HOUSE FINANCE COMMITTEE February 29, 2000 1:45 P.M. TAPE HFC 00 - 43, Side 1. TAPE HFC 00 - 43, Side 2. TAPE HFC 00 - 44, Side 1. CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 1:45 P.M. PRESENT Co-Chair Therriault Representative Foster Co-Chair Mulder Representative Grussendorf Vice Chair Bunde Representative Moses Representative G. Davis Representative Phillips Representative J. Davies Representative Williams Representative Austerman was not present for the meeting. ALSO PRESENT Mike Tibbles, Staff, Representative Gene Therriault; Melinda Hofstad, Staff, Representative Bill Hudson; Guy Bell, Director, Division of Retirement and Benefits, Department of Administration; Ann Campbell, (Testified via Teleconference), Chair, Alaska Travel Industry Association (ATIA), Anchorage; Carol Kasza, (Testified via Teleconference), Arctic Treks, Fairbanks; Geron Bruce, Legislative Liaison, Department of Fish and Game; Jeff Bush, Deputy Commissioner, Department of Community & Economic Development; Bill Church, Retirement Supervisor, Division of Retirement and Benefits, Department of Administration. SUMMARY HB 206 An Act relating to the migratory game bird conservation tag, to a nonresident combined sport fishing and hunting license, to the nonresident military small game and sport fishing license, to applications for certain licenses, tags, and permits issued by the Department of Fish and Game, and to duplicate crewmember licenses. HB 206 was HEARD and HELD for the new fiscal note to be received by the Department of Fish and Game. HB 335 An Act relating to information contained in retirement system records; relating to retirement boards; relating to procedures and hearings under state retirement systems; relating to benefits for re-employed retired members of retirement systems; relating to eligibility for normal retirement for members of the teachers' retirement system who have Alaska BIA credited service; relating to disability benefits for members of state retirement systems; relating to deduction of premiums from retirement benefits; relating to protection of, and assignment and transfer of, amounts held in retirement systems; relating to retirement benefits for certain employees earning high salaries; relating to qualified domestic relations orders in state retirement systems; relating to the definition of `retirement fund' in the teachers' retirement system; relating to membership of state employees in the teachers' retirement system; relating to refund of contributions made to the judicial retirement system or to the former elected public officers retirement system and repayment of refunded contributions in those systems; relating to self- insurance and excess loss insurance for persons receiving benefits from a state retirement system; relating to participation of elected officials in the public employees' retirement system; relating to reinstatement of credited service in the public employees' retirement system after a refund because of certain levies; relating to the level income option benefit under the public employees' retirement system; relating to participation of employees of political subdivisions and public organizations in the public employees' retirement system; relating to penalties for attempts to defraud the public employees' retirement system; relating to the definition of `pension fund' in the public employees' retirement system; relating to calculation of years of service and of benefits under the public employees' retirement system for non-certificated employees of certain educational employers; and relating to individual accounts maintained for members of the former elected public officers retirement system. CS HB 335 (FIN) was reported out of Committee with "no recommendation" and with a fiscal note by the Department of Administration dated 2/23/00. HB 420 An Act relating to tourism marketing contracts; and providing for an effective date. CS HB 420 (FIN) was reported out of Committee with "no recommendation". HOUSE BILL NO. 206 An Act relating to the migratory game bird conservation tag, to a nonresident combined sport fishing and hunting license, to the nonresident military small game and sport fishing license, to applications for certain licenses, tags, and permits issued by the Department of Fish and Game, and to duplicate crewmember licenses. MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIUALT, spoke to the two modifications made in the work draft committee substitute. The first change resulted from a conceptual amendment insertion of "annual", Page 3, Line 12. Mr. Tibble advised the other change addressed the confusing wording in Section 5. That language was removed and the specified amount for the non-resident military small game hunting license and the amount for the non-resident sport- fishing license. Mr. Tibble's added that there was an