Legislature(2017 - 2018)HOUSE FINANCE 519

04/13/2017 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
-- Delayed to 2:00 PM --
Moved CSHB 127(FIN) Out of Committee
Moved HB 47 Out of Committee
<Bill Hearing Canceled>
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 13, 2017                                                                                            
                         2:09 p.m.                                                                                              
2:09:43 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 2:09 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Representative   Scott   Kawasaki,  Sponsor;   Sarah   Race,                                                                    
Director,  Permanent Fund  Dividend Division,  Department of                                                                    
Revenue;   Kaci  Schroeder,   Assistant  Attorney   General,                                                                    
Criminal Division,  Department of Law; Nancy  Meade, General                                                                    
Counsel,   Alaska  Court   System;   Paul  Labolle,   Staff,                                                                    
Representative   Neal    Foster;   Representative   Jennifer                                                                    
Johnston;  Kevin Worley,  Chief Financial  Officer, Division                                                                    
of  Retirement and  Benefits, Department  of Administration;                                                                    
Kathy Lea,  Division of Retirement and  Benefits, Department                                                                    
of  Administration;  Christy  Lawton,  Director,  Office  of                                                                    
Children's  Services,   Department  of  Health   and  Social                                                                    
Services; Representative Jennifer Johnston                                                                                      
PRESENT VIA TELECONFERENCE                                                                                                    
HB 47     MUNICIPAL PERS CONTRIBUTIONS/INTEREST                                                                                 
          HB 47  was REPORTED  out of  committee with  a "do                                                                    
          pass"  recommendation  and  with  one  new  fiscal                                                                    
          impact note from  the Department of Administration                                                                    
          and  one   zero  note   from  the   Department  of                                                                    
HB 127    CRIM. CONV. OVERTURNED: RECEIVE PAST PFD                                                                              
          CSHB 127 (FIN) was  REPORTED out of committee with                                                                    
          a   "do   pass"   recommendation  and   with   one                                                                    
          previously published zero fiscal note: FN1 (REV).                                                                     
HB 151    DHSS;CINA; FOSTER CARE; CHILD PROTECTION                                                                              
          HB  151  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
Co-Chair Foster reviewed the meeting agenda.                                                                                    
HOUSE BILL NO. 127                                                                                                            
     "An Act  relating to a  permanent fund dividend  for an                                                                    
     individual   whose   conviction   has   been   vacated,                                                                    
     reversed,   or   dismissed;   and   relating   to   the                                                                    
     calculation  of   the  value  of  the   permanent  fund                                                                    
     dividend by  including payment to  individuals eligible                                                                    
     for a  permanent fund dividend because  of a conviction                                                                    
     that has been vacated, reversed, or dismissed."                                                                            
2:10:55 PM                                                                                                                    
REPRESENTATIVE SCOTT KAWASAKI, SPONSOR, did not have                                                                            
additional information to add related to the bill.                                                                              
2:11:43 PM                                                                                                                    
Representative Wilson MOVED to ADOPT Amendment 1, 30-                                                                           
LS0480\A.4 (Martin, 4/7/17) (copy on file):                                                                                     
     Page 2, line 1:                                                                                                            
     Delete "120 days"                                                                                                          
     Insert "one year"                                                                                                          
     Page 3, line 3:                                                                                                            
     Delete "120 days"                                                                                                          
     Insert "one year"                                                                                                          
Representative Pruitt OBJECTED for discussion.                                                                                  
Representative  Wilson explained  the  amendment that  would                                                                    
delete "120 days" and replace it with one year.                                                                                 
Representative Kawasaki  appreciated the bipartisan  work on                                                                    
the amendment.                                                                                                                  
Representative Grenn  asked to  sign on  as a  co-sponsor to                                                                    
the amendment.                                                                                                                  
Representative  Pruitt WITHDREW  his OBJECTION.  There being                                                                    
NO OBJECTION, it was so ordered.                                                                                                
2:13:48 PM                                                                                                                    
Representative  Pruitt  MOVED  to  ADOPT  Amendment  2,  30-                                                                    
LS0480\A.5 (Martin,  4/12/17) (copy  on file) [Note:  due to                                                                    
length of  amendment it  is not included  here. See  copy on                                                                    
Representative Kawasaki OBJECTED.                                                                                               
Representative Pruitt explained  the amendment. He explained                                                                    
the amendment had been brought forward by a victim.                                                                             
Representative  Ortiz  asked  for  clarification  about  the                                                                    
intent of  the amendment. He  wondered if it would  offer an                                                                    
option for repayment during the timeframe.                                                                                      
Representative Pruitt  stated it was an  option available to                                                                    
the  courts. He  explained  the person  in  the scenario  he                                                                    
outlined had been living freely.                                                                                                
Representative Grenn  asked where the repayment  funds would                                                                    
Representative  Pruitt  replied  that  he  had  contemplated                                                                    
putting  the money  in the  victim's funds.  He was  open to                                                                    
putting  the  money  wherever. The  goal  was  to  recognize                                                                    
victims.  He was  amenable to  having  the money  go to  the                                                                    
victim fund.                                                                                                                    
Representative   Guttenberg  was   in   support  of   making                                                                    
restitution  for someone  convicted of  a felony.  He stated                                                                    
that a conviction  did not make a person  ineligible for the                                                                    
dividend. He  believed there were many  questions pertaining                                                                    
to the  issue. He did not  know what the legal  aspect would                                                                    
be. He did not support the amendment.                                                                                           
2:20:27 PM                                                                                                                    
Representative   Pruitt   answered    there   were   certain                                                                    
situations where  a person was  made eligible.  He explained                                                                    
the only reason a person  was not ineligible was most likely                                                                    
