MACo LEGISLATIVE UPDATE VOLUME 22, NO. 16 MARCH 28, 2013 PENSION BILL UPDATE By Sheryl Wood, Associate Director, Montana Association of Counties The Montana Association of It’s been a busy week regarding pension funding bills, with action being taken quickly to meet Counties (MACo) publishes this the March 29 transmittal deadline for appropriations bills. weekly bulletin containing summary descriptions of bills of HB 338, PROVIDE FUNDING FOR PENSION DEBTS, ALL NEW HIRES TO DC PLAN (REGIER) interest to local government nd officials. Each issue lists only the HB 338 passed 2 reading on the House floor on March 21, and was re-referred to bills that have been introduced Appropriations. It was heard in Appropriations on March 22 and tabled in Committee on during the week. Please save this March 23. On March 26, a motion was made to blast HB 338 off the table from the message or print it for future Appropriations Committee onto the floor for 2nd reading, but it failed on a vote of 45-54. reference. This bill has now missed the deadline for Appropriation Bill Transmittal and is “probably dead.” Previous issues of MACo’s (Reviving a bill that is “probably dead” requires a supermajority vote—usually a 2/3 vote—by Legislative Update can be found on the House or Senate.) our website’s legislative page. HB 454, PROVIDE FUNDING FOR PERS DEFINED BENEFIT PLAN, REVISE GABA Copies of bills are sent to County (MCCHESNEY) Clerks & Recorders and also can (Governor’s Proposal) HB 454 passed 2nd reading on the House floor on March 21 and was re- be found here. referred to Appropriations. It was heard in Appropriations on March 22, and Executive Action was taken the same day. During Executive Action – the bill was dramatically amended. (Please see the explanations and table below that outline the amendments related to funding and CONTACTING LEGISLATORS employer contributions.) Legislative Services Division Significant amendments were made regarding the Guaranteed Annual Benefit Adjustment Phone: (406) 444-3064 (GABA) for new hires, current employees, and retirees. Essentially the GABA will be Fax: (406) 444-3036 suspended, and/or paid on a percentage, based on the level of funding of the retirement Mail: PO Box 201706 system. Helena, MT 59620-1706 The bill was referred back to the House and passed second reading on March 27 with a 64-36 Senators vote, and it passed 3rd reading on March 28 with a vote of 64-35. The bill will now be referred Fax: (406) 444-4875 to a Senate Committee for hearing. Mail: P.O. Box 200500 Helena, MT 59620-0500 SB 333, ESTABLISH CASH BALANCE BENEFIT TIER IN TRS AND PERS FOR NEW HIRES (ARTHUN) Representatives Fax: (406) 444-4825 SB 333 was scheduled for hearing on March 20 but was cancelled and not rescheduled; Mail: P.O. Box 200400 therefore, the bill has now missed the deadline for Appropriation Bill Transmittal and is Helena, MT 59620-0400 “probably dead.” Many legislators have their own OTHER PENSION BILLS OF INTEREST THAT ARE STILL MOVING FORWARD contact information, which can be HB 95, REQUIRE CONTRIBUTIONS ON WORKING RETIREE COMPENSATION (WILMER) found here. HB 95 passed out of the State Administration Committee on March 27 with a vote of 7-0. It will probably be scheduled for 2nd reading in the Senate next week. CONTACTING MACO HB 97, CAP HIGHEST/FINAL AVERAGE COMPENSATION IN MPERA RETIREMENT SYSTEMS Phone: (406) 449-4360 (WILMER) Fax: (406) 442-5238 Known as the “anti-spiking” bill, HB 97 was heard in the Senate Finance & Claims Committee Email: [email protected] Mail: 2715 Skyway Drive on March 25. Executive Action is pending. Helena, MT 59602-1213 EWLY NTRODUCED ILL Web: http://www.mtcounties.org N I B SB 406, STATUTORY REFERENDUM ON PENSION REFORM, NEW HIRES TO DC PLAN, NOT TRS OR PERS (DEE BROWN) This bill is scheduled for hearing on Wednesday, April 3 at 8:00 a.m. in Senate Judiciary. rd 63 Legislative Session MACo Legislative Update Page 1 HB 454 AS AMENDED The amendments placed on HB 454 in the House Appropriations Committee were: 1) Eliminate the use of coal severance tax revenue; 2) Provide for a supplemental contribution totaling 4.50%, which will be shared by the employer and the general fund. The employer portion of the contribution will be a net increase of 1% for the next two fiscal years, while the general fund contribution will make up the rest. The employer’s share of the supplemental contributions will gradually increase by 1% over the next five (5) years (at .2% per year cumulative), while the general fund share will decrease; 3) Provides that the state and employer’s supplemental contributions may be decreased if the GABA has been fully reinstated. This will happen only if the system is 90% funded and the decrease will not cause the funded ratio to drop below 85%. HB 454 as Amended (FOR COUNTY CONTRIBUTIONS