error to Page 3, Line 30. The amount should read "$20". Co-Chair Mulder MOVED to adopt the work draft, 1-LS0858\M, Utermohle, 2/29/00. There being NO OBJECTION, it was adopted. Co-Chair Mulder MOVED to adopt Amendment #1, 1-LS0858\K.3, Utermohle, 2/28/00. [Copy on File]. He explained that the amendment would allow for a reciprocal relationship with the Yukon Territory for a resident license fee. He noted that the Yukon currently offers this option to Alaskans. He suggested that to offer it back, would be in the "spirit of compromising". Co-Chair Therriault OBJECTED. He believed it would be more advantageous for residents of the Yukon to come into Alaska to fish than it would be for the Alaskan residents to go into the Yukon. Representative Phillips noted that this issue had come up during the Subcommittee meetings. She pointed out the many sport fishermen that go to the Yukon for hunting and fishing. She supported the amendment, stating the timing was right. Co-Chair Mulder pointed out that the amendment addressed only the Yukon Territory, not British Columbia. The Yukon is not a large area, yet those residents have a mobile population that likes to come into Alaska to take advantage of these activities. GERON BRUCE, LEGISLATIVE LIAISON, DEPARTMENT OF FISH AND GAME, advised that there would be a fiscal impact with a negative impact to revenues. He agreed with Co-Chair Mulder that it would be minimal. Mr. Bruce commented that the Department would need to do some analysis to determine the amount. Mr. Bruce advised that the Department has not taken a position on the amendment at this point. He pointed out that when Senator Donley enacted SB 7, it significantly raised non-resident fishing license. The purpose of that bill was to reduce the impact on Alaska resident fishers from non-residents coming in and competing and the action did have that effect. He noted that HB 206 would run contrary to SB 7. Mr. Bruce stated that it is not clear that the suggested arrangement is currently offered to Alaskans going into the Yukon. Vice Chair Bunde asked what type fisheries were in the Yukon. Mr. Bruce could not speak to the type of fish traffic going into the Yukon. Representative Grussendorf agreed that there would be more pressure for the Canadians to come into Alaska for fishing. He noted that he would not support the amendment. Vice Chair Bunde thought that the greatest impact would be to Southeast Alaska. He asked the projected impact the bill would have to the tourist industry. Mr. Bruce could only speculate on that traffic. Representative Phillips reiterated that the population in the Yukon Territory is small and that the legislation would bring "good will" between the two areas. Discussion followed regarding the threat to the entire ferry fleet in Canada for only six fish. Co-Chair Mulder corrected that was in British Columbia and not the Yukon. Co-Chair Therriault maintained his objection to the amendment. A roll call vote was taken on the motion. IN FAVOR: Moses, Phillips, Bunde, G. Davis, Foster, Mulder OPPOSED: Williams, J. Davies, Grussendorf, Therriault Representative Austerman was not present for the vote. The MOTION PASSED (6-4). Co-Chair Therriault noted that the amendment would change the dollar amount. He requested that the Department provide the new note before the bill would move from Committee. Co- Chair Mulder commented that the fiscal note would affect the Department of Fish and Game and not the general fund. HB 206 was HELD in Committee for final approval of the fiscal note. HOUSE BILL NO. 420 An Act relating to tourism marketing contracts; and providing for an effective date. Co-Chair Therriault stated that HB 420 had been introduced at his request and would address the shift in the contract date between the Department and ATIA. ANNE CAMPBELL, (TESTIFIED VIA TELECONFERENCE), CHAIR, ALASKA TRAVEL INDUSTRY ASSOCIATION (ATIA), ANCHORAGE, voiced her concern regarding the timing scheduled to sign the upcoming contract. She requested that it be changed because of production expense and fund raising activities which need to take place six to eight months before an advertising campaign can be initiated. She commented that visitors planning a trip to Alaska require information approximately one year prior to their intended travel date. Starting distribution of the 2001 Vacation Planner in October 2000 is critical to visitor industry businesses. Research has shown that the peak planning period for an Alaska vacation is 6 to 9 months prior to the intended date of travel. Ms. Campbell stated that ATIA is concerned that there needs to be more clarity regarding the industry intent. The industry understands that at this time, the fund will not be available until July. By making that an earlier date would provide ATIA a target date to address other activities regarding production, marketing