because they had not been caught.                                                                                               
Co-Chair Foster  noted there were individuals  available for                                                                    
Representative   Kawasaki  had   some  concerns   about  the                                                                    
amendment. He  stated the amendment could  probably be added                                                                    
to a separate bill. He did not support it at present.                                                                           
2:25:01 PM                                                                                                                    
SARAH  RACE,  DIRECTOR,  PERMANENT FUND  DIVIDEND  DIVISION,                                                                    
DEPARTMENT OF  REVENUE, provided  detail on  current statute                                                                    
related  to eligibility  for individuals.  Prior to  payment                                                                    
the  Department  of Corrections  (DOC)  provided  a list  of                                                                    
individuals who  should be ineligible for  the dividend. She                                                                    
spoke to  how to  move forward with  the collections  of the                                                                    
Co-Chair Foster recognized  Representative Jennifer Johnston                                                                    
in the audience.                                                                                                                
Co-Chair  Seaton  saw  the amendment  as  unrelated  to  the                                                                    
current bill. He wondered if  the maker of the amendment had                                                                    
received  a Legislative  Legal Services  memo regarding  the                                                                    
Representative Pruitt replied in the negative.                                                                                  
Co-Chair Seaton wondered about a  fiscal note related to the                                                                    
amendment. He provided a scenario  that could cost money. He                                                                    
wondered what would be the  effect if the individual did not                                                                    
have any money. He wondered about past circumstances.                                                                           
Representative Pruitt  stated the  question was good  and he                                                                    
could not fully answer it.                                                                                                      
2:29:45 PM                                                                                                                    
Representative  Wilson stated  the  amendment  would not  go                                                                    
backwards. She reasoned  the court would not  have imposed a                                                                    
conviction. She offered a conceptual  Amendment 1 related to                                                                    
victims compensation fund.                                                                                                      
Vice-Chair Gara OBJECTED.                                                                                                       
Representative  Wilson  stated that  the  goal  was to  help                                                                    
Vice-Chair Gara understood the intent,  but he did not think                                                                    
there was  an easy way  to do it.  If it  were up to  him he                                                                    
would  send the  money directly  to the  victim. Instead  he                                                                    
thought they  were building a  bureaucracy around  the issue                                                                    
that would require multiple steps.  He observed they did not                                                                    
know the  cost or  if the compensation  fund would  give the                                                                    
money to the victim                                                                                                             
2:33:13 PM                                                                                                                    
Representative  Guttenberg   asked  queried  the   order  of                                                                    
victim's compensation versus repaying the defendant.                                                                            
KACI   SCHROEDER,  ASSISTANT   ATTORNEY  GENERAL,   CRIMINAL                                                                    
DIVISION, DEPARTMENT OF LAW, deferred the question to DOR.                                                                      
Ms. Race asked for clarification on the question.                                                                               
Representative  Guttenberg  asked  who would  be  paid  back                                                                    
first - the victim or the fund.                                                                                                 
Ms. Race answered it would  go back into funds available for                                                                    
carrying forward the next year's dividend calculation.                                                                          
Representative Guttenberg  surmised that the money  would go                                                                    
to the  victim's compensation  fund. He  asked who  would be                                                                    
paid back first.                                                                                                                
Ms.  Race replied  that typically  when the  division did  a                                                                    
collection of funds that had been  paid out. There was not a                                                                    
priority  order established.  She thought  another structure                                                                    
may need to be put into place.                                                                                                  
Ms. Schroeder stated her understanding  of the question. She                                                                    
stated that  unfortunately the  answer was  not known  . She                                                                    
explained that restitution was what  the defendant owed - it                                                                    
would have  to be  sorted out. The  court system  was taking                                                                    
over collections of restitution.                                                                                                
Representative Pruitt  returned to a  previous conversation.                                                                    
He underscored  that the amendment  included "may"  and left                                                                    
the  concept  in  the  court's hands.  He  agreed  with  the                                                                    
amendment to the amendment.                                                                                                     
2:39:11 PM                                                                                                                    
Representative  Wilson provided  wrap up  on the  conceptual                                                                    
Vice-Chair  Gara  WITHDREW  his OBJECTION.  There  being  NO                                                                    
OBJECTION,  Conceptual  Amendment  1   to  Amendment  2  was                                                                    
Representative  Ortiz  wondered  whether  the  argument  was                                                                    
based on similar crimes that may not have been tried.                                                                           
Representative Pruitt  explained the  intent was  related to                                                                    
individuals who had eluded the state for several years.                                                                         
2:43:11 PM                                                                                                                    
Vice-Chair Gara  understood the intent of  the amendment. He                                                                    
stated a court  would not do that - the  standards had to be                                                                    
in  the  provision. The  court  would  have no  standard  to                                                                    
follow. It  was not possible  to assume the court  would act                                                                    
like  the  finance  committee. He  thought  in  concept  the                                                                    
amendment made  sense, but that  it should be written  in an                                                                    
enforceable way.                                                                                                                
Representative  Guttenberg agreed.  He  thought the  concept                                                                    
was  interesting,  but  he   believed  there  were  numerous                                                                    
questions  that  needed  to   be  answered.  He  provided  a                                                                    
scenario and asked how far back they could go.                                                                                  
Ms. Schroeder answered  that it was for  crimes committed on                                                                    
or after the effective date.                                                                                                    
2:46:14 PM                                                                                                                    
