Legislature(2021 - 2022)SENATE FINANCE 532

04/14/2021 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Moved CSSB 89(FIN) Out of Committee
<Bill Hearing Rescheduled from 04/12/21>
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 14, 2021                                                                                            
                         9:01 a.m.                                                                                              
9:01:42 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Bishop called the Senate Finance Committee meeting                                                                     
to order at 9:01 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Co-Chair                                                                                                  
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Natasha von Imhof                                                                                                       
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Erin Shine, Staff, Senator Click Bishop; Neil Steininger,                                                                       
Director, Office of Management and Budget, Office of the                                                                        
PRESENT VIA TELECONFERENCE                                                                                                    
SB 55     EMPLOYER CONTRIBUTIONS TO PERS                                                                                        
          SB 55 was HEARD and HELD in committee for further                                                                     
SB 89     ASSISTED LIVING HOMES: HOUSE RULES                                                                                    
          CSSB 89(FIN) was REPORTED out of committee with a                                                                     
          "do pass" recommendation and with one previously                                                                      
          published zero fiscal note: FN 1(DHS).                                                                                
SENATE BILL NO. 89                                                                                                            
     "An Act relating to house rules for assisted living                                                                        
9:02:40 AM                                                                                                                    
Co-Chair Bishop discussed housekeeping.                                                                                         
9:03:12 AM                                                                                                                    
AT EASE                                                                                                                         
9:03:19 AM                                                                                                                    
Senator Olson MOVED to ADOPT proposed committee substitute                                                                      
for SB 89, Work Draft 32-GS1675\B (Dunmire, 4/13/21).                                                                           
Co-Chair Stedman OBJECTED for discussion.                                                                                       
9:04:15 AM                                                                                                                    
ERIN SHINE, STAFF, SENATOR CLICK BISHOP, relayed that there                                                                     
was only one change and read from an Explanation of Changes                                                                     
document (copy on file):                                                                                                        
     Page 3, Line 21 Removes  Section 4 from version A which                                                                    
     instructed the  revisor of statutes  to give  effect to                                                                    
     the  provisions  in  the Act  if  the  executive  order                                                                    
     submitted  reorganizing the  Department  of Health  and                                                                    
     Social  Services became  law. Executive  Order 119  was                                                                    
     withdrawn on March 11, 2021.                                                                                               
Co-Chair Stedman WITHDREW his objection. There being NO                                                                         
further OBJECTION, it was so ordered.                                                                                           
9:05:09 AM                                                                                                                    
Senator Olson asked the effect of withdrawal of Executive                                                                       
Order 119 would have on SB 89.                                                                                                  
Ms. Shine explained that there was no effect on the                                                                             
material provisions 1 through 3 on SB 89.                                                                                       
9:06:15 AM                                                                                                                    
Senator  von Imhof  discussed  the  zero-impact fiscal  note                                                                    
from the Department of Health  and Social Services. She read                                                                    
from the analysis:                                                                                                              
     This  bill   would  align   Alaska  law   with  federal                                                                    
     regulations   around    Medicaid-supported   home   and                                                                    
     community-based    waiver    settings.   Because    the                                                                    
     department has  already worked with providers  to align                                                                    
     with these federal regulations this  bill would have no                                                                    
     fiscal impact to the department.                                                                                           
9:07:09 AM                                                                                                                    
Senator  Hoffman  MOVED  to  report   CSSB  89(FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
CSSB 89(FIN) was REPORTED out  of committee with a "do pass"                                                                    
recommendation  and  with   one  previously  published  zero                                                                    
fiscal note: FN 1(DHS).                                                                                                         
9:07:30 AM                                                                                                                    
AT EASE                                                                                                                         
9:09:14 AM                                                                                                                    
SENATE BILL NO. 55                                                                                                            
     "An  Act  relating  to employer  contributions  to  the                                                                    
     Public  Employees'  Retirement  System of  Alaska;  and                                                                    
     providing for an effective date."                                                                                          
9:09:14 AM                                                                                                                    
Co-Chair Bishop discussed housekeeping.                                                                                         
9:09:57 AM                                                                                                                    
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE OF  THE GOVERNOR,  explained that  the intent  of the                                                                    