and raising commitments from the private sector. Co-Chair Therriault interjected that if the contract date were changed, the Legislature would still be in session and would be able to address concerns resulting from the transition year. He thought that the Legislature should be able to balance the marketing activity. He wanted to see that written in contract and signed during session. He asked if there would be problems completing the negotiations by April 1st. Ms. Campbell replied that ATIA hopes to be able to meet that date. She pointed out that currently there is communication between the Department and ATIA. She noted that there are philosophical differences with the Department, however, both parties are attempting to have a contract resolution as expeditiously as possible. Representative Phillips voiced concern that HB 420 had not yet come to the Tourism Committee. She emphasized that the proposed legislation changes more than the date. Representative Phillips requested that the Department testify on the changes which the legislation would make. JEFF BUSH, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY & ECONOMIC DEVELOPMENT testified that the Department does have concerns with the proposed legislation and listed the general concerns. He noted that the April 1st date was to early, however, August 1st would be better for everyone involved. It is very difficult to negotiate a contract when the amount of the contract is indefinite. Mr. Bush pointed out that in the manner in which the legislation was structured last year, the Department is responsible to decide which components must exist in a tourism contract. He stressed that it would be difficult to accomplish that without knowing in advance what the funding level is going to be. Mr. Bush pointed out that an additional concern is that the proposed April date falls at the end of the Legislature. That is a very busy time for the Department and private industry as well. He pointed out that the fund raising takes place through the selling of the Vacation Planner ads through May. He projected that it would be difficult for industry to guarantee fund raising by the April 1st date. Under statute, the industry would need to guarantee a match requirement. He reiterated that it would be difficult to raise the funds by the April 1st date. Mr. Bush advised that the Department's concerns are more magnified this year in as much as it is the transition year. The legislation requires that the Department approve a marketing plan. That marketing plan is supposed to be put together by a marketing team. He indicated that the team was just recently formed a couple of weeks ago. There has not been a plan yet proposed by the industry. He stated that the Department is confident that a plan will not be available by April 1st. Mr. Bush quoted AS 44.33.125(B), which lists the essential components that should be included in a marketing contract. Mr. Bush reiterated that creating such a plan is unrealistic given the short period of time remaining before April 1st. He mentioned the fund raising issue. He added that if a contract is not entered into, then theoretically, the Department is supposed to do the marketing without even considering entering into a contract. Mr. Bush noted that the State is responsible to determine that the entity that they are contracting with has a set membership. That membership is set, based upon who actually joins the organization. The permanent members are not yet known and the Department can not enter into a contract with them until that information is available. Representative Phillips inquired if the Department thought that the concerns expressed could be handled by July 1st. Mr. Bush replied that they could be addressed by then and that it would be good timing as that is the beginning of the new fiscal year. Co-Chair Therriault interjected that the Department negotiates contracts all the time that are contingent on funding from the Legislature. He asked why that would be a problem for this contract. Mr. Bush explained that it would be uncomfortable with concerns such as the Internet coverage. In conclusion, he stated it would be the components "at the edge" that would be an issue for budget concerns. Co-Chair Therriault advised that the industry has indicated that they would take the current plan and move it forward. Mr. Bush explained that a proposal being rolled forward has been expected since the beginning of the process. However, the language of the statue reads that the marketing plan must be put together by their marketing organization and that it must meet the requirements of the statute. He argued that there might be a dispute over some of the details of that plan. Until the plan is presented to the Department, there is no assurance that the existing program will roll forward. Vice Chair Bunde supported