Representative Guttenberg  pointed to  page 3, Section  4 of                                                                    
the amendment that  would add a new section  to the dividend                                                                    
application.   He  asked   about  the   complexity  of   the                                                                    
Ms.  Race   believed  it  would   be  merely   a  disclaimer                                                                    
statement.  There were  several  different  bullets where  a                                                                    
person  had to  certify everything  they wrote  was accurate                                                                    
and true.                                                                                                                       
NANCY   MEADE,  GENERAL   COUNSEL,   ALASKA  COURT   SYSTEM,                                                                    
introduced herself.                                                                                                             
Vice-Chair  Gara  would  prefer  to  see  the  money  go  to                                                                    
restitution.  He  asked if  the  money  were  to go  to  the                                                                    
Victims  Compensation  Fund  would   it  reduce  the  amount                                                                    
available  for restitution.  Second, the  amendment language                                                                    
stated "the  court may  order" but  did not  specify whether                                                                    
the individual had money.                                                                                                       
Ms.  Meade  answered  the  money   would  be  due  from  the                                                                    
Vice-Chair  Gara clarified  there had  been an  amendment to                                                                    
put the money into the Victims Compensation Fund.                                                                               
Ms. Meade replied that there  the fund would be appropriated                                                                    
from that  fund. She  stated that  the money  collected from                                                                    
the defended, and there would be more money available.                                                                          
2:51:32 PM                                                                                                                    
Vice-Chair Gara  wondered whether the amendment  would limit                                                                    
restitution to the victim.                                                                                                      
Ms. Meade replied  that the money in  the Permanent Dividend                                                                    
Fund was  not being used  for restitution. The  court's role                                                                    
would  be to  act as  a funnel  between the  debtor and  the                                                                    
creditor in the scenario. By  adding money into the dividend                                                                    
fund there would be more money available.                                                                                       
Vice-Chair Gara  asked wondered  whether the  court received                                                                    
the money.                                                                                                                      
Ms. Meade did  not believe the court would  be collecting or                                                                    
receiving  any  of  the  money.  Currently  fines  were  not                                                                    
collected by the court.                                                                                                         
2:53:42 PM                                                                                                                    
Vice-Chair Gara did not understand  the answer. He explained                                                                    
the standard was  not included. He asked if  the court would                                                                    
only go after people with money.                                                                                                
Ms. Meade clarified that the  court did not go after anyone;                                                                    
it imposed fines. The court  could impose a maximum fine set                                                                    
out in  statute. The  court did not  ensure the  person paid                                                                    
the  fine. If  the court  were to  order a  person to  repay                                                                    
their PFD it would not go  after the person for payment. The                                                                    
PFD Division would have to pursue the issue.                                                                                    
Co-Chair Seaton pointed  to page 1, line 9  of the amendment                                                                    
related to a  defendant convicted of an  offence. However on                                                                    
page 2,  a person  had been convicted  of a  misdemeanor. He                                                                    
asked if the amendment could be  imposed on a person who had                                                                    
been convicted for a misdemeanor.                                                                                               
Ms. Meade believed Co-Chair Seaton was correct.                                                                                 
2:57:29 PM                                                                                                                    
Co-Chair Seaton  was trying  to figure out  how it  could be                                                                    
distinguished  from  a  person  working for  the  state  who                                                                    
received wages.                                                                                                                 
Ms. Meade replied  that she believed if  someone committed a                                                                    
crime in  2012, must pay  back to  the PFD office  the total                                                                    
amount of the  2014 through 2015 dividend. She  did not know                                                                    
if the court would have  enough information about a person's                                                                    
2:59:25 PM                                                                                                                    
Representative  Grenn   asked  about  the   PFD  eligibility                                                                    
process.  He thought  the bill  would only  deal with  a few                                                                    
people per year.  He thought the amendment  could pertain to                                                                    
numerous  people. He  asked what  number of  individuals who                                                                    
applied for a PFD were deemed ineligible.                                                                                       
Ms. Race  answered it  was roughly  between 1,000  and 2,000                                                                    
Representative  Grenn asked  for verification  of the  1,500                                                                    
Ms. Race explained the current process.                                                                                         
3:01:45 PM                                                                                                                    
Representative Grenn  asked for  verification it  dealt with                                                                    
the current year.                                                                                                               
Ms. Race answered in the affirmative.                                                                                           
Representative Grenn queried the communication efforts.                                                                         
Ms. Race  responded that  the division would  have to  be in                                                                    
direct communication  with the  courts. She  highlighted the                                                                    
several  different  aspects  a  person would  need  to  meet                                                                    
including paying back a given number of dividends.                                                                              
Representative Grenn asked about the administrative load.                                                                       
Ms.  Race answered  it depended  on  the communication.  She                                                                    
stressed without the information they  would not know how to                                                                    
proceed with the collections in general.                                                                                        
Representative  Wilson  remarked  that  it  was  simply  the                                                                    
courts  would make  the determination  and would  pass along                                                                    
the information  to the PFD Division.  She characterized the                                                                    
items as  tools in  the toolbox  for the  court to  use. She                                                                    
thought the amendment  worked well with the  bill before the                                                                    
committee. She  remarked that  sometimes court  cases lasted                                                                    
several  years. She  believed the  amendment  sent a  strong                                                                    
