Good afternoon. The time is now 132 and I'd like to call this meeting the Senate Labor and Commerce Committee to order
We are in Belts room 105 at the Thomas Stewart building in the nation's most beautiful
Rainy and snowy capital city of Juneau, Alaska. Today is Monday, January 26th,
2026 members present are Senator Merrick, Senator Dunbar,
Senator Yunt, and myself, senator Bjorkman. Senator Ray Jackson has an excused absence today.
Let the record reflect that we have a quorum to conduct a business. Welcome everyone to
we have House Bill 78 retirement systems and defined benefit option as well as Senate Bill 170
gaming electronic pull taps but first if you could please turn off our silencer cell phones
and join me in extending a warm Senate labor and commerce welcome to our recording secretary
Kerry Tupoe and our LAO moderator Susan Quigley and Kyla Tupou.
House Bill 78, retirement systems, defined benefit option.
This is our second hearing on the bill.
Today it is my intention to have a brief recap of the Bill.
Present to CS, to the committee for consideration.
Take invited testimony and set the bills aside for further consideration
with us for a Brief Recap we have the honorable Representative Chuck Kopp
and his staff, Julia O'Connor.
Thank you for joining us today at Senate Labor and Commerce.
Please place yourselves on the record and begin a brief recap of the bill
Thank you chair Borkman and
members of The Committee
My name is Chuck cop a house representative for district 10 and I am accompanied by my able team member
Julia O'Connor staff to representative cop
Thank You
Committee for bringing us back up, so a brief recap if the football games this
weekend cause memory loss is we are addressing three things in this bill.
One is the bleeding of talent in our state,
the personnel who lead in mentor and train.
We just heard from the Department of Law just 30 minutes ago that their biggest challenge is they're not able to maintain their mid-level and senior managers.
They have an employee turnover turn between one and three and four years and then they have very senior personnel.
So exactly what we're talking about is we have a hollowing out of our agencies.
How do we hold on to those people?
The second thing that we're bleeding is our money.
We saw on Friday that the cost of what we are doing now
is orders of magnitude higher than what this bill is proposing.
And finally, we aren't going back to an old legacy system.
But we provide a new modern retirement system that is affordable.
that is predictable, and what the actuaries say is responsible to address the recruitment
and retention challenges of our state.
It's not about expanding pensions, it's simply about finishing the job responsibly.
what we already owe by 2039 with our legacy systems and putting in place a new system
that is affordable, predictable, and it's capable of retaining the workforce that all
of our communities depend on.
So that's it in a very short recap, Mr. Chairman, you know, taking any committees, any questions?
Thank you very much, Rep. Cop.
Are there any question from committee members?
Hearing and seeing none members have a draft proposed CS in their packet. I have emotion, please
Yes, mr. Chairman, I move committee substitute for House bill 78 version 34 dash Lee, Miss Yara
0493 backslash golf as the working document
Object for purposes of discussion my staff the honorable Conrad Jackson
The committee's substitute
Thank you, Mr. Chairman for the record Conrad Jackson staff to Senator Bjorkman and the Senate Labor and Commerce Committee
The CS before the members version backslash G is in golf
only has a couple of changes the first being a title change which
adds a
An immediate effective date the second change
Happens in with section 38 on page 22 lines 3 through 9 and we're inserting a new section
The same or a very similar section is also inserted on page 51.
The first section deals with the teacher's retirement system.
The second deals
with public employees retirement
system and in both cases these changes will require
that new hires under this new retirement plan,
the new tier are required to enter into this tier,
not have the option of going back into a defined contribution plan because there
are two insertions of sections into the bill then the sections the following
sections were renumbered we also have two conforming changes in sections 101 I'm
sorry 100 and 101 and that's the extent of the changes Mr. Chairman.
Are there any questions for Mr. Jackson?
Seeing and hearing none, I'll remove my objection.
Is there a further objection?
Seeing, and Hearing none the committee substitute
is before members as a working document.
Representative Cobb has invited Mr Dan Dunan
to speak about this item to the Committee.
He is joining us via the team's web.
Mr. Dunan, can you hear us?
Yes.
Can you here me?
Most excellently.
Thank you.
And do we have...
There we go.
And are you sharing your screen for slides today,
or do have a separate slide show for you?
We have it.
Okay.
Is that working?
It appears to be so.
Wonderful.
