HB 47-PERS CONTRIBUTIONS BY MUNICIPALITIES  8:11:58 AM CHAIR TILTON announced that the first order of business would be HOUSE BILL NO. 47, "An Act requiring each municipality with a population that decreased by more than 25 percent between 2000 and 2010 that participates in the defined benefit retirement plan of the Public Employees' Retirement System of Alaska to contribute to the system an amount calculated by applying a rate of 22 percent of the total of all base salaries paid by the municipality to employees of the municipality who are active members of the system during a payroll period; reducing the rate of interest payable by a municipality with a population that decreased by more than 25 percent between 2000 and 2010 that is delinquent in transmitting employee and employer contributions to the defined benefit retirement plan of the Public Employees' Retirement System of Alaska; giving retrospective effect to the substantive provisions of the Act; and providing for an effective date." 8:12:09 AM REPRESENTATIVE SEATON moved to adopt CSHB 47, Version 29- LS0285\E, Wayne, 2/20/15, as the working document. CHAIR TILTON objected for purposes of discussion. 8:12:37 AM REPRESENTATIVE NEAL FOSTER, Alaska State Legislature, speaking as the sponsor of HB 47, introduced his staff who would explain Version E. 8:12:45 AM PAUL LABOLLE, Staff, Representative Neal Foster, Alaska State Legislature, speaking on behalf of the sponsor, Representative Foster, directed attention to the change in Section 1 of Version E that addresses the village of Atka, which has experienced an increase in its payroll despite a population loss. He explained that if the floor had been applied as previously crafted, Atka's floor would have increased over fiscal year (FY) 2008 and placed the community in penalty mode as some of its payments would be below that of FY 12. Therefore, the change in Section 1 provides for an exclusion such that in order to reset the floor, a community would have to have both a population loss of 25 percent or more and FY 12 salaries would have to be below the FY 08 salaries. He then directed attention to the change in Section 2, which changes the calculation method on interest from being based on the discount rate plus 4 percent to being based on the actuarially assessed rate of the Public Employees' Retirement System (PERS) fund, which is 8 percent. Therefore, an employer paying at the floor level has an 8 percent interest rate for penalties, which makes the system whole. However, for an employer paying above the FY 08 floor the interest rate penalty is 12 percent. 8:15:05 AM REPRESENTATIVE SEATON asked if, from Galena's perspective, there is anything that is detrimental to Galena in Version E. 8:15:20 AM SHANDA HUNTINGTON, City Manager/City Clerk, City of Galena, replied no. 8:15:26 AM CHAIR TILTON, upon determining no one else wished to testify, closed public testimony. 8:15:48 AM REPRESENTATIVE SEATON opined that the changes in Version E keep the state whole and [levels the playing field] for all the cities at the floor while keeping the state whole. 8:16:28 AM CHAIR TILTON withdrew her objection. There being no further objection, CSHB 47, Version E was adopted. She then announced that HB 47 would be held over.