message  that people  would not  be able  to gain  from what                                                                    
they did.  She would have  been opposed to the  amendment if                                                                    
it included  "shall" she thought  it sent a  strong message.                                                                    
She wanted to get as much back to victims as possible.                                                                          
3:06:39 PM                                                                                                                    
Ms. Meade responded further to  an earlier question by Vice-                                                                    
Chair Gara.  She thought  the concern  he may  be expressing                                                                    
was that defendants  had limited means and if  the money was                                                                    
owed  there was  that much  less money  available for  other                                                                    
things.  It  would  be an  additional  monetary  obligation,                                                                    
which may be less money available for restitution.                                                                              
Representative   Guttenberg   thought    the   concept   was                                                                    
interesting.  He did  not think  people  committing a  crime                                                                    
thought   about  the   issue  -   they  were   not  thinking                                                                    
rationally. He spoke to the  misdemeanor component and asked                                                                    
about  a low  level crime  a  person could  be convicted  of                                                                    
where they would have to give the money back.                                                                                   
3:09:12 PM                                                                                                                    
Ms.  Meade answered  in  the affirmative  -  a person  would                                                                    
become ineligible  for a  third misdemeanor  including three                                                                    
instances of shoplifting.                                                                                                       
Representative   Kawasaki   MAINTAINED  his   OBJECTION   to                                                                    
Amendment 2 as amended.                                                                                                         
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Pruitt, Thompson, Tilton, Wilson                                                                                      
OPPOSED: Guttenberg,  Kawasaki, Ortiz, Gara,  Grenn, Foster,                                                                    
The MOTION to adopt Amendment 2 as amended FAILED (4/7).                                                                        
3:10:35 PM                                                                                                                    
Representative  Thompson  provided a  hypothetical  scenario                                                                    
related to Permanent Fund checks.                                                                                               
Ms. Race did not believe she could answer the question.                                                                         
Representative   Thompson  spoke   to   his  concern   about                                                                    
Ms.  Race  responded replied  that  it  did not  necessarily                                                                    
carry the same garnishment from year-to-year.                                                                                   
Representative  Thompson  asked if  a  person  were to  have                                                                    
their  conviction  reversed  whether   they  would  have  to                                                                    
collect their money.                                                                                                            
3:15:36 PM                                                                                                                    
Ms. Race  answered that it was  a question, but was  not the                                                                    
current process.                                                                                                                
Representative Thompson  asked if  the person would  have to                                                                    
reapply to be eligible.                                                                                                         
Ms.  Race answered  there  would  have to  be  some sort  of                                                                    
process like the one he mentioned.                                                                                              
Vice-Chair  Gara   explained  the   fiscal  note   from  the                                                                    
Department  of Revenue.  The  funds would  come  out of  the                                                                    
Dividend fund and.                                                                                                              
Co-Chair  Seaton  MOVED  to  REPORT  CSHB  127(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
CSHB  127 (FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass" recommendation and with  one previously published zero                                                                    
fiscal note: FN1 (REV).                                                                                                         
3:17:50 PM                                                                                                                    
AT EASE                                                                                                                         
3:22:58 PM                                                                                                                    
HOUSE BILL NO. 47                                                                                                             
     "An  Act   requiring  certain  municipalities   with  a                                                                    
     population  that  decreased  by more  than  25  percent                                                                    
     between 2000  and 2010 that participate  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;                                                                    
     authorizing  the administrator  of the  defined benefit                                                                    
     retirement  plan of  the  Public Employees'  Retirement                                                                    
     System  of  Alaska  to  reduce  the  rate  of  interest                                                                    
     payable by  certain municipalities that  are delinquent                                                                    
     in transmitting employee  and employer contributions to                                                                    
     the  retirement plan;  and providing  for an  effective                                                                    
3:23:24 PM                                                                                                                    
PAUL LABOLLE, STAFF, REPRESENTATIVE NEAL FOSTER, discussed                                                                      
the bill:                                                                                                                       
     SB 125 changed the PERS system from a multiple employe                                                                     
     r plan to a cost share plan. It transferred the indivi                                                                     
     dual liability of the 160 PERS employers and consolida                                                                     
     ted it so that all the employers share in that liabili                                                                     
     SB 125 also created what is commonly referred to as th                                                                     
     e 2008 salary floor.          This requires employer's                                                                     
     contribute 22%  of   annual  salaries or 22%   of  FY08                                                                    
     salaries,                  whichever                 is                                                                    
     greater. The floor was instituted                                                                                          
     to ensure that the system could not be "gamed" by disc                                                                     
     ouraging employers from replacing PERS                                                                                     
     employees with contract hires to reduce their base con                                                                     
     tribution to the system.                                                                                                   
     Some municipalities have found themselves under the 20                                                                     
     08 floor through no fault of their own. A large                                                                            
     change in population results in a reduced tax base, wh                                                                     
     ich affects the services a city can provide. As that                                                                       
     financial reality drives a city to downsize, current l                                                                     
     aw exacerbates this problem by keeping their PERS cont                                                                     
     ribution at the 2008 level. This bill targets the comm                                                                     
     unities whose population has dropped by more                                                                               
