                                                                    
it was difficult to manipulate the levers when necessary.                                                                       
                                                                                                                                
3:39:30 PM                                                                                                                    
                                                                                                                                
Representative Kopp  clarified that the plan  would start at                                                                    
100  percent funded  under any  circumstances. He  expounded                                                                    
that  members had  to  buy  into the  plan  based on  assets                                                                    
already accrued  and their value  at the time.  He concluded                                                                    
that  no matter  what,  the plan would start  at 100 percent                                                                    
funded. Representative  Carpenter asked  if, by  starting at                                                                    
100 percent,  some employees  might choose  not to  buy into                                                                    
the plan. Representative Kopp responded in the affirmative.                                                                     
                                                                                                                                
Mr.  Kershner added  to Representative  Kopps  comments.  He                                                                    
relayed that  the amount of  service members would  start at                                                                    
when  transitioning from  the Defined  Contribution (DC)  to                                                                    
the DB  plan was not dependent  on the assets, it  had to do                                                                    
with  the present  value or  the  liability associated  with                                                                    
their projected  benefits, which was independent  of whether                                                                    
the  plan was  100  percent funded.  He  expounded that  the                                                                    
amount of  money that  was used  from a  DC account  was not                                                                    
related   to  the   asset  amounts   in  the   plan.  Market                                                                    
fluctuations causing  asset losses  would affect  members DC                                                                    
account balances, but it would  not affect the assets of the                                                                    
plan  because  the amount  they  had  to transfer  from  the                                                                    
account  was  dependent  on the  liability  associated  with                                                                    
their service which was independent  on asset values. In his                                                                    
prior statements, he was attempting  to point out that if he                                                                    
performed a current analysis it  could be different from the                                                                    
analysis used  for the fiscal  note. He emphasized  that his                                                                    
point  was that  in  a DB  plan the  risk  of adverse  asset                                                                    
performance fell  not to  the participants  but to  the plan                                                                    
sponsor  due   to  the  fixed  contribution   rates  of  the                                                                    
employers. Any  losses due to poor  assets performance rests                                                                    
on additional state contributions.                                                                                              
                                                                                                                                
3:43:49 PM                                                                                                                    
                                                                                                                                
Representative Carpenter asked if the  losses had to be made                                                                    
up  by the  state in  the future  when an  employee retired.                                                                    
Mr.  Kershner  answered  that the  following  fiscal  years                                                                     
state  contribution  would  be  affected  by  present  asset                                                                    
performance. He  provided an example of  the assets dropping                                                                    
by  minus  25 percent  in  FY  20, consequently,  the  state                                                                    
contribution would  be affected beginning  in FY 22  and for                                                                    
several  years  after.   Representative  Carpenter  wondered                                                                    
whether  he had  a current  projection of  what the  numbers                                                                    
would be. Mr.  Kershner replied that he did  not perform any                                                                    
projections based on recent market performance.                                                                                 
3:45:23 PM                                                                                                                    
                                                                                                                                
Representative  Josephson provided  a hypothetical  scenario                                                                    
about transferring service credit.  He deduced that based on                                                                    
an analysis the  employee would need to make  the plan whole                                                                    
and there  would not be a  year for year service  credit. He                                                                    
wondered if he was correct.                                                                                                     
                                                                                                                                
Representative Kopp responded  that Representative Josephson                                                                    
was correct.                                                                                                                    
                                                                                                                                
Representative Knopp asked whether  the plan would currently                                                                    
have  serious  pension  liabilities because  of  the  market                                                                    
downturn  if  the  bill  was  enacted  two  months  ago.  He                                                                    
wondered whether the state was  better off for not acting on                                                                    
the  legislation sooner.  Mr.  Kershner replied  that if  he                                                                    
currently  perfumed the  analysis the  DC accounts  balances                                                                    
would be significantly lower for  purchasing service. The DC                                                                    
benefits at the  time the fiscal note analysis  was done (as                                                                    
of   6/30/2018)  were   higher   and   presently  would   be                                                                    
significantly lower, reducing the  amount of service members                                                                    
could purchase. He  was uncertain of what  the impacts might                                                                    
be on the  state contributions. He emphasized  that the risk                                                                    
to the  state was increased in  a DB plan versus  a DC plan.                                                                    
The  asset  decline  over  the   prior  week  could  produce                                                                    
different  results if  an analysis  were performed  based on                                                                    
current data.                                                                                                                   
                                                                                                                                