the idea of an April date giving the Legislature long-term oversight, however, he understood that this was a transition year and that the July might work better. Mr. Bush acknowledged that moving the date to July 1st would alleviate many of the Department's concerns. He admitted that there remain concerns regarding appropriations following the contract issue. Ms. Campbell clarified that the ATIA marketing committee has been meeting for the past two weeks in order to able to meet the deadlines. She requested more discussion regarding what needs to be included in the marketing plan. Ms. Campbell noted that April 1st is the goal. Co-Chair Therriault inquired if the funding amount "slipped" a little, would that language is expected in the contract. Ms. Campbell explained that industry understands the position of the Department, however, the reality is that there are targets which will continue to work well for ATIA. Co-Chair Therriault pointed out that there is a condensed time period during the summer months when the tourism activities are at their peak. He believed that last year, the Legislature made the wrong decision when choosing the August date. If the July 1st date were used, that would be in conflict with the peak tourism period. Ms. Campbell agreed the wrong date had been chosen. Ms. Campbell pointed out that ATIA does not collect all the funds at one time. ATIA is prepared to bring the match in as the funds are brought in. Co-Chair Therriault inquired the latest date that would work for ATIA that would not be interuptive with seasonal business. Ms. Campbell replied that industry could go with the May 1st date this year. Representative J. Davies suggested an option would be to forward fund the contract for one year, which would then provide time for ATIA to raise the match. He agreed that this year, presents a unique circumstance. Co-Chair Therriault responded that he did not anticipate funding this component for two years. Representative Phillips pointed out that at present time, the Department does not have an "entity" to negotiate with. She agreed that there would be great merit in establishing an earlier time for the industry in years out, but not this year, the transition year. Representative Phillips recommended that for this year only, the date be established for July 1st and from then forward, the date could be set for either April or May 1st. CAROL KASZA, (TESTIFIED VIA TELECONFERENCE), ARCTIC TREKS, FAIRBANKS, agreed with Department's recommendations regarding the date change. She commented that she is a member of ATIA. She believed that there would be a "shake down" in the original negotiations. Ms. Kasza commented that in the future, the April date would make more sense and that the idea of forward funding would be the best idea. Ms. Kasza voiced full support of fully funding the budget for the Division of Tourism. Co-Chair Therriault MOVED to adopt Amendment 1, which would change the date to May 1, on Page 1, Line 6. Representative Phillips OBJECTED. She reiterated that one more month would not work this year and that ATIA needs the time to get the program in place so that it will be effective and the transition has time to work. Representative Grussendorf commented that the proposed change would place the Division into a "state of flux" that it would spread the Department to "thin". He supported a date change to July 1st. Co-Chair Therriault reiterated that it is important that the Legislature be in session in order to comment on the final product. Vice Chair Bunde questioned the urgency for this year. He noted that May 1st would be too late for the Legislature to have much input. Co-Chair Therriault explained that it is important to get through the transition year. He believed that this would be the most important year. Representative G. Davis pointed out that this "plan" has been thought out and discussed for a long time. He believed that the plan could already be put in place. Co-Chair Therriault reiterated his intent that the Committee was here to look at the contract. Representative Phillips emphasized that it is important to realize that until the membership is set, the Department does not have anyone to contract with. She pointed out the concern has not yet been addressed. A roll call vote was taken on the motion. IN FAVOR: Williams, Bunde, G. Davis, Foster, Mulder, Therriault OPPOSED: Phillips, J. Davies, Grussendorf, Moses Representative Austerman was not present for the vote. The MOTION PASSED (6-4). Co-Chair Mulder MOVED to report CS HB 420 (FIN) out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. CS HB 420 (FIN) was reported out of Committee with "no recommendation". (TAPE CHANGE, HFC 00-43, Side 2) HOUSE BILL NO. 335 An Act relating to information contained in retirement system records; relating to retirement boards; relating to procedures