TO PERS SYSTEM): TOTAL SUPPLEMENTAL TOTAL EMPLOYER STATE CONTRIBUTION EMPLOYER EMPLOYER CONTRIBUTION CONTRIBUTION (EMPLOYER + CONTRIBUTION CONTRIBUTION STATE) FY 6.8% .27% 7.07% .1% 7.17 2013 FY 6.8% 1.27% 8.07% 3.6% 11.67 2014 FY 6.8% 1.27% 8.07% 3.6% 11.67 2015 FY 6.8% 1.47% 8.27% 3.4% 11.67 2016 FY 6.8% 1.67% 8.47% 3.2% 11.67 2017 FY 6.8% 1.87% 8.67% 3.0% 11.67 2018 FY 6.8% 2.07% 8.87% 2.8% 11.67 2019 FY 6.8% 2.27% 9.07% 2.6% 11.67 2020 When the system is 90% funded as of the latest actuarial valuation, and the Guaranteed Annual Benefit Adjustment (GABA) has been increased to the maximum allowed under 19-3-1605, the Board shall decrease the contribution percentages provided by a total percentage that will provide that the system is not less than 85% funded. Two-thirds (2/3) of the total percentage decrease must be applied to the general fund contribution and one-third (1/3) of the total percentage decrease must be applied to the employer contribution. If the general fund contribution is too low to be reduced by the two-thirds (2/3), the general fund contribution must be decreased to zero (0) and the remainder of the total reduction must be applied to the employer contribution. If the general fund contribution is zero (0), the total percentage reduction must be applied entirely to the employer contribution. The general fund supplemental contributions are statutorily appropriated on an annual basis from the general fund to the system’s pension trust fund. MACO & THE MONTANA LEGISLATURE The Montana Association of Counties’ website has a section HAPPENINGS FROM THE HILL dedicated to helping members keep track of the happenings UPDATED DAILY during the 63rd Montana Legislative Session: http://www.mtcounties.org/legislative/sessions/2013/2013- To better keep our members informed of what is occurring legislative-session. at the Montana Capitol, we have been updating our website daily with happenings from the 63rd Legislative Session. In this section you'll find MACo’s resolutions, links to pertinent bills, an archive of our weekly Legislative Updates, hearing Check it out today, tomorrow, the next day, and so forth . calendars, committee listings, legislator contact information, and we’re on the hill and on top of the action! more. CLICK HERE TO CHECK OUT OUR UPDATES SO FAR . rd 63 Legislative Session MACo Legislative Update Page 2 2013 SESSION CALENDAR As Revised by Legislative Leadership and Adoption of Joint Rules — January 18, 2013 Please note: Legislative leadership holds the authority to further revise the schedule, including the days the Legislature meets and the proposed breaks. In accordance with 5-2-103, MCA, each regular session of the Legislature convenes on the first Monday in January of each odd-numbered year or, if January 1 is a Monday, on the first Wednesday. Introduction deadlines: Generally, bills and resolutions must be introduced within 2 legislative days after delivery. JR 40-50, H40-10. “General bills” is used to denote all bills, except appropriation or revenue bills, and all joint resolutions. Notes: Deadline dates are determined according to legislative days. Certain bills and resolutions relating to administrative rules may be transmitted at any time during the session. JR 40-200(3). March 28: Transmittal of Appropriation Bills; Last day to request Committee Bills to implement HB 2 April 5: Transmittal of Revenue Bills and Bills Proposing Referendums April 8: Transmittal of amendments to General Bills April 16: Transmittal of amendments to Appropriation Bills April 18: Transmittal of amendments to Revenue Bills, Revenue-Estimating Joint Resolutions, and Bills Proposing Referendums April 22: Transmittal of Interim Study Resolutions April 27: 90th Legislative Day – Sine Die SCHEDULED HEARINGS: MARCH 29-APRIL 5, 2013 The Senate Local Government Committee meets Mondays, Wednesdays, and Fridays at 3 p.m. in Room 405. The House Local Government Committee meets Tuesdays and Thursdays at 3 p.m. in Room 172. MACo bills are highlighted green, priority bills are highlighted blue, and watch bills are highlighted yellow. FRIDAY, MARCH 29 Time Committee Room Bill No. Short Title Sponsor Break - No hearings scheduled. MONDAY, APRIL 1 Time Committee Room Bill No. Short Title Sponsor Break - No hearings scheduled. TUESDAY, APRIL 2 Time Committee Room Bill No. Short Title Sponsor 3:00 PM (H) Appropriations 102 HB 14 Bonding program Galen Hollenbaugh 3:00 PM (H) Appropriations 102 HB 636 Implement tribal water compact Daniel R Salomon Deposit lottery revenue to Teachers' Retirement 3:00 PM (H) Appropriations 102 HB 637 Nicholas Schwaderer System (H) Fish, Wildlife and Revise restriction on # of nonresident large 3:00 PM 152 SB 260 Fred Thomas Parks predator hunting licenses issued WEDNESDAY, APRIL 3 Time Committee Room Bill No.