Please be getting your leisure
Thank you. Thank You, Mr. Chairman Madam Vice Chair and members of the committee. I really appreciate the opportunity to join you today
I will be brief as I'm certain you have a lot of business to attend to
If I do go too fast or don't fully explain something I am happy to take questions and clarify
So with that, I'll jump right in
Gonna start with
Looking at the change in teacher turnover during the first five years after hire,
and this information comes from your system's actuary, their experience study,
and really wanted to go back and look how things have changed. So what you're
seeing here, that 2009, the dark blue bars, is the estimate of turnover, during
Right? And in 2009, they said, well, we think we'll lose 18 percent of first-year workers,
15 second year, and so on. Then in 2014, you come back,
you do another experience study,
and they found that more people were leaving than what they had anticipated.
If you jump forward to 2024, another two experience studies later, what you're finding is
25% than 19 in years two and three, and so on.
And you might be thinking, well,
were the actuaries wrong in 2014?
And the reality is, no, they look at a census.
They look everybody in the system,
how many people are quitting,
how much you're staying each year.
What really, I think, to take away from this
is that behavior itself has been changing.
I'm going to jump to looking at teacher turnover
for more experienced workers.
And once again, the dark blue bars
or the expectation when the DC plans were very young
and there wasn't a lot of track record.
And my understanding was they assumed
it would be about 10% higher turnover than the DV plan.
Again, in 2014 the actuaries came back
and said actually more people were leaving
than what we anticipated.
They pushed up those assumptions.
And again, by 2024, you're seeing 8%, 9%, 10% of experienced workers at age 30, 40, and 50.
That's the three sets of bars.
Again, the way to read this is that the experience itself has been changing.
Behavior doesn't change like a light switch when you change benefits and change plans.
It's sort of more of a walk over time, I think, awareness grows.
Now I will mention I focus on teachers here simply because of time limitations.
We have looked at the PERS plan, public safety, general employees, and these trends are universal
across the plans. One thing I would note on this chart, we also have the assumptions for the current
DV plan. Today about a quarter of your teachers are still in the legacy tier, so you're relying
And the turnover there is, you know, around three, four percent.
So you have much lower turnover amongst workers who are working side by side,
but in a different benefit plan.
One of my quick comments about how I see this and I think hopefully help you
thinking about turnover.
A higher percent of your workforce is going to be newer on the job.
And newer employees are always more likely to quit.
We saw that on their charts, you know, the first few years between 30 and 13 percent
of people were quitting in the 1st 5, and then it goes down to about 9 percent.
So when you have a lot of turnover, have more people in those early years who are more
and you have the higher rates themselves.
And I think the third factor to think about is,
managers can essentially be less selective
if they have no more spots to fill.
If you had a school and they get 40 applications
to be a teacher, if you need 10,
you're hiring your top quarter preference.
If need 30, you might be taken all viable candidates.
And, I believe that has an impact too,
because we know when someone's a good fit
they tend to stick and work out better.
The last slide before I open up questions,
losing experienced teachers is very unusual.
What I have here, the first two bars are males and females,
and this is essentially the 15th year of service.
And this based on your experience in the DC plan,
you're losing, again, about 9% when you combine males
and female's there.
The Alaska DB plan is the next two bars at 3.6 to 3,9.
So you're more experienced teachers, more likely to stay generally.
And just in contrast to other states, Oklahoma teachers 4.
6, Texas teachers 2.8.
And you can see most of these states have less than 5%
leaving the job each year, once they're into that job for 14 years.
Utah's 3 and 3.8 there.
So this is pretty universal when you look at
valuation reports that retirement systems create.
Early turnover tends to be a little high once people were in
the job and I think you're aware,
Alaska stands out and not offering a DV plan,
and these data come from those DV valuations.
So with that, I have to take questions or-
I'll let you to your other business. Thanks, Mr. Dunan. Thank you very much for your presentation today. Are there any questions from committee members?
Hearing and seeing none, thank you again for joining us.
Thank You
There any committee discussion on
House bill 78 before we set it aside
Hearing and seeing none, we'll set a House Bill 78 aside and we will take a brief at ease
while we set up for our next bill.
on the record now at 1.46 p.m. next up on our agenda today is Senate Bill 170170.
This is our first hearing on this bill this year. Today is my intention to hear recap of the bill
and present a committee substitute to members and then set the Bill aside for further consideration.
Once again Mr. Jackson will be joining us to provide a brief recap
Welcome back, Mr. Jackson.
Please put yourself on the record and begin your brief read.
Thank you again, Mister Chairman for the Record Conrad Jackson, staff to Senator
Bjorkman and the Senate Labor and Commerce Committee.
The bill before the members Senate Bill 170 proposes to legalize
electronic pull tabs in the state of Alaska.
It's really not much more complicated than that.
and minor changes, also taking place in the bill.