bill  was to  change the  way  that the  state financed  the                                                                    
state  assistance  portion  of PERS  contributions  for  the                                                                    
State  of Alaska  as  an  employer. He  said  that the  bill                                                                    
impacted the state assistance payments  made in the language                                                                    
section   of   the    operating   budget   and   transferred                                                                    
approximately  $100  million  of  those  payments  into  the                                                                    
agency operations  budgets where  they could be  shared with                                                                    
other fund sources  that paid for state  agency payroll. The                                                                    
move would  result in a  net savings of  approximately $25.7                                                                    
million of UGF by utilizing  other fund sources to cover the                                                                    
cost. He  relayed that  under current  law the  payment into                                                                    
the PERS  system based on  payroll was capped at  22 percent                                                                    
of payroll;  the mechanism by  which the bill  would achieve                                                                    
savings  would be  to  remove  the cap  and  apply the  full                                                                    
actuarial rate  to state payroll.  He relayed that  the rate                                                                    
for the  following fiscal  year would  be 30.11  percent. He                                                                    
shared that the  difference in percentage would  be added to                                                                    
state payroll but compensated for  with the reduction of the                                                                    
state assistance portion in the budget.                                                                                         
9:11:54 AM                                                                                                                    
Co-Chair Stedman  asked for commentary on  potential impacts                                                                    
of the legislation at the local level.                                                                                          
Mr. Steininger  stated that  the bill  was intended  only to                                                                    
impact  the State  of Alaska  as an  employer and  would not                                                                    
impact  municipalities  and the  like.  The  bill would  not                                                                    
impact  the  Teacher's  Retirement System  (TRS)  and  would                                                                    
continue to  make the full actuarial  contribution and would                                                                    
not impact retirement payments.                                                                                                 
9:13:09 AM                                                                                                                    
Senator   Olson   referenced    the   22   percent   payroll                                                                    
contribution that  had a  cap. He  wondered what  other fund                                                                    
sources would make up the 30.11 percent.                                                                                        
Mr.  Steininger stated  that the  funds  would be  primarily                                                                    
federal receipts.                                                                                                               
9:13:54 AM                                                                                                                    
Senator  Olson  asked what  would  happen  if there  was  an                                                                    
interruption  in   federal  receipts  and  a   shortfall  in                                                                    
Mr.  Steininger replied  that OMB  had had  discussions with                                                                    
state agencies  about the possibility  of delayed  funds and                                                                    
said that any shortfall would be accommodated with UGF.                                                                         
9:15:03 AM                                                                                                                    
Senator  Wielechowski  asked  about the  proposed  effective                                                                    
date of  July 1, 2021.  He asked whether  the administration                                                                    
had considered  moving the date  to as early as  possible in                                                                    
order to  take advantage  of the infrastructure  or Covid-19                                                                    
funds from the federal government.                                                                                              
Mr. Steininger explained that the  date was kept to simplify                                                                    
the accounting  work done  by the  state. He  furthered that                                                                    
changes  would have  to be  made  to profiles  that pay  the                                                                    
salaries  for state  employees and  making changes  mid-year                                                                    
would be more work than was necessary.                                                                                          
Senator  Wielechowski recognized  there could  be more  work                                                                    
and  asked whether  there had  been a  cost-benefit analysis                                                                    
done to determine whether the change was truly beneficial.                                                                      
Mr. Steininger  conveyed that most  of the money  that would                                                                    
come  to  the  state   through  a  potential  infrastructure                                                                    
package  would likely  be spent  in FY  22 and  beyond; very                                                                    
little of  the money would be  spent in FY 21.  He said that                                                                    
the  effective  date would  capture  the  funds because  the                                                                    
effective  date would  allow for  the charge  to be  for any                                                                    
work  done  after  July  1.     Most  of the  work  done  of                                                                    
infrastructure projects would happen after that date.                                                                           
9:17:17 AM                                                                                                                    
SB  55  was   HEARD  and  HELD  in   committee  for  further                                                                    
Co-Chair Bishop set an amendment  deadline for Friday, April                                                                    
16, 2021 at 5PM. He discussed further housekeeping.                                                                             
9:17:50 AM                                                                                                                    
The meeting was adjourned at 9:17 a.m.                                                                                          

Document Name Date/Time Subjects
SB 89 Explanation of Changes ver. A to B 4.13.2021.pdf HHSS 4/29/2021 3:00:00 PM
HHSS 5/13/2021 3:00:00 PM
SFIN 4/14/2021 9:00:00 AM
SB 89
SB 89 Work Draft ver. B 4.13.2021.pdf HHSS 4/29/2021 3:00:00 PM
HHSS 5/4/2021 3:00:00 PM
SFIN 4/14/2021 9:00:00 AM
SB 89