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Legislative Mid-Term Report
September 27, 2007

2007 Session: The first session of the 25^th Alaska Legislature adjourned on Tuesday, May 16.

Special Session No.1: A special session for the purpose of reviewing senior benefits took place in Anchorage on Tuesday, June 26, 2007. It lasted one day and was called by the Legislature pursuant to Art. 2, Sec. 9 of the state constitution after more than two-thirds of legislators responded affirmatively to a poll. The special session resulted in the passage of an appropriations measure to fund the senior benefit program for needy senior Alaskans.

Special Session No.2: A second special session called by the governor is scheduled to begin on Oct. 18 for the purpose of reviewing the Petroleum Production Tax (PPT) in light of corruption charges against lawmakers involved with setting its terms.

2008 Session: The second session of the 25^th Alaska Legislature will convene on Jan. 15, 2008. There are approximately 15 weeks until the Legislature re-convenes.

Note: The 2008 session is scheduled for 90 days, from Jan. 15 to April 15, 2008. This reflects the passage of Measure No. 1 (05LEGS) in 2006, to reduce legislative sessions from 120 days to 90 days.

State Bills of Interest:

The following bills were introduced at the end of the last session.

            SB 183-Repeal Defined Contribution Retirement Plan

The following bills received hearings during the last session and await committee action:

HB 13-Issue Bonds to Control Unfunded PERS/TRS Liability à Senate Finance
HB 48-PPT Credits to Offset Unfunded PERS/TRS Liability à Senate Finance
HB 125-Long-Range Fiscal Plan à Senate Finance
HB 179-Revisions to Defined Benefit Retirement Plan à House Finance
HJR 25-Support EFCA à House Rules

SB 28-Limit Mandatory OT for Registered Nurses à Senate Labor & Commerce
SB 153-Military Time toward 20-year Retirement à Senate Labor & Commerce

The following bills have passed:

HB 95-Operating Budget à Passed/Signed
HB 209-Regulatory Commission of Alaska à Passed/Signed
SB 123-Revisions to Defined Benefit Retirement Plan à Passed/Signed
SB 125-State Bailout of PERS/TRS Unfunded Liability à Waiting for concurrence

The following bills have failed:

HB 164-Modify Ocean Ranger Program à Failed to pass House

Federal Legislation of Interest:

Employee Free Choice Act (H.R. 800, S. 1041)
Employee Free Choice Act (H.R. 800, S. 1041)

Legislation: HB 13 (Issue Bonds to Control Unfunded PERS/TRS Liability)
Status: Pending
Sponsor: Rep. Mike Hawker (R)-Anchorage
ASEA Position: SUPPORT       
PAC Recommendation: SUPPORT

Bill Status: HB 13 was introduced by Rep. Mike Hawker as a pre-filed bill in January 2007. The bill gained eight co-sponsors during its House committee referrals. A committee substitute for HB 13 passed the House and was transmitted to the Senate on April 26. CSHB13 (FIN) was referred to Senate Finance the following day.

Bill Summary: HB 13 creates a mechanism for the issuance of bonds to stabilize the unfunded liability of the state's defined contribution retirement systems. The first of two fiscal notes attached to the bill reads, "The premis (sic) of undertaking this type of transaction is borrowing at rates that are at least 1.5% lower than the actuarial assumed rate of return on the pension funds (8.25%)."

The resulting capitalization by one or more municipalities through the bonding process would require accounting practices that are not currently understood. From the second fiscal note, "The division [Retirement & Benefits] will work with the Department of Law to develop regulations to govern the accounting for such accounts."

Action Needed: Contact members of the Senate Finance committee to encourage support of this legislation.

Legislation: HB 48 (PPT Credits to Offset Unfunded PERS/TRS Liability)
Status: Pending
Sponsor: Reps. Paul Seaton (R)-Homer and Mike Kelly (R)-Fairbanks
ASEA Position: MONITOR
PAC Recommendation: MONITOR

Bill Status: HB 48 is currently in Senate Finance after passing the House without opposition.

Bill Summary: This bill would authorize the Alaska Retirement Management Board (ARM) to purchase transferable tax credit certificates for 92 percent of the face value of the certificates. The ARM board would then sell the certificates to the Department of Revenue for the full face value of the certificates. The proceeds of these sales would be used by the ARM board to defray the unfunded liability of the state's defined contribution retirement systems.

Action Needed: No action is currently recommended.

Legislation: HB 95 (Operating Budget)
Status: Passed/Signed
Sponsor: Request of the Governor
ASEA Position: MONITOR
PAC Recommendation: MONITOR
Companion Bill(s): SB 50

Bill Status: HB 95 was reconciled by conference committee and passed by both chambers on May 16, the final day of the first session. The bill was transmitted to the governor and signed into law.

Bill Summary: This bill did not contain appropriations for a GGU collective bargaining agreement or increased employer health care contributions for GGU members. Once a tentative agreement has been ratified by the membership pursuant to state law, the administration will submit the GGU contract to the Legislature for consideration.

Action Needed: No action is needed.

