HOUSE BILL NO. 323 "An Act relating to the calculation of credited service in the public employees' retirement system for noncertificated employees of school districts, regional educational attendance areas, and state boarding schools; and providing for an effective date." REPRESENTATIVE TOM BRICE, SPONSOR, testified in support of SB 235. He explained that the legislation addresses an inequity that exists within state schools. Currently, certificated school district employees receive a full year retirement credit for each school year worked. The school year is generally 170 - 180 days. Noncertificated school employees receive day-per-day credit toward retirement. The legislation would allow noncertificated employees to receive a full year credit for each school year they work. Employee participation would be optional. Employees who opt-in would pay for the additional credit. There would be no additional cost to the employer. Representative Brice reviewed the legislation. Section 1 delineates the calculation for employee payments. Sections 2 and 3 allow employees to opt-in to the program. New employees have a three-month window of opportunity to opt in. Current employees have six months to opt-in. Employees that are currently inactive have three months to opt-in to the program. Co-Chair Therriault clarified that employees cannot buy back past year's service. Individual employees are given the option of participating. The option to participate is irrevocable. GUY BELL, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRATION provided information on HB 323. He clarified that employees will pay the full cost of the program. He explained that the surcharge is paid entirely by the employee who elects to go with the higher rate and the 12-month retirement credit. Co-Chair Therriault questioned if payments would be prorated or taken out at the end of the school year. Representative Brice stated that payments would be taken out monthly during their period of employment. Representative Kelly MOVED to ADOPT Amendment 1 on behalf of Representative Brice (copy on file). Amendment 1 would delete "on or after the date that the administrator accepts it" on page 2, line 17 and page 3, line 4 and insert "for the school year in which the election is accepted by the administrator." There being NO OBJECTION, it was so ordered. Representative Kelly MOVED to ADOPT Amendment 2 on behalf of Representative Brice (copy on file). Amendment 2 would add the Alaska Vocational Technical Center. Representative Brice explained that the amendment was recommended by the Administration. He observed that the Kotzebue Vocational Center is operated by the school district. There being NO OBJECTION, it was so ordered. Co-Chair Therriault referred to the fiscal note. The fiscal note would fund $116.5 thousand dollars for contractors to update the Division's computer system. BILL CHURCH, RETIREMENT SYSTEMS MANAGER, DEPARTMENT OF ADMINISTRATION provided information on the Department's fiscal note. The fiscal note is needed to update the present system. A separate code identifier must be developed for their old and new systems. Representative Kelly MOVED to report CSHB 323 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 323 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Administration, 5/01/98.