Appropriation:
“The bill contains a null and void clause requiring specific funding be provided in an omnibus appropriation act.”
The revenue forecast is set to be released on the afternoon of March 20th. Budget releases and hearings follow shortly after. Therein lies the importance of the null and void clause. As Casey Stengel might have said, “If it cost somethin’ and ain’t in the budget, it ain’t going to happen.”
Listed below are bills that appear still “alive”, remembering that negotiations are expected between both houses as they work out differences between the competing budgets. And as always, NTIB bills remain in the background and may come forward at any time.
Retirement Related Proposals
As a repeat of a repeat: Previous reports have covered the bills related to addressing the lack of a Cost-Of-Living increase (COLA) for members in TRS/PERS Plans 1 and requesting a COLA for members of those plans. They are: ESHB 1057, ESSB 5294, and HB 1201.
There are three basic bills currently moving that deal with pensions. These address the request for a one-time 3% COLA, employer rates, and how to deal with the $800 million the legislature set aside last session to lower the unfunded liability within TRS Plan 1.
ESSB 5294 was amended. Reduces the minimum contribution rates for the Plan 1 Unfunded Actuarial Accrued Liability (UAAL) in the Public Employees’ and Teachers’ Retirement System Plans 1 (PERS 1 and TRS 1) to 0.5 percent. • Sets UAAL rates for PERS 1 and TRS 1 for fiscal years 2024 through 2027. • Reduces the scheduled payment of $800 million into the TRS 1 fund to $250 million.
The Senate passed the bill 48/0. A public hearing was held on 3/9, and the bill awaits further action by the House Appropriations Committee.
HB 1201 Eliminates the minimum contribution rates for amortizing the unfunded liabilities in the Teachers’ Retirement System Plan 1 (TRS 1), beginning August 31, 2024, and for the Public Employees’ Retirement System Plan 1 (PERS 1), beginning June 30, 2025. • Fixes the employer contribution rate for the unfunded liabilities in PERS 1 and TRS 1 at zero until 2029, excluding amounts to amortize benefit improvements made after June 30, 2009. • Repeals the scheduled payment of $800 million into the TRS 1 fund scheduled for June 30, 2023.
The bill remains on the floor calendar and may well be NTIB since it deals with what to do with the previously dedicated millions.
Comment: A key difference between 5294 and 1201 deals with the $800 Million the legislature budgeted last session to pay down the unfunded liability in TRS Plan1. Do we (legislators/budget writers) take all $800 million for use elsewhere? (HB 1201) or, Do we legislators/budget writers take all but $250 million? (ESSB 5294). The soon-to-released budgets will tell the tale. The other key difference is the effect on rates both short and long-term. Each deals with these projected rates differently.
ESHB 1057: Would grant a one-time, capped 3% COLA for TRS1/PERS1 plan members. It also directs the SCPP to recommend a path to regain a permanent COLA for these retirees. Unlike its companion, an adopted amendment froze current rates until 2027.
The amended bill passed the House 96/0. The Senate Ways and Means Committee passed a striker that made it an identical companion to SB 5350 and struck out the rate freeze language.
SHB 1007: Concerning interruptive military service credit for members of the state retirement systems.
Comment: Retirement credit can be awarded, in any armed conflicts, if the participant was awarded the respective campaign or expeditionary badge or medal…. the ‘expeditionary badge qualifier was added.
This bill is on the Senate floor calendar awaiting further action.
HB 1008: Concerning participating in insurance plans and contracts by separated Plan 2 members of certain retirement systems.
Comment: This bill would simply make retiree insurance provisions uniform and equitable for Plan 2 and 3 members.
This bill is on the Senate floor calendar awaiting further action.
SHB 1056: Repealing some postretirement employment restrictions.
Comment: Changes the postretirement employment restrictions on benefits eligibility for Public Employees’ Retirement System, Teachers Retirement System, and School Employees Retirement System Plans 2 and 3 members that retired under the 2008 Early Retirement Factors (ERFs). • Permits 2008 ERF members to work in retirement system–covered employment for up to 867 hours per year without suspension of retirement benefits. • Adjusts benefits for individuals that chose the 3 percent per year early retirement reduction to the level of reduction in the 2008 ERFs for future benefit payments. Effective 1/1/2024.
This bill is scheduled for a public hearing on 3/16 before Senate Ways and Means.
SSB 5121: Extending the expiration date of the joint select committee on health care oversight.
Comment: Extends the expiration date of the Joint Select Committee on Health Care Oversight from December 31, 2022, until December 31, 2026, and renames it the Joint Select Committee on Health Care and Behavioral Health Oversight.
The bill is in House Rules, awaiting further action.
SSB 5490: Concerning health care coverage for retired or disabled employees denied coverage for failure to timely notify the authority of their intent to defer coverage.
Comment: Allows certain retired public employees who were denied retiree health care coverage by the Public Employees Benefits Board another limited opportunity to enroll. • Only retired or disabled employees who were denied coverage for failure to notify the Health Care Authority of their deferral of coverage, and appealed the denial before December 31, 2022, are provided the new opportunity to enroll.
This bill is in House Rules awaiting further action.
Other Areas of Potential Fiscal Impact (and often unfunded) to Districts
SHB 1068: Concerning injured workers’ rights during compelled medical examinations.
Comment: Allows an injured worker to make an audio and video recording of an independent medical examination and to have one person of the worker’s choosing present during the examination.
This bill is scheduled for Executive Session 3/21 before Senate Labor and Commerce.
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