3:49:45 PM                                                                                                                    
                                                                                                                                
Representative  Josephson  thought Mr.  Kershner's  analysis                                                                    
applied to all the tier  plans. Mr. Kershner answered in the                                                                    
affirmative.  He added  that  the  current additional  state                                                                    
contribution  would  be  higher  than  what  was  previously                                                                    
projected because the assets were lower.                                                                                        
                                                                                                                                
3:50:21 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:52:04 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Carpenter   noted  that  Mr.   Kershner  had                                                                    
commented several times about  the current market conditions                                                                    
versus at  other times and  how that affected  the analysis.                                                                    
He recounted that  the HB 79 plan had  levers and mechanisms                                                                    
to keep  the plan solvent  and weather future  downturns. He                                                                    
wondered where the state would be currently.                                                                                    
                                                                                                                                
3:53:26 PM                                                                                                                    
                                                                                                                                
KEN  TRUITT,  STAFF,  REPRESENTATIVE CHUCK  KOPP,  responded                                                                    
that as directed by statute,  the ARM Board would perform an                                                                    
annual actuarial valuation  at the close of  the fiscal year                                                                    
to  determine   how  the  plan  was   performing.  The  plan                                                                    
administrators   would   currently   be  waiting   for   the                                                                    
valuation.  He  reminded  the   committee  that  the  annual                                                                    
actuarial  analysis was  implemented  with  the creation  of                                                                    
Tier 4 because the state had  gone a number of years without                                                                    
an  actuarial evaluation  of asset  performance. The  annual                                                                    
actuarial  analysis  was  built into  the  Public  Employees                                                                    
Retirement System (PERS).                                                                                                       
                                                                                                                                
Representative Carpenter  attempted to clarify his  point of                                                                    
view. He pointed out that the  plan carried a  high  risk to                                                                    
the  state and  thought  the liability  to  the state  would                                                                    
increase.  He emphasized  that the  present market  downturn                                                                    
would  cost the  state in  the  future. He  voiced that  the                                                                    
levers and  mechanisms did not  provide him  confidence they                                                                    
would reduce the states risk in the future.                                                                                     
                                                                                                                                
3:55:56 PM                                                                                                                    
                                                                                                                                
Representative Kopp  responded that the modeling  showed a 5                                                                    
percent growth in the fund  over 10 years. He cautioned that                                                                    
the discussion was gauging the  plan with a  micro  focus on                                                                    
current  market   conditions  instead  of  looking   at  the                                                                    
horizon.  He speculated  that the  COVID  19 pandemic  would                                                                    
pass and  the market would stabilize.  The current situation                                                                    
did  not make  Tier  4 any  better or  lessen  the need  for                                                                    
change. He  suggested that other similar  plans were stable,                                                                    
like  the   state  of   Washingtons   Law   Enforcement  and                                                                    
Firefighters Fund, which would  weather the current  storm.                                                                     
The plan  was funded  at 110 percent.  He thought  the state                                                                    
needed  to look  beyond the  current  storm and  out to  the                                                                    
horizon to  address the problem of  retention. He maintained                                                                    
that  the  plan  was   conservative.  He  characterized  the                                                                    
retention  issue as   high risk  turnover  and  relayed that                                                                    
Alaskas  public safety agencies  were operating in a  crisis                                                                    
mode   because of  it.  He reiterated  that  the savings  in                                                                    
training  dollars  kept  in   the  state  was  significantly                                                                    
greater  than  the  cost  of  the  plan.  He  stressed  that                                                                    
conditions  would  stabilize.  He  advised  against  getting                                                                    
 caught up in the moment when deciding on the legislation.                                                                      
                                                                                                                                
3:59:02 PM                                                                                                                    
                                                                                                                                
Representative Carpenter felt that  it was not reasonable to                                                                    
speculate  that the  current conditions  would stabilize  in                                                                    
under  10 years.  He emphasized  that current  events should                                                                    
prove  that  increasing  risk  to   the  state  with  future                                                                    
obligations was  unwise. The state  was still  struggling to                                                                    
figure  out its  long-term fiscal  future. He  stressed that                                                                    
adopting the plan was a   bad policy decision.  He related a                                                                    
story from personal experience having  a conversation with a                                                                    
policeman who preferred  the Tier 4 plan.  He suggested that                                                                    
there  were  other ways  to  solve  the recruitment  problem                                                                    
without the HB 79 plan.                                                                                                         
                                                                                                                                