     than 25% since the previous census.                                                                                        
     HB 47 will address this issue in two ways:                                                                                 
     1.Establish a new floor of FY 2012 for communities who                                                                     
     se population decreased by more than 25%                                                                                   
     between 2000 and 2010.                                                                                                     
     2.Allows the PERS administrator to negotiate penalty i                                                                     
     nterest rates on delinquent payments.                                                                                      
     HB 47 does not intend to repeat the "2008 floor" debat                                                                     
     e but to correct one of the unintended                                                                                     
     consequences caused by the arbitrary line that debate                                                                      
3:25:51 PM                                                                                                                    
Representative Ortiz  understood the intent of  the bill. He                                                                    
wondered how  the department assessed things  at present. He                                                                    
wondered  if  there was  a  process  in place  to  determine                                                                    
whether municipalities  were doing  their part.  He followed                                                                    
up on his question.                                                                                                             
Mr.  LaBolle replied  that  the original  bill  a couple  of                                                                    
years ago -  the bill before the committee the  debt was not                                                                    
3:28:31 PM                                                                                                                    
AT EASE                                                                                                                         
3:28:36 PM                                                                                                                    
Representative  Pruitt  MOVED  to  ADOPT  Amendment  1,  30-                                                                    
LS028\A.1  (Wayne, 4/8/17)  (copy  on file).  [Note: due  to                                                                    
length of  amendment it  is not included  here. See  copy on                                                                    
Co-Chair Foster OBJECTED.                                                                                                       
Representative Pruitt explained the amendment.                                                                                  
3:32:04 PM                                                                                                                    
Co-Chair  Foster was  open  to  hearing from  Representative                                                                    
REPRESENTATIVE  JENNIFER JOHNSTON,  stated  the  bill was  a                                                                    
great example about how the state  may not be able to manage                                                                    
the unfunded  retirement liability. She stated  that she had                                                                    
previously  been  in the  Alaska  Municipal  League and  had                                                                    
considered  the   issue  of  the  unfunded   liability.  She                                                                    
believed  the   larger  entities  needed  to   manage  their                                                                    
employees -  not to  penalize individuals  for the  way they                                                                    
did business. She thought the  committee should reassess the                                                                    
fiscal note.                                                                                                                    
3:37:04 PM                                                                                                                    
Representative   Johnston  asked   if   the  committee   had                                                                    
addressed the 2008 floor. It  gave other abilities to manage                                                                    
the unfunded liability.  She thought it was  time to address                                                                    
the issue.  She was looking  to fiscally manage  an elephant                                                                    
in the room.                                                                                                                    
3:39:12 PM                                                                                                                    
Representative Pruitt  thought the  last component  was very                                                                    
important. He stressed  that if the state  was not enforcing                                                                    
the issue  it could come  up in  the future. He  believed it                                                                    
needed to be dealt with                                                                                                         
Co-Chair  Seaton  asked  the  Department  of  Administration                                                                    
(DOA) to address the committee.                                                                                                 
Representative Johnston  had been  hesitant to say  the last                                                                    
statement, because of possible liability issues.                                                                                
KEVIN   WORLEY,  CHIEF   FINANCIAL   OFFICER,  DIVISION   OF                                                                    
RETIREMENT  AND  BENEFITS,   DEPARTMENT  OF  ADMINISTRATION,                                                                    
stated that the division looked  at annual salaries, and had                                                                    
recently  completed the  FY 16  evaluation  in the  previous                                                                    
June. Those salaries were compared  to the floor of 2008. He                                                                    
stressed that  statutes stated that  there should be  a bill                                                                    
for the difference between the  actual paid salaries and the                                                                    
2008 floor.                                                                                                                     
3:42:34 PM                                                                                                                    
KATHY  LEA, CHIEF  PENSION OFFICER,  DIVISION OF  RETIREMENT                                                                    
AND BENEFITS, DEPARTMENT OF  ADMINISTRATION, shared that her                                                                    
division  continued to  enforce termination  and there  were                                                                    
three aspects to termination.                                                                                                   
3:47:35 PM                                                                                                                    
Representative  Thompson  wondered  whether the  cost  of  a                                                                    
termination study was approximately $15,000.                                                                                    
Ms.  Lea  replied   that  it  depended  on   the  number  of                                                                    
terminated employees.                                                                                                           
Representative Wilson  wondered whether a  termination study                                                                    
would be required after a division ceased to exist.                                                                             
Ms.  Lea  answered  in  the negative,  if  the  people  were                                                                    
assigned to another PERS position.                                                                                              
Representative Wilson  wondered whether a  termination study                                                                    
was required when 15 employees were lost.                                                                                       
Ms. Lea answered in the affirmative.                                                                                            
Representative Wilson queried the cost of the study.                                                                            
Ms. Lea answered  it was difficult to answer  because it was                                                                    
based on individual employees.                                                                                                  
Representative Wilson  stressed that the state  required the                                                                    
study, to  ensure that the  employer was paying  enough into                                                                    
the retirement.                                                                                                                 
Ms.  Lea stated  that  the  study was  done  to examine  the                                                                    
individual employees retirement.                                                                                                
3:51:24 PM                                                                                                                    
Representative  Wilson thought  it was  almost as  big of  a                                                                    