Legislation: HB 125 (Long-Range Fiscal Plan)
Status: Pending
Sponsor: Ways & Means
ASEA Position: SUPPORT
PAC Recommendation: SUPPORT

Bill Status: The House Ways & Means Committee, chaired by Rep. Mike Hawker, introduced HB 125 in February 2007. It passed the House in the form of CSHB 125(FIN) without opposition. The Senate Finance committee is its first (and currently only) committee of referral.

Bill Summary: The bill would require the governor to balance the state budget and to submit a long-range fiscal plan supported by analysis of fiscal data for the succeeding 10 years. The bill would effectively prevent the state from allowing operating shortfalls cause the interruption of state services.

Action Needed: Contact members of the Senate Finance committee to encourage support of this legislation.

Legislation: HB 164 (Modify Ocean Ranger Program)
Status: Failed
Sponsor: Transportation
ASEA Position: OPPOSE
PAC Recommendation: OPPOSE

Bill Status: HB 164 was introduced this spring by the House Transportation Committee, chaired by Rep. Kyle Johansen. It was referred to its sponsoring committee, House Judiciary and House Finance, each offering lukewarm support. The bill failed to pass the House on May 8, following three unsuccessful attempts to amend the bill.

Bill Summary: The bill would authorize the DEC Commissioner's discretion over the implementation of the Ocean Ranger program to fulfill the intent of Ballot Measure No. 2., passed by the voters in November 2007.

Legislation: HB 179 (Revisions to Defined Benefit Retirement Plan)
Status: Pending
Sponsor: Rep. Mike Kelly (R)-Fairbanks
ASEA Position: OPPOSE
PAC Recommendation: OPPOSE

Bill Status: HB 179 passed the House State Affairs Committee in early April after the provision increasing employee contributions by 5% to 11.5% of salary was removed. House State Affairs removed this provision on a six to one vote. The bill waits for a hearing in House Finance.

Bill Summary: This bill revises SB 141 to specify a funding source for teachers' disability and death benefits; add annual cost of living increases to catastrophic benefits in the new defined contribution retirement plan; limits survivor entitlements while receiving disability or death benefits; clarifies changes to maintain Internal Revenue Code requirements.

Action Needed: Contact members of the House Finance Committee to discourage re-introduction of an employee retirement contribution rate increase.

Legislation: HB 209 (Regulatory Commission of Alaska)
Status: Passed/Signed
Sponsor: Labor & Commerce
ASEA Position: OPPOSE
PAC Recommendation: OPPOSE

Bill Status: House Labor & Commerce Committee (Rep. Kurt Olson, chair) introduced HB 209 in March 2006. The bill enjoyed a burst of activity in early May that pushed it through both chambers before the end of the session.

Bill Summary: This bill was originally drafted with language to transfer GGU members in the Regulatory Commission of Alaska (RCA) from classified service to partially-exempt service. This provision has been removed from the legislation at the request of ASEA.

Action Needed: No action need.

Legislation: HJR 25 (Support EFCA)
Status: Pending
Sponsor: Rep. John Harris (R)-Valdez
ASEA Position: SUPPORT
PAC Recommendation: SUPPORT

Bill Status: Introduced during the last week of the session, this bill was referred to the House State Affairs Committee and received a hearing on May 12. It has been referred to the House Rules Committee.

Bill Summary: This bill would indicates the Alaska State Legislature's support for the Employee Choice Act of 2007, which would authorize the National Labor Relations Board to certify a union as the bargaining representative when a majority of employees voluntarily authorizations designating that union to represent them, provide for first contract and arbitration, and establish meaningful penalties for violations of a worker's freedom to choose a union.

Action Needed: Contact members of State House State to encourage support of this resolution.

Legislation: SB 28 (Limit Mandatory OT for Registered Nurses)
Status: Pending
Sponsor: Sen. Bettye Davis (D)-Anchorage
ASEA Position: SUPPORT
PAC Recommendation: SUPPORT

Bill Status: This bill has received hearings in the Senate Health, Education and Social Services Committee and Senate Labor & Commerce Committee. It waits for further hearings in Senate L&C.

Bill Summary: Restricts mandatory overtime for nurses except in circumstances of emergency, and provides for penalties and compensation.

Action Needed: Contact members of the Senate Labor & Commerce Committee to encourage support of this legislation.

Legislation: SB 123 (Revisions to Defined Benefit Retirement Plan)
Status: Passed/Signed
Sponsor: Request of the Governor
ASEA Position: OPPOSE
PAC Recommendation: OPPOSE
Companion Bill(s): HB 204

Bill Status: This bill passed the House after an amendment to offer new employees an option to choose between the defined contribution and the defined benefit retirement programs failed on a 15-21 vote. The bill was returned to the Senate for concurrence and passed without opposition.

Bill Summary: This bill revises SB 141 to specify a funding source for teachers' disability and death benefits; add annual cost of living increases to catastrophic benefits in the new defined contribution retirement plan; limits survivor entitlements while receiving disability or death benefits; clarifies changes to maintain Internal Revenue Code requirements and adds the governor, lt. governor, legislators and elected municipal to the defined contribution retirement plan.