4:01:42 PM                                                                                                                    
                                                                                                                                
Representative  Wool  indicated   that  the  current  market                                                                    
 crash  closely  resembled scenario  3. [He referred  to the                                                                    
document  titled  PERS  - 20-Year  Projection of  Additional                                                                    
State  Contributions  (copy  on file)  discussed in  a prior                                                                    
hearing.] He noted  that scenario 3 modeled  a 5-year period                                                                    
of zero growth  followed by 5-years of 2  percent growth. He                                                                    
relayed from  the prior meeting  that the scenario  was dire                                                                    
and  unlikely. He  assumed the  markets  would rebound  over                                                                    
time. He pointed to the  scenario 3 projections for the Tier                                                                    
4  plan  and  noted  that  the state  had  a  $14.2  billion                                                                    
[million]  liability  and under  HB  79  that liability  was                                                                    
$15.8 [million]. He  calculated that it was  a difference of                                                                    
1.6 percent. He  offered that scenario 3 was  dire and hoped                                                                    
the current conditions were  short-term. He wondered whether                                                                    
under the   current scenarios  column  on the  document, the                                                                    
levers were accounted for.                                                                                                      
                                                                                                                                
Mr. Kershner replied  that scenario 3 was  the only scenario                                                                    
where the  plan performed under 90  percent, which activated                                                                    
withholding   the  PRPA   benefits.   However,  the   member                                                                    
contributions were  not increased  due to  the discretionary                                                                    
feature of the mechanism  under any scenario. Representative                                                                    
Wool  asked  if the  member  contribution  increased to  the                                                                    
maximum of  10 percent,  would the states   contributions be                                                                    
lower  under  scenario  3.  Mr.  Kershner  answered  in  the                                                                    
affirmative and  added that increasing  member contributions                                                                    
lowered the costs to the state.                                                                                                 
                                                                                                                                
4:05:37 PM                                                                                                                    
                                                                                                                                
Representative Wool asked if  the employee contribution were                                                                    
increased under  the current  column of   scenario 3  to the                                                                    
maximum  of  10  percent,  would it  alleviate  the  state's                                                                    
lability. He  wondered what  the figure would  be and  if it                                                                    
was  modeled.   Mr.  Kershner   clarified  that   under  the                                                                    
 current   column  there  were  no  adjustment  to  employee                                                                    
contributions. The adjustments were  only possible under the                                                                    
HB 79  plan. He reiterated  that under  HB 79, the  costs to                                                                    
the   state  would   be   lower   with  increased   employee                                                                    
contributions. He indicated that it had not been modeled.                                                                       
                                                                                                                                
4:08:01 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:09:13 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster  MOVED  to  report   CSHB  79(FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note                                                                                                        
                                                                                                                                
Representative Carpenter OBJECTED.                                                                                              
                                                                                                                                
Representative  Josephson commented  that  he was  confident                                                                    
that  HB  79 presented  the  best  path forward  for  public                                                                    
safety and the citizens of the state.                                                                                           
                                                                                                                                
Representative Wool  agreed with  Representative Josephsons                                                                     
comments.  He pointed  out that  the  levers and  mechanisms                                                                    
were not modeled under the  current scenario. He ascertained                                                                    
that they  were a significant  piece of the plan  and wished                                                                    
they had been  modeled to better reflect the  effects of the                                                                    
plan.                                                                                                                           
                                                                                                                                
Representative Knopp  thanked the sponsor for  his hard work                                                                    
on the bill. He would not  be supporting the bill because it                                                                    
only  addressed one  group of  employees. However,  with the                                                                    
comments  made about  the current  fiscal situation,  he was                                                                    
not  comfortable  with  voting  in favor  of  the  bill.  He                                                                    
believed that  the markets were  artificially  inflated  and                                                                    
thought market growth would slow down.                                                                                          
                                                                                                                                
4:12:23 PM                                                                                                                    
                                                                                                                                
Representative LeBon  appreciated the sponsor's  efforts for                                                                    
attempting to  find a  middle ground  for a  defined benefit                                                                    
plan.  He wished  there were  a mechanism  that changed  the                                                                    
contribution  rate to  minimize the  risk to  the state.  He                                                                    
desired more  future  skin in the  game  on the part  of the                                                                    
plans   members  to  increase their  contribution  rate  and                                                                    
share more of the risk with the state.                                                                                          
                                                                                                                                