The purpose behind this is really dealing with
something that we're seeing around the nation, around
the world, inflation. The cost of a paper pull tab in years past
has been a microscopic portion of the overall sales.
That has changed. Prices have gone from a half a cent
up to the number. I believe I heard this morning was something like
So a pretty drastic increase.
All of this cuts into the profitability,
the margins for all of the stakeholders,
particularly the nonprofits.
The goal with Senate Bill 170 is to bring
the electronic pull tabs that are in play
in a number of other states into Alaska
in hopes of reducing those costs
that the non-profits
are saddled with with paper pull tabs. We're not intending or hoping that paper
pull tab go away. This would be a supplement to that. But because of the lower cost of
electronic pulltabs, we're hoping it that puts a little more money back into the pockets,
so to speak, the bank accounts of nonprofits in the state of Alaska.
And Mr. Chairman I think members we we heard this bill a number of times this last year
I I Think members are pretty familiar with the general topic beyond that so
Reckon so thank you very much for that brief recap are there any questions though for mr. Jackson on this topic
During and seeing none members have a draft proposed committee substitute in their packet may I have emotion, please?
Yes, mr. Chairman, I move committee substitute for Senate bill 170 version 34 dash Lima Sierra
0 2 1 3 backslash tango as the working document object for purposes of discussion
Mr. chairman, i'll just go through the summary of changes members have before them the first change begins on
page 2 section 4 is inserted a new section for
which adds a reporting requirement on the annual reports that are given to the department,
and that report will now require a recording of the source and the monetary value of any
marketing or promotional materials received from a distributor.
Then of course, following sections are renumbered.
And AS0515180E is amended to clarify that the top prize for a bingo session may not be
more than $10,000 and the Top Prize may be more
than 2,500 for bingo game.
There's also a change to the total value of all door prizes and that they may
There is a slight drafting change, a drafted convention change in paragraphs one, two, and three of section 20.
But that is just a drafting style, drafting convention, change.
The next change and the bill in the CS is made on page nine, section 25.
And subsection G is amended to prohibit a manufacturer from providing or receiving gifts of any value.
It also amends subsection J, I'm sorry,
I, poor eyesight, to prohibit a manufacturer
from distributing electronic pull tabs to a distributor
if an ownership interest is in that distributor is held
by the manufacturer.
Following change is on page 12, section 26.
And.
AS05-15-183A is further amended to prohibit the issuance
of an electronic pull tab endorsement to a distributor's license,
should an ownership interest be held by a manufacturer,
a parent or sister company, or subsidiary of a manufacture.
The next change you'll find on page 13, section 29,
we make a few changes there.
The term subsidiary is removed from subsection 8.
subsection 9 is amended and that restricts the distribution of electronic
pull tabs by a distributor from a manufacturer is referenced in AS05-15-181i.
We're also inserting a new paragraph, I'm sorry, subsection 10,
specifying a distributor may not distributor a pull tab game to a
permit or licensee that is owned or managed by a close relative of an owner or
employee of the distributor.
We're also amending J by adding a reporting requirement that all marketing or promotional materials
Provided under this subsection include the value and location where the items will be used or displayed
We'll so am ending subsection a m my apologies
specifying a contract may not include an incentive or bonus and there may
Not also there, may, not be a penalty based on the length of the contract
In Section 32, page 15, you'll find the next change to AS0515186E,
and that specifies that the ideal payout may not exceed 90%.
The next chain you will find on page 17, Section 37,
I'm sorry, O5, 15, 187, J to require that the designated person in charge must be on
site and provide direct oversight of the gaming systems.
We're further amending subsection K, changing the optional limits to tablets and play to
a mandatory limit.
And we're adding an alternative method of calculating the number of tablets that may
the strictly just based on occupancy, one for every six persons permitted in the facility,
to one person for ever six or ten tablets, whichever is greater.
The next section, former paragraph N, is deleted, and then, of course, we're re-lettering those.
Then we are then removing the $250 cap from the new paragraph
The next change is on page 18 section 41 and we're we are
We're amending
Three sections of AS 15
I'm sorry AS 0 5 15 1 88 first in L
We established that establishing a committee payout to a vendor
for electronic pull tabs may not be more than 25 percent.
In Q, we are amending to require monthly payments
by a vendor to a permitee be made not less than the 15th day
of the month for the previous month sales.
That section in the previously bill was a weekly true up.
This is a monthly to alleviate some of
the paperwork, some the burden on vendors.
there's further changes allowing a distributor to assist a vendor in the transfer of these payments
subject to a department approval. We're also granting the department authority to adopt
appropriate regulations. And then T is amended again to remove that $250 gift cap again meaning
Section 47 and 05, 15, 6, 9, 0, 40 is amended to expand the definition of a qualified organization.