Legislation: SB 125 (State Bailout of PERS/TRS Unfunded Liability)
Status: Pending
Sponsor: Request of the Governor
ASEA Position: SUPPORT       
PAC Recommendation: SUPPORT
Companion Bill(s): HB 206

Bill Status: This bill has passed both chambers in different versions. An effort at concurrence in the Senate stalled on the final day of the 2007 session.

Bill Summary: SB 125 re-assigns responsibility for the PERS/TERS unfunded liability through a cost share program. Under the proposed legislation, employer contributions would be set at 22% (PERS) and 12.56% (TRS). The bill also includes a "hold harmless" provision for employers contributing less that 22% into PERS and substantial state appropriations to stabilize the unfunded liability.

Action Needed: Contact members of the Legislature to encourage concurrence in the changes of this important legislation to stabilize the PERS/TRS unfunded liability.

Legislation: SB 153 (Military Time toward 20-year Retirement)
Status: Pending
Sponsor: Sen. Hollis French (D)-Anchorage
ASEA Position: SUPPORT
PAC Recommendation: SUPPORT

Bill Status: SB 153 was sponsored by Sen. Hollis French in April 2007 and has been co-sponsored by Sen. Lesil McGuire. The bill waits for a hearing in the Senate Labor & Commerce Committee, then Senate State Affairs and Senate Finance.

Bill Summary: This bill would allow peace officers and firefighters to use up to five years of credited military time to qualify for retirement benefits.

Action Needed: Contact members of the Senate Labor & Commerce Committee to encourage support of this legislation.

Legislation: SB 183 (Repeal Defined Contribution Retirement Plan)
Status: Pending
Sponsor: Sen. Kim Elton (D)-Juneau
ASEA Position: SUPPORT       
PAC Recommendation: SUPPORT

Bill Status: Sen. Kim Elton introduced SB 183 on the last day of the first session. The bill enjoys co-sponsorship from Sen. Lesil McGuire, (R)-Anchorage. SB 183 has been referred to the Senate Labor and Commerce Committee.

Bill Summary: SB 183 repeals the defined contribution plan for new teachers and public employees created by SB 141 in 2005. The bill makes housekeeping changes for the repeal of the earlier legislation and allows for a one-time election of employees who entered service under the defined contribution plan to convert to the defined benefit system.

By repealing the defined contribution plan, SB 183 effectively reinstates the defined benefit system for new employees. A defined benefit retirement system avoids many of the deficiencies associated with defined contributions, including 1) the cost of managing thousands of individual accounts; 2) the cost of extra benefit products to supplement an inadequate retirement scheme; 3) the prospects of employees outliving their benefits; and 4) the recruitment/retention crisis exacerbated by uncompetitive benefits.

Action Needed: Contact members of the Senate Labor and Commerce Committee to encourage support of this legislation.

Federal Legislation: H.R. 800, S. 1041 (Employee Free Choice Act)
Status: Pending
Sponsor: Rep. George Miller (D-Calif.), 233 co-sponsors to date.
ASEA Position: SUPPORT
PAC Recommendation: SUPPORT

Bill Status: The Employee Free Choice Act was introduced in both the House and Senate during the 108th, 109th, and 110th Congress. It passed in the House in the form of H.R. 800 on March 1, 2007 for the first time. The bill is currently waiting for Senate committee referrals.

Bill Summary: This legislation would change federal law relating to the rights of workers to unionize. Specifically, it would allow employees to form unions by signing cards authorizing union representation, establish harsher penalties for employers who violate employee rights when workers seek to form a union, and institute new mediation and arbitration processes for first-contract disputes.

Action Needed: Contact Sen. Ted Stevens and Sen. Lisa Murkowski to encourage support of this legislation. Recommendation: Participate in the AFLCIO Employee Free Choice Act program via the Internet: http://www.aflcio.org/joinaunion/voiceatwork/efca/.

Federal Legislation: S. 1254 (Government Pension Offset (GPO) Reform Act)
Status: Pending
Sponsor: Sens. Barbara Mikulski (D-MD) and George Voinovich (R-OH)
ASEA Position: SUPPORT
PAC Recommendation: SUPPORT

Bill Status: The Government Pension Offset (GPO) Reform Act was introduced in the Senate during the 108th, 109th, and 110th Congress. It is currently in the Senate Finance Committee.

Bill Summary: This legislation that would amend the Social Security Act by reducing the cut in Social Security benefits that certain retired public workers experience. Currently, the GPO prevents local, state and federal government retirees from collecting both a government pension and a Social Security benefit that is based on their spouse's work, unlike workers in the private sector. The Social Security survivor benefit is reduced by an amount equal to two-thirds of the government pension payable. S. 1254 would lessen the Social Security reduction according to income and there would be no reduction for a retiree drawing less than $1,200 per month from their government pension and Social Security benefit combined.

Action Needed: Contact Sens. Ted Stevens and Lisa Murkowski to encourage support of this legislation. Recommendation: Visit the AFSCME website for more information about the GPO and the legislation to change it. Internet: http://www.afscme.org/legislation-politics/1483.cfm.