and hearings under state retirement systems; relating to benefits for re-employed retired members of retirement systems; relating to eligibility for normal retirement for members of the teachers' retirement system who have Alaska BIA credited service; relating to disability benefits for members of state retirement systems; relating to deduction of premiums from retirement benefits; relating to protection of, and assignment and transfer of, amounts held in retirement systems; relating to retirement benefits for certain employees earning high salaries; relating to qualified domestic relations orders in state retirement systems; relating to the definition of `retirement fund' in the teachers' retirement system; relating to membership of state employees in the teachers' retirement system; relating to refund of contributions made to the judicial retirement system or to the former elected public officers retirement system and repayment of refunded contributions in those systems; relating to self-insurance and excess loss insurance for persons receiving benefits from a state retirement system; relating to participation of elected officials in the public employees' retirement system; relating to reinstatement of credited service in the public employees' retirement system after a refund because of certain levies; relating to the level income option benefit under the public employees' retirement system; relating to participation of employees of political subdivisions and public organizations in the public employees' retirement system; relating to penalties for attempts to defraud the public employees' retirement system; relating to the definition of `pension fund' in the public employees' retirement system; relating to calculation of years of service and of benefits under the public employees' retirement system for noncertificated employees of certain educational employers; and relating to individual accounts maintained for members of the former elected public officers retirement system. MELINDA HOFSTAD, STAFF, REPRESENTATIVE BILL HUDSON, explained that HB 335 had been introduced at the request of the Division of Retirement and Benefits, and is a clean up bill. Ms. Hofstad noted that according to the Department of Administration, there are federal laws, court settlements and other technical issues that need to be addressed in updated State law. Additionally, indicated in the legislation are some efficiency measures requested by various retirement boards. She added that there has not been a clean-up bill for many years and some of the issues addressed in HB 335 are longstanding ones. Ms. Hofstad added that the legislation is aimed at addressing issues involving clarification of current practices and law, compliance with new federal laws, compliance with various settlements, and board efficiencies. She noted that every effort had been made to stay away from policy changes. Ms. Hofstad concluded that there is nothing in the legislation that enhances or diminishes any retirement benefit for active employees or retirees in any public retirement system, and no section, which will increase employer's costs. Co-Chair Mulder MOVED to adopt the work draft version 1- LS1217\K, Cramer, 2/29/00, as the version before the Committee. There being NO OBJECTION, it was adopted GUY BELL, DIRECTOR, DIVISION OF RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRAITON, spoke to the changes made in the version before the Committee. He provided a brief sectional analysis. Mr. Bell commented that he had spoken to each Committee member or their staff regarding the legislation. Representative J. Davies pointed out that discussion had not been to the version before the Committee at present time. Co-Chair Therriault advised that the committee substitute had "dropped out" a few sections. ? Mr. Bell stated that Section 1 was needed as a result of Court action. The section exempts member's records, including retiree records under the Public Records Act. Co-Chair Therriault asked why the retiree organization should have access to that information. Mr. Bell replied that those retirees would be representing the interest of the systems retirees, and disseminating information from the retiree organization. Vice Chair Bunde inquired if that organization was composed only of members from the State system. Mr. Bell replied that the language is specific to retires receiving benefits under one of the State's systems. Vice Chair Bunde pointed out that it was the intent of the Alaska Association of Retired Persons (AARP) to represent people retired from a number of different systems. Mr. Bell explained that the section was more narrowly defined and that they must be affiliated with an organization representing employees in this system. Co-Chair Therriault inquired where that section came from. Mr. Bell replied that piece resulted