And in that, we add that a school-based booster club, which has been in existence for less than three years,
if the club is supporting an activity which is been an existence, for at least three
years prior to the application.
That need to be an active club for three years before applying as long as they're supporting that or that
That activity the next change all the exchanges are found on the last page of the bill page 52
In section 51 there are conforming changes section 52 is a new transition section to permit adoption of regulations by the department
In Section 53 we add an immediate effective date
for section 52, and then 54 and 55 have conforming changes.
That is the extent of the changes
in the proposed CS, Mr. Chairman.
Thank you very much, Mister Jackson.
Are there questions from committee members?
Senator Dunbar.
Thank You, mr. Chair.
So first, I think a clarification for the public
on section 20, when they talk about
setting the limits to $40,480,000.
Some folks in the public might be asking, well, why do they send them at all?
But this is actually increasing the limit, doubling the
limits, I think, from $20,00 to 40,200 to 480, so, you know, and so far as we're taking
account of inflation, that's why those are in there, or that change is in
there.
amends required in the reports department include the source and monetary valuing of marketing or promotional material received from a distributor.
Can you explain what that is and why we're interested in knowing sort of the promotional
material receive from the distributor?
Thank you. Senator Dunbar through the chair, it ties back to the other sections you heard me speak of regarding the removal of
a $250 cap on gifts, but we are eliminating the gift option but marketing materials, promotional
materials are still allowed. However, this section would require reporting of those marketing
and promotional materials be included in the information provided to the department.
Who is receiving those materials so they're coming from a distributor to to a vendor permitting a licensee, okay, and
I guess why are we concerned about that? What is that matter?
for us, for the state.
What's sort of the public interest in that relationship?
Thank you, Senator Dunbar, through the chair.
It again goes back to the gifts.
We're trying to make sure that everything is,
I guess, similar to what we've done
with the alcohol statutes.
We were avoiding gifts, I hesitate
to use some rather crass words for what someone might think of
when they're giving gifts, but we want to make sure that any thing of monetary value that's
provided is tracked so that there's no less scrupulous activities going on.
Follow up, Mr. Chair?
Indeed.
So, those less groupless activities, would they result in sort of monopolistic behavior
I'm still sort of understanding what our concern is with, you know, I mean, it might not be a good business decision
If you've got distributor sort giving gifts to vendors
But is the worry that one distributor will sort be able to
Push other distributors out of the market by by convincing those vendors only to take their product. Is that the concern?
Through the chair senator Dunbar. I think that that's one way of looking at it that there is a
Buying away into a distributorship into Evender into A permit ease a place of business
Just to eliminate any
appearance of influence
In in getting a particular persons of particular companies pull tabs into that location
Promotional materials, marketing materials make sense.
That happens, it seems, in most every business you find,
including the alcohol industry.
So, there is some parallel here.
If I may as well to that end.
I think it's important to remember as we talk about limitations in this bill
on vertical integration, limitations on gifts and other things,
The reason why we want to have those limitations is so we can maximize
competition amongst manufacturers and distributors
so that we could also maximize profits for our charities and non-profits.
So if we were to
have a system that allowed significant gifts, inducements, exclusivity,
or other things that provided for market control for
one brand of supplier or one sector of suppliers that then could drive costs up
for those nonprofits and charities and then minimize their ability to raise
money. So by having system set in law that will maximize competition for
those people and not allow one company to offer excessive gifts or not
nonprofits, vendors, whomever engage in, only doing business with them, that means that
prices could go up and then profits for charities and nonprofits could down.
This whole sector of charitable gaming exists to allow nonprofits and charities to raise
money for things like kids' sports and veterans' organizations and all the things we like.
This market does not exist to allows private companies to make money.
That's not the goal.
the goal of our state of Alaska allowing charitable gaming is to raise money for charities.
And so I think it is called for that we have some pretty strict limits and guidelines
as far as how companies that do make money to support those opportunities can operate.
And that's really what I would say as the public interest on that.
Thank you.
Are there further questions for Mr. Jackson?
Okay, very well hearing and seeing
No other questions. I will remove my objection. Is there further objection?
Hearing and Seeing none the committee substitute has been adopted
At this time a little set Senate bill 170 aside for further consideration by committee members and stakeholders
The Senate Labor and Commerce Committee will meet again the day after tomorrow Wednesday,
when we will take up once again House Bill 78 retirement systems defined benefit option,
as well as Senate Bill 198, PERS, TERS retirement and medical eligibility.
As though there is no further business to come before the Senate
Labor & Commerce committee today, we are adjourned at 2.04 PM.