deal than the original bill  to the smaller communities. She                                                                    
spoke  to  individuals  being penalized  by  the  state  for                                                                    
something that was not their fault.                                                                                             
Ms. Lea did not characterize it as penalizing.                                                                                  
Representative  Wilson asked  if many  of the  employers had                                                                    
known they would be in the current position.                                                                                    
Ms.  Lea  answered  that  it had  happened  about  10  years                                                                    
earlier. The basic  consideration was how much  the GF could                                                                    
absorb.  The amount  needed to  pay  the unfunded  liability                                                                    
would not change, it was about who would pay.                                                                                   
Representative  Ortiz asked  if  the net  effect of  changes                                                                    
made  in   2008  that  it   was  much  harder   for  smaller                                                                    
communities to comply.                                                                                                          
Mr.  Worley   asked  Representative  Ortiz  to   repeat  the                                                                    
Representative Ortiz complied.                                                                                                  
3:54:50 PM                                                                                                                    
Mr. Worley asked for clarification.                                                                                             
Representative Ortiz reiterated his question.                                                                                   
Ms.  Lea answered  that the  number of  employees with  each                                                                    
employer  varied. There  could  be a  smaller employer  with                                                                    
only one or two employees  covered or a larger employer with                                                                    
hundreds of  employees covered. She  did not believe  it was                                                                    
possible  to   make  a   sweeping  statement   that  smaller                                                                    
employers were more impacted.                                                                                                   
Representative  Ortiz spoke  about  triggering  a study.  He                                                                    
surmised that if a person  was eliminated from a category it                                                                    
could trigger a study.                                                                                                          
Ms. Lea replied in the affirmative.                                                                                             
Representative  Ortiz stated  that moving  employees into  a                                                                    
different classification would not trigger a study.                                                                             
Ms. Lea agreed.                                                                                                                 
3:58:35 PM                                                                                                                    
Co-Chair  Foster   referred  to   Representative  Johnston's                                                                    
statement that the bill was  similar to a bill introduced in                                                                    
2014. He believed the fiscal  note had been indeterminate at                                                                    
the time.                                                                                                                       
Representative  Johnston spoke  to the  issue. She  stressed                                                                    
that  termination  studies were  part  of  the process.  She                                                                    
remarked that the  University of Alaska was  below the 2008,                                                                    
and they were paying for that cost.                                                                                             
4:03:10 PM                                                                                                                    
Co-Chair  Seaton  clarified   the  committee  was  currently                                                                    
addressing Amendment 1.                                                                                                         
Representative  Guttenberg noted  that  it  was possible  to                                                                    
determine liability focusing on  certain groups. He wondered                                                                    
how  much of  the amendment  would challenge  the negotiated                                                                    
agreement rate of 22 percent.                                                                                                   
Ms. Lea clarified her understanding of the question.                                                                            
Representative Guttenberg affirmed.                                                                                             
Representative Guttenberg  asked how  the balance  of burden                                                                    
between larger and smaller communities.                                                                                         
Ms. Lea  answered that it  was specific to the  employer. It                                                                    
was difficult  to make a  generalization. She  stressed that                                                                    
it was  very particular  to the makeup  of the  employer and                                                                    
how their covering.                                                                                                             
Co-Chair Seaton  asked for clarification.  He referred  to a                                                                    
prior fiscal note.                                                                                                              
Ms. Lea answered that the fiscal note was not current.                                                                          
Co-Chair Foster stated  that each time the bill  did not get                                                                    
passed it  meant fiscal liabilities  were adding up.  He did                                                                    
not support the amendment.                                                                                                      
4:08:47 PM                                                                                                                    
Representative Pruitt provided wrap  up on the amendment. He                                                                    
stated the underlying  bill may seem like a  small bill, but                                                                    
it  was a  big deal  for communities.  Likewise, so  was the                                                                    
amendment.  He  stated  the  issue  could  be  addressed  at                                                                    
present  or later  on. He  believed it  was worth  analyzing                                                                    
whether they should move forward on the issue.                                                                                  
Co-Chair Foster MAINTAINED his OBJECTION.                                                                                       
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Ortiz, Pruitt, Thompson, Tilton, Wilson                                                                               
OPPOSED: Kawasaki, Gara, Grenn, Guttenberg, Seaton, Foster                                                                      
The MOTION FAILED (5/6).                                                                                                        
4:12:07 PM                                                                                                                    
Representative Wilson  was sorry  the amendment  failed. She                                                                    
thought the bill picked winners and losers.                                                                                     
Co-Chair  Seaton felt  that increasing  the  budget was  not                                                                    
Representative Wilson interjected it was not $75 million.                                                                       
Co-Chair Seaton  noted the  previous fiscal  note on  a bill                                                                    
had been that amount.                                                                                                           
Representative Wilson stated much had changed.                                                                                  
Representative Pruitt  did support  moving the  bill forward                                                                    
He suspected  that some of  the communities would  be coming                                                                    
back with some of the challenges addressed in Amendment 1.                                                                      
4:15:26 PM                                                                                                                    
Vice-Chair Gara explained the two fiscal notes.                                                                                 
Representative  Wilson  stated  were  not  four  communities                                                                    
written  into the  bill. She  asked if  there was  a way  to                                                                    