from requests from the retiree organizations. He could not remember who that group consisted of. ? Section 2 is a technical clean up for the physician board members recommendation for efficiency for medical disability appeals. Representative Grussendorf questioned the appeal process. Mr. Bell explained the way the disability process works. If a claim is denied, the person has the right to appeal. The retirement board then has a formal appeal. If it is a medical disability, the board would include two physicians to participate and then they would make the ruling. He noted that decision could be open to challenge in the Supreme Court. ? Section 3 would carry a fiscal impact. Mr. Bell noted that a fiscal note had been submitted with the bill for $29 thousand dollars. This section would provide an honorarium payment to the Teacher Retirement System (TRS) Board members. ? Section 4 would place in statute, regulations defining a quorum. Representative J. Davies asked what had been dropped. Mr. Bell replied that Section 4 was dropped out of the work draft before the Committee. Co-Chair Therriault noted that after he had requested that the committee substitute be drafted, he had reconsidered his choice. He noted that he had an amendment drafted to address that concern, 1-LS1217\K.1, Cramer, 2/29/00. [Copy on File]. ? Mr. Bell noted that Section 4 was an effort to make the hearing process consistent with the appeals. ? Section 5 makes a clarification or correction which the Department believes is appropriate for the penalty a person takes when they retire early and then subsequently comes back to work. BILL CHURCH, RETIREMENT SUPERVISOR, DIVISION OF RETIREMENT AND BENEFITS, DEPARTMENT OF ADMINISTRATION, noted that when someone elects to retire before their normal retirement date, they take a reduced benefit spread over their life- time. When someone returns to work under the current law, they forego their retirement benefit for reemployment. Once they re-retire, their benefit is recalculated, however, the first contract remains in place. There are no adjustments to that benefit currently under law. Section 5 would give equity so that the individual would be able to receive back the equity that they had lost. ? Mr. Bell commented that Section 6 would clarify the existing practice for the Bureau of Indian Services (BIA) section. ? Section 7 adds another clarification of how the State does business on disability benefits for teachers. ? Section 8 addresses filing requirements for disabilities by making them the same for teachers and public employees. It would create consistency between the TRS and Personnel Employee Retirement System (PERS). ? Section 10, contained in the State Affairs version, has been deleted from the current work draft. That section clarified that the TERS board does have a roll in advising on ad hoc pension and post retirement pension adjustments. Representative J. Davies asked why that section had not been included. Co-Chair Therriault noted that the language would "muddy" the waters by including it in statute as the practice is currently being done. Representative J. Davies inquired why the board had requested that clarification. Mr. Bell replied that the Board felt that this was an important role of theirs. He acknowledged that this is not currently an issue. Representative J. Davies acknowledged that he knew very little regarding this area. He suggested that the language might avoid expensive lawsuits. Co-Chair Therriault asked if the Board would be making the policy calls or giving the advice. He questioned if inclusion of that language would provide an opening for potential problems. ? Mr. Bell stated that Section 11 was a clarification of the practice regarding the deducting of retiree insurance premiums from the retirement checks. ? Section 12 addresses the Qualified Domestic Relations Order (QDRO) and allows the alternate employee the right to receive the identified portion of a contribution account. ? Section 13 allows direct rollover of an individual's retirement account to an IRA, which would be a convenience to all members. Representative Phillips questioned if there was a charge associated for that service. Mr. Bell replied that there is no charge or penalty for that service. It is more convenient for the Department. The second part of Section 13 is a deletion for the authorization for a voluntary deduction of the membership dues. It has been deleted in the committee substitute. Representative J. Davies asked why it had been removed. Co- Chair Therriault advised that he personally did not like the automatic system. ? Mr. Bell continued, Sections 14 & 15 clarify that if a person commits fraud, it is a Class A misdemeanor. ? Section 16 is an Internal Revenue Service (IRS) requirement adjustment. ? Section 17 sets a limit on compensation base calculation of