Co-Chair Johnston thought several  good points had been made                                                                    
by the committee.  She hoped new actuarial  reports would be                                                                    
a part  of the presentation  on the  floor and in  the other                                                                    
body.                                                                                                                           
                                                                                                                                
Representative Carpenter believed  a better solution existed                                                                    
that did  not impose risk  on the  state. He was  opposed to                                                                    
the bill.                                                                                                                       
                                                                                                                                
Representative Carpenter MAINTAINED his OBJECTION.                                                                              
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wool, Josephson, LeBon,  Merrick, Ortiz, Johnston,                                                                    
Foster                                                                                                                          
                                                                                                                                
OPPOSED: Tilton, Carpenter, Knopp, Sullivan-Leonard                                                                             
                                                                                                                                
The MOTION  PASSED (7/4). There being  NO further OBJECTION,                                                                    
it was so ordered.                                                                                                              
                                                                                                                                
CSHB 79(FIN)  was REPORTED  out of  committee with  four "do                                                                    
pass" recommendations, three  "do not pass" recommendations,                                                                    
three  "no  recommendation"   recommendations,  one  "amend"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN2 (ADM/Retirement Payments).                                                                                     
                                                                                                                                
4:15:30 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:16:00 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Johnston  indicated the committee would  be hearing                                                                    
HB 181 next.                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 181                                                                                                            
                                                                                                                                
     "An Act relating to mental health education."                                                                              
                                                                                                                                
4:16:20 PM                                                                                                                    
                                                                                                                                
Co-Chair Johnston indicated there was  a new fiscal note for                                                                    
the bill.                                                                                                                       
                                                                                                                                
4:16:39 PM                                                                                                                    
                                                                                                                                
LACEY SANDERS, ADMINISTRATIVE  SERVICES DIRECTOR, DEPARTMENT                                                                    
OF  EDUCATION AND  EARLY DEVELOPMENT,  OFFICE OF  MANAGEMENT                                                                    
AND  BUDGET, OFFICE  OF THE  GOVERNOR (via  teleconference),                                                                    
reported  that the  department took  into consideration  the                                                                    
committee's  concerns about  costs.  The department  revised                                                                    
the  fiscal   note  [Department   of  Education   and  Early                                                                    
Development  (DEED) appropriated  to  Education Support  and                                                                    
Administrative Services] decreasing it  to $71 thousand. She                                                                    
explained that  the department  eliminated $12  thousand for                                                                    
the creation and printing of  standards booklets and planned                                                                    
to  distribute  the  standards via  electronic  copies.  The                                                                    
department  also  reduced   travel  significantly  from  $60                                                                    
thousand to $30 thousand. The  funding would cover costs for                                                                    
travel for one in-person meeting.                                                                                               
                                                                                                                                
4:18:26 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:21:30 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster  MOVED  to  report  CSHB  181(EDC)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative Carpenter OBJECTED.                                                                                              
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wool,  Josephson,  Knopp, LeBon,  Merrick,  Ortiz,                                                                    
Foster, Johnston                                                                                                                
                                                                                                                                
OPPOSED: Carpenter, Sullivan-Leonard, Tilton                                                                                    
                                                                                                                                
The MOTION  PASSED (8/3). There being  NO further OBJECTION,                                                                    
it was so ordered.                                                                                                              
                                                                                                                                
                                                                                                                                
CSHB 181(EDC)  was REPORTED  out of  committee with  one "do                                                                    
pass" recommendation,  three "do not  pass" recommendations,                                                                    
and one "no recommendation"  recommendation and with one new                                                                    
fiscal impact note by the  Department of Education and Early                                                                    
Development.                                                                                                                    
                                                                                                                                
Co-Chair Johnston relayed the agenda for the following                                                                          
meeting.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
4:23:38 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:23 p.m.                                                                                          

Document Name Date/Time Subjects
HB 268 Southcentral Foundation Support 200313 .pdf HFIN 3/17/2020 1:30:00 PM
HB 268
HB 79 Public Testimony Rec'd by 031620 (2).pdf HFIN 3/17/2020 1:30:00 PM
HB 79
HB 79 Public Testimony Rec'd by 031820 (2).pdf HFIN 3/17/2020 1:30:00 PM
HB 79