cover other communities under the bill in the future.                                                                           
Mr. LaBolle asked for a repeat of the question.                                                                                 
Representative Wilson complied.                                                                                                 
Mr. LaBolle replied in the negative.                                                                                            
Vice-Chair Gara MOVED to REPORT  HB 47 out of committee with                                                                    
individual  recommendations  and   the  accompanying  fiscal                                                                    
Representative Wilson OBJECTED.                                                                                                 
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Thompson, Tilton, Gara,  Grenn, Guttenberg, Ortiz,                                                                    
Pruitt, Foster, Seaton                                                                                                          
OPPOSED: Wilson                                                                                                                 
The MOTION PASSED (10/1).                                                                                                       
There being NO further OBJECTION,  HB 47 was REPORTED out of                                                                    
committee with a  "do pass" recommendation and  with one new                                                                    
fiscal  impact note  from the  Department of  Administration                                                                    
and one zero note from the Department of Administration.                                                                        
HOUSE BILL NO. 151                                                                                                            
     "An Act  relating to  the duties  of the  Department of                                                                    
     Health and  Social Services;  relating to  training and                                                                    
     workload standards  for employees of the  Department of                                                                    
     Health  and Social  Services; relating  to foster  care                                                                    
     licensing; relating to placement of  a child in need of                                                                    
     aid;  relating to  the rights  and responsibilities  of                                                                    
     foster parents;  relating to subsidies for  adoption or                                                                    
     guardianship of a  child in need of  aid; requiring the                                                                    
     Department  of Health  and Social  Services to  provide                                                                    
     information  to a  child or  person  released from  the                                                                    
     department's custody; and providing for an effective                                                                       
4:19:38 PM                                                                                                                    
REPRESENTATIVE LES GARA, SPONSOR  explained detail about the                                                                    
need for  the bill. He stressed  it was not prudent  to have                                                                    
youth see a  different foster parent. The bill was  a fix to                                                                    
try to make  the system work. Without the  bill the negative                                                                    
consequences would continue to  occur. He stressed the state                                                                    
could  not keep  doing it.  He remarked  a caseworker  could                                                                    
handle about  12 to  15 cases  - they  could not  handle the                                                                    
number  of  cases they  currently  had.  The caseworkers  on                                                                    
average in the Wasilla office  handled 43 families; in other                                                                    
areas the caseload was double what it should be.                                                                                
4:28:17 PM                                                                                                                    
Vice-Chair  Gara  continued  to  address the  bill.  in  New                                                                    
Jersey, which  many people  saw as  the gold  standard, they                                                                    
gave 6  to 8  weeks of training  to caseworkers.  Alaska did                                                                    
about 2  to 3 weeks. The  bill specified Alaska should  do 6                                                                    
to 8  weeks. The caseloads  of new caseworkers  were limited                                                                    
to prevent  burnout. He  stated things went  on too  long at                                                                    
OCS  because it  was  an  agency in  crisis.  He provided  a                                                                    
scenario where foster parents had quit because of problems.                                                                     
4:35:21 PM                                                                                                                    
Vice-Chair Gara continued to address  the bill. He could not                                                                    
in good conscience recommend leaving  the system the same. A                                                                    
child  did  not deserve  to  be  bounced between  homes.  He                                                                    
thought the fiscal note would  be $12 million to $15 million                                                                    
and he had  been nervous. However, due to  federal funds and                                                                    
other, the  fiscal note would  be approximately  $5 million.                                                                    
Part of the bill had to  be dropped. He continued that there                                                                    
were youth  who were 18 to  20 who did not  have homes. Some                                                                    
of those kids would end up  in a permanent home, but at $7.8                                                                    
million it  was not  the best  use of  money, which  hurt to                                                                    
say. The fiscal note would disappear.                                                                                           
4:39:08 PM                                                                                                                    
Vice-Chair  Gara  addressed  the original  fiscal  note  for                                                                    
caseworkers to  meet the standard  - he had worked  with the                                                                    
department  that had  been trying  to determine  the federal                                                                    
matching  rate.  He  planned   to  introduce  to  raise  the                                                                    
caseload  standard  to 13  to  come  up with  an  affordable                                                                    
fiscal note. It  would still be far superior  to the current                                                                    
caseloads.  He  reiterated  the   changes  that  would  mean                                                                    
roughly  $4.2 million  for  caseworkers  and training.  Some                                                                    
office space and  equipment would come with that  as well. A                                                                    
caseworker  was supposed  to look  out  to see  if a  family                                                                    
member could  care for  the child;  often the  family member                                                                    
would become the  adoptive parent. The bill  would require a                                                                    
supervisor  to   double  check  if   a  family   member  was                                                                    
4:42:32 PM                                                                                                                    
Representative  Wilson  agreed  there  was  a  problem.  She                                                                    
pointed to  page 5, lines  16 to 20  of the bill.  She asked                                                                    
who determined appropriate placement.                                                                                           
Vice-Chair  Gara replied  that  the  placement standard  was                                                                    
about what was the best interest for the child.                                                                                 
Representative Wilson asked for  the statutory definition of                                                                    
"best interest for a child."                                                                                                    
Vice-Chair Gara  did not know  the statutory  definition. //                                                                    
He deferred to the department for detail.                                                                                       
CHRISTY  LAWTON, DIRECTOR,  OFFICE  OF CHILDREN'S  SERVICES,                                                                    
DEPARTMENT OF HEALTH  AND SOCIAL SERVICES, did  not have the                                                                    
definition on hand. She would follow up.                                                                                        
4:47:20 PM                                                                                                                    