retirement benefits. ? Section 18 is a Qualified Domestic Relations Order (QDRO) definition to clarify that a former spouse has a right to the contribution account of a member. ? Section 19 clarifies who in the Department of Education is in the TRS system. ? Section 20 moves the Judicial Retirement System (JRS). ? Sections 21-24 address the same situation in the JRS QDRO's concern and the ability to roll money directly to an IRA and the deduction of premiums for insurance. ? Section 25 takes the same actions for the National Guard and Naval Militia Retirement System. ? Section 26 adds language authorizing self-insurance for the retiree-medical, dental, audio and long term care. ? Section 27 would separate the PERS Board from the other personnel boards. ? Section 28 would change the election process. Co-Chair Therriault advised that Section 28 was included as the Alaska State Pension Investment Board (ASPIB) uses that system. Representative Phillips asked if it was common practice that a majority of members not be present for a vote. Mr. Bell noted that over the past elections years, there have been multiple candidates with voter run off. ? Mr. Bell commented that Section 29 identifies the appointment and number of physician members to the PERS Board. ? Section 30 provides for an honorarium payment to the PERS Board members consistent with that paid to the members of the ASPIB. ? Section 31 relates to the definition of a quorum for the conduct of its business. He noted that this resulted from the passage of SB 9, last session. ? Section 32 clarifies that the PERS Board has the authority to adopt regulations for the conduct of hearings. ? Section 33 is new and applies to PERS membership only in how to move in and out of the retirement system for elected officials. ? Section 34 addresses the early retirement system previously addressed by Mr. Church. ? Sections 35-39 relates to SB 9 and the revocability of an election for non-certificated school district employees. ? Sections 40-41 address the filing requirements for disabilities. ? Section 42 clarifies that the level income option, which was repealed in 1996, is available to people in the system before that date. ? Section 43 would clarify that the PERS Board has an advisory role and ad hoc for post retirement pension vestments. That section has been deleted in the work draft. ? New Section 43 addresses the QDRO for member account contributions. ? Section 44 allows the rollover into an individual retirement account. ? Sections 45-47 removes language no longer necessary because of sections added earlier in the bill. ? Section 48 is the authorization to deduct retiree insurance premiums. ? Section 49 is a new section applying to PERS only. It addresses issues where employee requests the employer to withdraw their coverage in the PERS system. ? Section 50 defines the Class A misdemeanor and added to that particular retirement system. Mr. Bell noted that this was another clarification of SB 9, regarding the basis calculation for the surcharge. ? Sections 51-52 are the highly compensated individual requirements of the Internal Revenue Service (IRS) code for PERS. ? Section 53 clarifies that the income on investments of the PERS fund does belong to that fund. ? Section 54 speaks to the QDRO's related language for the PERS. ? Section 55 would remove the physician's members of the PERS and TRS board from the requirements of Sections 39 and 50. ? Section 56 provides repeller language to the current language contained in law. ? Sections 57-58 are changes to the Elected Public Retirement System (EPORS) and make that statute consistent with the PERS and TRS. ? Section 59 was previously addressed and makes that language consistent. Co-Chair Therriault MOVED to adopt Amendment #1, which speaks to the setting of the quorum. [Copy on File]. Mr. Bell explained that the amendment would provide clear authority in statute to allow the boards to do what they currently have already been doing. (TAPE CHANGE, HFC 00 - 44, Side 1). Mr. Bell noted that any thing that the Board does could be challenged in Court. The amendment would provide an effective way to protect that challenge. Vice Chair Bunde voiced support of the amendment. He asked if the amendment should contain additional guidance language assuming a minimum of members. Mr. Bell suggested that would be a policy call for the Legislature to make. He did not think that it would be a necessary call. The Board does not have independent regulation making authority and it would be subject to public process. Vice Chair Bunde MOVED to report CS HB 335 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS HB 335 (FIN) was reported out of Committee with a "no recommendation" and with a fiscal note by the Department of Administration dated 2/23/00. ADJOURNMENT The meeting adjourned at 3:25 P.M. H.F.C. 16 2/29/00