Representative Wilson placed concerns  on the record related                                                                    
to the fiscal note. She wondered  why there was not a fiscal                                                                    
note from  the Public Defenders'  Agency and other.  She was                                                                    
also   concerned  about   qualifications  of   workers.  She                                                                    
wondered how the bill would impact supervised visits.                                                                           
4:50:27 PM                                                                                                                    
Vice-Chair  Gara spoke  to the  fiscal notes  for the  other                                                                    
departments -  there were a  shortage of guardians.  He knew                                                                    
of at least  one caseworker who had not known  looking for a                                                                    
family member was a part of their job.                                                                                          
Representative  Wilson was  not debating  that portion.  She                                                                    
did not  believe all of the  people who would be  hired. She                                                                    
addressed complaints  that came in. There  was a possibility                                                                    
more investigations were done. It  had happened in the past.                                                                    
She was not stating the issue was right or wrong.                                                                               
4:55:01 PM                                                                                                                    
Vice-Chair Gara  stated that the  first sixty days  that the                                                                    
child was in foster care  were assigned an assessment worker                                                                    
who was required  to develop a case plan.  That person often                                                                    
did not  have time to meet  with the parents. He  hoped that                                                                    
the caseload standard would be 13 cases.                                                                                        
Ms.  Lawton elaborated  stated that  the  reduction of  case                                                                    
loads  and  the  addition  of staff  would  allow  for  more                                                                    
visitation,  because those  workers  could potentially  have                                                                    
time to  supervise some of  those visits, with  the possible                                                                    
flexibility in the parent home.                                                                                                 
Representative  Wilson asked  how  many investigations  were                                                                    
currently investigated.                                                                                                         
Ms. Lawton asked for clarification.                                                                                             
Representative Wilson clarified her question.                                                                                   
Ms. Lawton answered the department screened roughly 10,000.                                                                     
5:00:06 PM                                                                                                                    
Representative Pruitt asked how  to deal with the additional                                                                    
burden of new requirements.                                                                                                     
Vice-Chair Gara replied that the  bill aimed to lessen bill.                                                                    
He had never spoken to his  first foster family and had been                                                                    
taught that  he was  not supposed  to maintain  contact with                                                                    
them. He regretted it.                                                                                                          
5:03:23 PM                                                                                                                    
Representative Pruitt looked at  Section 10, and queried the                                                                    
roll  of  psychological  parents   and  grandparents  as  it                                                                    
related to foster families.                                                                                                     
Vice-Chair Gara asked for further clarification.                                                                                
Representative Pruitt relayed  that there was a  case of the                                                                    
psychological grandparents rejecting children.                                                                                  
Co-Chair   Foster  handed   the   gavel  to   Representative                                                                    
Vice-Chair Gara that  the section tried to  limit the number                                                                    
of  children  removed  from  their  family.  He  provided  a                                                                    
scenario  where  a grandparent  lived  at  home. Section  10                                                                    
specified the child should be allowed to remain at home.                                                                        
5:07:25 PM                                                                                                                    
Representative  Pruitt  spoke  to trying  to  determine  the                                                                    
definition of family member.                                                                                                    
Vice-Chair Gara  answered there was  no attempt in  the bill                                                                    
to change the definition of family member.                                                                                      
HB  151  was  HEARD  and   HELD  in  committee  for  further                                                                    
Representative  Kawasaki  addressed  the  schedule  for  the                                                                    
following day.                                                                                                                  
Representative Wilson asked about the amendment due date.                                                                       
5:10:00 PM                                                                                                                    
AT EASE                                                                                                                         
5:12:36 PM                                                                                                                    
Vice-Chair Gara relayed  he would aim to  remove the portion                                                                    
related  to  adoption   subsidies  and  changing  caseworker                                                                    
standards to 13 instead of 12.                                                                                                  
Representative  Wilson wondered  whether the  statutes would                                                                    
be based on appropriation to meet that standard.                                                                                
Vice-Chair Gara  replied that the fiscal  note would reflect                                                                    
the actual cost for meeting the caseload.                                                                                       
Co-Chair  Foster communicated  amendments  would  be due  by                                                                    
noon  on  Saturday.  He  addressed   the  schedule  for  the                                                                    
following  day. He  recessed the  meeting to  a call  of the                                                                    
chair [note: the meeting never reconvened].                                                                                     
5:15:52 PM                                                                                                                    
The meeting was adjourned at 5:15 p.m.                                                                                          

Document Name Date/Time Subjects
HB155 Additional Document-AMHTFA Fact Sheet.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Additional Document-SEACC Comments on No Name Bay.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Invited Testimony-Wyn Menefee.pptx HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Letter of Comment-SEACC.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Additional Document-Maps as of 3.3.17.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Opposing Document-Doug Rhodes Letter.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Sectional Analysis 03.07.17.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Sponsor Statement 03.07.17.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Summary of Changes ver O to ver U.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Supporting Document-AFA Letter.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Supporting Document-AFA Response to SEACC.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Supporting Document-Bob Weinstein Letter.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Supporting Document-Federal Legislation.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB155 Supporting Document-Letters Compiled.pdf HFIN 4/13/2017 1:30:00 PM
HB 155
HB 127 Amendment #1.pdf HFIN 4/13/2017 1:30:00 PM
HB 127
HB 47 - Amendment #1.pdf HFIN 4/13/2017 1:30:00 PM
HB 47
HB 127 - Amendments.pdf HFIN 4/13/2017 1:30:00 PM
HB 127
HB47 Actuarial Letter 3.16.17.pdf HFIN 4/13/2017 1:30:00 PM
HB 47